- A new Nielsen study revealed that approximately 50% of U.S. households are seeking out products made without artificial ingredients, according to Supermarket News. According to the firm's data, shoppers spent $18 billion on items that advertised a lack of artificial ingredients on their packaging.
However, just 7% of products made without artificial ingredients make this claim on their packaging, Nielsen estimates. If all eligible products did this, sales could shoot up to $240 billion.
- “What we’ve seen is that the absence of undesirable ingredients is more important than the inclusion of beneficial ones,” Andrew Mandzy, director of strategic insights of health and wellness at Nielsen, told SN.
Nielsen's findings should come as no surprise to manufacturers, particularly CPG companies that are trying to spur growth by phasing out artificial ingredients. General Mills has removed artificial flavors and colors from some of its cereals, while Kraft took them out of its popular Mac & Cheese products. Consumers have been clamoring for products with fewer chemicals and more natural ingredients since a seminal 2007 study that showed artificial food colors make children hyperactive.
What is surprising is that shoppers seem to prefer "made without" claims to functional claims. The past several years have seen manufacturers incorporate protein, probiotics, vitamins and other health-focused additions into their products. These items promise specific benefits that can serve as key differentiators in everything from beverages to cereal and snacks, and have grown into a more than $100 billion market.
Could this be a sign that enthusiasm for functional foods is cooling? Perhaps. Judging from Nielsen's findings, the bigger takeaway seems to be that manufacturers aren't capitalizing on the opportunity to market their products as free from artificial ingredients. The $240 billion potential sales figure cited by the research firm seems a bit high, since every eligible manufacturer making the claim would likely oversaturate the market. But it does indicate a clear opportunity.
There's the risk that manufacturers could overextend their health credentials by applying "free from" and "made without" claims to sugary and fattening products. Certainly, many consumers and advocacy groups like the Center for Science in the Public Interest frown upon such efforts. But from a sales perspective, this approach is paying off in categories like cereal and fresh bakery. Ultimately, it's up to manufacturers to determine which claims are right for their target consumers.