Clean and clear labeling concerns are well established in the food and beverage industry and have been featured through all Innova Market Insights’ “Top Ten Trends” forecasts in recent years. In fact, more than 10 years ago, “Go Natural” led the company’s annual trends listing. Since then, Innova Market Insights has highlighted clean label each year in different forms and it’s been so interwoven into the entire listing –that now it’s become a standard.
The term “clear labeling” (which Innova Market Insights coined for its 2015 Top Ten Trends listing) has now fully entered industry parlance. It’s used in several marketing campaigns and each day, manufacturers continuing voicing their commitment to clean label platforms.
Clean label’s increasing mainstream status is illustrated by the fact that nearly 28% of global food and beverage launches recorded by Innova Market Insights in 2018 used one or more clean label claims (natural, organic, no additives/preservatives and GMO-free). Looking just at the US, a larger 39% of new products used clean label claims in 2018.
There also has been greater interest in related clean label areas such as vegan-friendly, raw and Paleo diets. Likewise, there’s greater focus on minimal processing, including the use of techniques such as “cold-pressing” through high pressure processing. This all runs alongside increasingly wide ethical concerns such as fair trade and sustainability, packaging waste, the environment and
Of four key clean label positions, claims related to no additives or preservatives continue to feature most strongly and these appeared in just more than 15% of global food and beverage new product launches in 2018. This claim area was even more prevalent in the US last year where 20% of new products carried claims of no additives or preservatives.
The US saw higher levels of use of all clean label claims and also held relatively strong position of GMO-free labeling, which featured on 17.8% of launches, compared with under 6% globally in 2018. Overall, GMO-free was the number two clean label claim in the US and it came in well ahead of both organic (on just more than 13% of new products) and “natural” (found on just more than 8% of new items).
It is clear that the use of genetic modification has become a real issue in recent years in the US in particular, where there was traditionally relatively limited consumer resistance to GM foods. The move of non-GMO-certified foods into the mainstream in the US has largely taken place since 2013, following a number of developments from major players in the retail and foodservice sectors. The US penetration level of 17.8% has risen from less than 5% five years previously (2013) and now stands at more than three times the global figure.
Snacks, bakery and cereals lead in terms of GMO-free launches, reflecting the significance of GM ingredients in products using high levels of cereals. Although snacks had the highest number of GMO-free introductions overall in the US in 2018 (with more than 13% of the total), cereals led in terms of penetration. More than 44% of launches of breakfast cereals and cereal bars featured this type of claim, compared with 35% for snacks; and 21% for bakery.
Perhaps not surprisingly, the highest penetration GMO-free claims came in baby foods, where more than two-thirds of new products featured GMO-free claims. This reflects parents’ strong concerns over their children’s health. Last year, a high proportion (58%) of new baby food launches also claimed organic ingredients.
Although also trailing GMO-free in terms of NPD positionings in food and beverage overall, interest in organic food and beverage has continued to grow, reflected in the fact that the global organic foods market is now valued at around (US) $100 billion a year. Leading those sales is the US, where annual organic food and beverage sales at nearly (US) $50 billion. It’s important to note that estimates vary markedly according to source and definition, particularly as to whether natural foods also are included.
When you look at numbers new product launches by claim and category, the most significant categories for organic in the US are sauces and seasonings, soft drinks and bakery. However, when it comes to new products by category, the baby and toddler category is the clear market penetration leader with nearly 58% of all new products making organic claims in 2018.
In a look around the supermarket, Innova Market Insights found that 29% of all new hot drinks made organic claims, 27.5% of new sugar and sweeteners made these claims, just under 26% of new cereals made these claims and just under 23% of all new soft drinks carried organic claims.
Bringing Up Baby
As already mentioned, the strength of organic certification in the baby and toddler category is not surprising, given the desire of parents to provide the best for children. With naturalness, purity and quality always high on the agenda, the importance of organic formulations is clearly in evidence, along with interest in other health benefits including GMO-free ingredients.
Penetration is particularly high in the US, where the baby foods market is highly developed along with the processed food and beverage market overall. Organic claims are strongly concentrated in certain subcategories, however, particularly focusing on high added-value prepared products such as baby snacks, baby fruit products, desserts and yogurts and baby cereals and biscuits.
Screw top pouches of fruit, vegetables and yogurt are particularly evident and launches have increasingly tended to take organic certification and GMO-free status as standard. Looking for other points of difference, manufacturers have added even more functional benefits. Happy Family (part of Danone North America) offers Super Morning fruit and yogurt blends plus chia; a Super Smart fruit and vegetable blend with DHA and choline to support brain development; and a Super Foods line with bananas, peaches and mango plus chia.
Organic baby foods also are starting to feature more ingredients that are fashionable among adults. For example, Nestlé USA’s Gerber Organics’ line includes a Banana Mango Quinoa with Avocado & Vanilla; and an Apple, Mango, Raspberry Oatmeal with Avocado. Elsewhere, prunes also are popular, used in launches from Sprout Foods Inc. and Plum Organics (part of Campbell Soup Company).
Dairy Case Claims
Although penetration rates are lower, organic dairy products also now are regarded as more mainstream, with nearly 15% of US dairy launches recorded by Innova Market Insights in 2018 using an organic positioning. This figure rose to nearly 28% of all new unflavored milks in 2018.
Although the strong growth in sales has slowed in recent years, organic products still are outperforming the dairy category as a whole. Horizon Organic and Organic Valley, for example, remained in the top eight brands in both whole and reduced fat milks sold through US multiple retailers in 2018, with growth outperforming the milk market as a whole, and the whole milk category, in particular.
How are manufacturers distinguishing themselves? One way to add value has been to promote organic as well as noting the cows were “grass fed.” Industry estimates from leading supplier Maple Hill Creamery put annual sales of organic, grass-fed dairy products at about (US) $100 million, with more than 50% year-over-year growth.
Innova Market Insights found that one-fifth of organic milk launches in the US in 2018 also were marketed as grass-fed. Grass-fed products are perceived to give additional benefits in terms of animal welfare, and companies such as Organic Valley and Maple Hill Creamery have come together to create the third-party certified “Grass Fed Organic Livestock Program and Certification Mark.” Compared to USDA, this program claims to have stricter certification requirements about what constitutes “grass fed.”
Organic Valley, an independent cooperative of organic farmers, has had grass-fed milk in its range for some years, including whole and reduced fat options, in both standard and cream-on-top varieties. More recently, in 2017, it was joined by Danone North America’s Horizon Organic, one of the country’s leading milk brands, which launched Organic Grassfed whole and reduced fat milks in half gallon containers.
Maple Hill, meanwhile, has a range of 100% grass-fed organic dairy lines, including milk, kefir and yogurt. A chocolate milk joined the range in 2018 and the company noted that that product featured fair trade cocoa. To compete even more directly with broader beverage options, Maple Hill also introduced organic, grass fed shelf-stable, grab-and-go whole milk and chocolate milk in June 2019.
Although natural is the fourth leading claim used in new US foods and drinks, there is one area—involving sweeteners—where it does cast a particularly high profile.
Levels of interest have been particularly high in the US, where natural claims were used for nearly one-fifth of sugar and sweetener launches recorded by Innova Market Insights in 2018, ahead of the global figure of just over 14%.
Natural alternatives encompass a wide variety of ingredients, with traditional sweeteners such as maple syrup, honey, cane juice, molasses, agave and monk fruit more widely used. Joining the list more recently are products such as stevia and erythritol.
Stevia has had a relatively high profile, although launches containing it still accounted for only 1.3% of global food and beverage launches in 2018, rising to a still modest 3% in the US. Despite this relatively slow start (which included problems with a bitter aftertaste), the use of stevia as a natural sweetening ingredient has continued to develop. Research and product development is now bringing forth a new generation of blended sweeteners combining naturalness with high-quality sweetness.
Soft drinks are a leading application area for natural sweeteners. Put simply, consumers are interested in both clean label ingredients as well as reduced sugar content. It results in greater interest and use of natural non-nutritive sweeteners. Nearly 10% of US soft drinks launches in 2018 used natural non-nutritive sweetener ingredients and stevia was the major beneficiary of that new product formulation work.
Again, after a relatively slow start, ingredient suppliers and soft drink formulators have improved stevia’s functional and taste attributes. As a result, Innova Market Insights estimates that stevia now figures in more than 90% of new products that use natural non-nutritive sweeteners.
Some of the most high-profile applications for stevia are in the carbonated soft drinks market. Coca-Cola and PepsiCo are striving to produce the most palatable stevia-sweetened option that delivers both naturalness and sweetness. Again, the goal is an alternative to the more traditional artificial sweeteners, such as aspartame, used in low calorie products. Unfortunately, this activity has not yet had a significantly positive effect on the US low calorie carbonates subcategory. Category sales are falling at an even faster rate than regular carbonated soft drinks in a mature and stagnant market.
New sweeteners also are emerging, although this tends to be a slow process. Allulose (D-psicose) is a monosaccharide “rare sugar” with the taste and texture of sugar but without the calories. It was approved as GRAS (Generally Recognized as Safe) in the US in 2014 and has started to be used on a very limited scale. It is naturally present in products such as figs and maple syrup and has just one-tenth the calories of sugar, with none of the blood sugar impact.
Allulose featured in two of Coca-Cola’s Fuze tea drinks launched in the US in mid-2018. Fuze Meyer Lemon Black Tea and Fuze Tropical Mango Green Tea both use a blend of sugar, allulose and stevia leaf extract.
It is clear that the clean label trend has expanded during the past few years. Today’s increasingly mindful consumer is trying to make responsible food choices that are not only healthy, but also sustainable and ethical. When making purchase decisions, this consumer takes a more holistic approach in increasingly complex situations and weighs different factors.
Interest in clean label has kept organic and GMO-free claims in the spotlight in many countries. Today, however, rising levels of competition mean that new product offerings have to add greater value. Many manufacturers are focusing on additional benefits including other related clean-label areas such as vegan-friendly, raw and Paleo diets. Other positive attributes include local ingredients and sourcing, minimal processing and unusual and premium-style recipes and flavors, including the use of seasonal and limited editions.
Lu Ann Williams is director of innovation at Innova Market Insights, provider of market research services including the Innova Database. With more than 20 years’ experience in the food industry, Lu Ann is a trend expert and frequent public speaker at events worldwide. She leads a team of analysts and works with global clients. Contact her at firstname.lastname@example.org.