Trans fat label law could lead to new opportunities
new trans fat labeling law, in effect as of yesterday, despite the
panic this has caused over the past two years.
The new Food and Drug Administration (FDA) labeling rules, first announced in 2003, and which now require manufacturers to label the trans fat content of their products, could present an opportunity for many firms.
The requirements, which have motivated food manufacturers to modify their formulas to cut out trans fats, are directing them to the growing trend of healthy food purchasing.
Products with ingredients that contain lower or no trans fatty acids are already gaining consumer recognition, and the new labeling regime will simply reinforce this trend.
There is evidence to support this. US sales of products labeled "no trans fat" increased 12 percent to $6.4 billion for the 52 weeks ended Oct. 2, 2004, compared with the previous 52-week period, according to New York-based AC-Nielsen.
Trans fatty acids (TFAs) are formed when liquid vegetable oils go through a chemical process called hydrogenation. Common in a range of food products - biscuits, chips, doughnuts, crackers - the hydrogenated vegetable fat is used by food processors because it is solid at room temperature and has a longer shelf life.
But research suggests that trans fats raise LDL (bad) cholesterol levels, causing the arteries to become more rigid and clogged, and increasing the risk of heart disease. This, in turn, prompted the new trans fat labeling rules.
The new rules affect nearly all FDA regulated food labels. Not since 1993, when compliance for the Nutrition Labeling and Education Act of 1990 became mandatory, have so many labels required revision.
Food companies must comply, and the winners are likely to be those that see the change as an opportunity to tap the health market.
In anticipation of the new labeling requirements and growing consumer awareness of trans fat, oil suppliers have been busy with new oils and oil blends that cut trans fat in foods. Suppliers of oils including palm, soybean, canola and sunflower seed are increasingly emphasizing how their oils may help grain-based foods manufacturers reduce or even eliminate trans fat in their products.
These alternative oils look set to greatly increase their market share over the next decade.
The consumer turn away from trans fats is also backed by a general increased health awareness and move towards healthier goods. According to Euromonitor, the US retail market for functional and fortified packaged foods grew 8 percent between 2002 and 2004, from $4.46 to a projected $5.22 billion. By 2009 it is expected to be worth $6.92 billion.
