How are consumers thinking about transparency? FMI and Label Insight explain

By Mary-Ellen Shoup

- Last updated on GMT

Picture: Gettyimages-Goran13
Picture: Gettyimages-Goran13
Consumers are increasingly demanding transparency that goes beyond traditional label information and see it as a way to have a closer connection with their food, according to a consumer report by the Food Marketing Institute (FMI) and Label Insight.

The Transparency Imperative​ report was based on an online survey of 2,022 US grocery shoppers 18 years of age and older.

According to FMI and Label Insight,  transparency can be an effective way to build trust and loyalty with consumers. In fact, the report found that 86% of shoppers agreed that they would feel a higher sense of trust for food manufacturers and retailers who provided access to complete information on ingredients, including ‘easy to understand’ ingredient definitions.

Another recent study by Label Insight found that 75% of consumers are more likely to switch to a brand that provides in-depth product information beyond what’s on the physical label compared to a similar study in 2016 when 39% agreed they would switch brands.

A majority of shoppers (80%) said that they would more likely be loyal to a brand that provides in-depth product information that goes beyond the physical label, and 54% would be willing pay more for a product that has additional product information.

The most common and effective way to provide the additional product information consumers are searching for has been through digital channels such as apps and websites.

“We see clearly that transparency is only becoming more important to consumers,” ​Patrick Moorhead, chief market officer for Label Insight, said. “Their attitudes and preferences, particularly with the growth of e-commerce, make it clear that transparency is critical to growth and our industry must take action.”

Label Insight, for example, provides this type of data transparency of product information for CPG companies using the company's proprietary data science and machine learning capabilities to capture product labeling information and create more than 22,000 unique custom attributes per product. 

Consumers, in turn, can gain instant access to in-depth product information –  allergens, ingredient sourcing practices, third party certifications, social compliance, and sustainability programs – through the industry-backed SmartLabel platform​, accessible by smartphones, tablets, and desktops.

Health conscious consumers and transparency

The health-conscious consumer has been a huge driver of transparency for manufacturers and brands, according to the report.

With nearly half (47%) of US households having someone that follows a specific diet for various reasons, health-conscious consumers are more likely to place a premium on transparency, the report revealed. The survey also showed that households with children were more likely to care about transparency and place greater importance on ingredient and allergen information.

Health-conscious consumers are also more likely than general shoppers to pay more for in-depth product information – 61% vs. 54%.

When the label is not detailed enough, 89% of health-conscious shoppers will seek out information elsewhere.

What aspects of transparency are most important?

Consumers look at transparency in a few different ways from providing a complete list of ingredients, ingredient descriptions, and nutritional information to social and environmental claims and certifications.

According to the report, 80% of online shoppers agreed that it is ‘extremely important’ for brands and manufacturers to provide detailed product information followed by college graduates (76%) and higher grocery spenders (75%) spending $125/week.

The rise of e-commerce grocery shopping has resulted in higher expectations for product transparency, the report found.

Online grocery shoppers expect more product information (76%) when shopping online than if they were in a physical store; and 72% believe that getting product information is even more important when shopping online.

Millennials and boomers are looking for different information

The transparency attributes a shopper valued differed across generations, the report found. Baby boomers and Generation X are more focused on having a complete list of ingredients and nutritional information than millennials.

While millennials do care about complete nutrition and ingredient information, they are also more likely than older generations to seek out allergen information, certifications, and claims, as well as animal welfare, fair trade, and other social and environmental practices.

“The new shopper mindset requires brand owners to think about their products well beyond the traditional label and respect a more digitally-minded consumer,” ​added FMI VP, industry relations, Doug Baker.

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