While reformulation takes time and money, 75% of North American manufacturers surveyed said revenues had increased, while 68% said margins had increased, claimed Daniel Haley, global platform leader for clean and simple ingredients at Ingredion, which has pioneered developments in clean label functional native starches.
“We knew it was driving top line growth, but we didn't know whether our customers were really benefiting from that from a profitability perspective, so it was fascinating to see that."
In some cases, cleaning up labels can improve nutritional profiles and save money, he added, noting that even customers that did not raise prices following reformulations were "able to reduce their total formulation cost or production efficiency in the process, allowing them to increase margin and revenue as sales grew.
"An example of this would be yogurt customers of ours using our latest multi-functional tapioca flours to replace modified starch; their unique texture also allows them to reduce fat content, improving the nutritional profile and cost of their formulations."
'The UK is well ahead of the US on clean label, but other countries in Europe are behind the US'
The percentage of manufacturers in North America (81%) who agreed that offering clean label foods and beverages was “extremely important” to their business strategy, was significantly higher than it was in Europe (36%), APAC (44%), South America (47%) and Mexico (52%), added Haley.
While some European countries – notably the UK - are "well ahead of the US" when it comes to clean label, said Haley, "other countries in Europe are behind the US, such as France, Germany, and Italy, although France is really catching up now.”
"In terms of ingredient acceptability in North America, there are a number of ingredients only accepted by approximately a third of consumers. Ingredients in this zone include Gellan Gum, Maltodextrin, Sodium Alginate, Carrageenan and CMC.
"There are then ingredients that split consumers down the middle when it comes to their acceptability such as pectin, inulin/chicory root fiber, Glucose syrup and Modified Starch.
"The clean label ingredients, accepted by two-thirds of consumers and above, include rice flour, corn starch, rice starch, gelatin, potato starch, citrus fiber and tapioca flour."
Daniel Haley, global platform leader for clean and simple ingredients, Ingredion
Clean label: ‘For consumers it's about familiarity more than anything else’
So how was clean label defined in the survey, and do definitions vary market by market?
“We were interested as part of the survey to understand how these companies define clean label themselves,” said Haley, “so we had a section within the study that addressed that, then we introduced them to our definition and asked them to respond to some questions along those lines.”
As to how consumers think about clean label, it’s not simply a question as to whether the ingredients come from a ‘natural’ source, but whether they are familiar, he said, noting that multiple ingredients regarded with suspicion by consumers are derived from natural sources, from methylcellulose (from wood pulp or cotton), maltodextrin, high-fructose corn syrup (from corn), and lecithin (from soybeans or sunflower seeds), to sodium alginate and carrageenan (from seaweed).
“For consumers it's about familiarity more than anything else; what's clear in all of our studies is that the consumer needs to recognize the source and for the name of it to reflect very simple processing, if there is any kind of indication of processing going on.
“So anything that sounds like a chemical has very low acceptability from consumers, even with some gums and hydrocolloids because consumers don't recognize where they come from.”
‘The vast majority of hydrocolloids have weak consumer acceptance’
For gums and hydrocolloids he said, “I'm generalizing here, but the vast majority of hydrocolloids have weak consumer acceptance. At the bottom end of the scale, you have methylcellulose, and xanthan gum, which is a very much misunderstood, and gellan gum.”
For starches, he said, “the word ‘modified’ can be [incorrectly] associated with genetic modification for a percentage of consumers, and then there's another percentage that associate ‘modified’ with chemical modification. So consumers are looking for, ideally a more simple starch label with the name of the base, such as corn starch or tapioca starch, but potentially even better is a flour label, as flour is considered less processed than starch.”
Overall, he said, “Consumers are becoming gradually more demanding and we’re on a continuum to what we call ‘simple,’ which is trying to make products only with a label that is truly authentic to what you'd expect if you made that product at home or in a restaurant.”
‘Clean label is more important for consumers on goods that are consumed on a daily basis’
While consumers generally want cleaner labels, they are prepared to give some brands or categories more leeway than others (keto enthusiasts are OK with erythritol – an ingredient you won’t find in grandma’s kitchen - in a keto baking mix, because they are watching carbs very carefully, for example).
While consumers also intuitively understand that you can’t replicate the functional qualities of egg or beef with just a couple of plant-based ingredients, next generation plant-based products will need to address ‘highly-processed’ criticisms, said Haley.
“In general, clean label is more important for consumers on goods that are consumed on a daily basis [as opposed to treats, for example], but the eating experience is still critical.
“In the initial phase everybody has rushed in and relied on ingredients they know have the functionality. But phase two is clearly now starting to take place; we're start we're getting increasing requests for clean label solutions to clean up those products.”