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As shoppers increasingly seek out ethical brands, communicating sustainability and health credentials transparently is more important than ever to the food and drink business model.
According to research by Innova Market Insights, transparency will be one of the top trends for the food and drink industry in 2021, with six in 10 global consumers interested in learning more about where foods come from.
“Transparency dominates consumer demand in 2021,” said Lu Ann Williams, director of insights and innovation at Innova. “As part of the broader sustainability trend, we currently see how brands are upping their transparency game to meet evolving consumer demands.”
Mike Hughes, head of research at FMCG Gurus, said consumers are increasingly becoming less trusting of brands – something which the pandemic has intensified. “The recent pandemic has meant that consumers have become concerned about a variety of supply chain issues such as the country of origin of products and the safe handling, storage, and distribution of products along the supply chain. As such, consumers want more information on the products that they purchase than ever before.”
“We all want to be sure that our food and drink comply to the highest standards, right along the food chain,” added Nicola Holden, professor in food safety at Scotland’s Rural College (SRUC). “In the UK, we have become accustomed to and enjoy world-leading quality standards, and transparency for where food comes from, how it is processed and shipped are integral to that.”
According to Lu Ann, the shift towards transparency seen in the food and drink industry is a result of an increasing focus on health and sustainability, so for brands and retailers, increasing transparency to meet evolving ethical, environmental and clean label consumers demands is key to winning customer loyalty.
“We see claims on-pack related to human and animal welfare, increased focus on supply chain transparency, plant-powered nutrition as well as sustainable sourcing,” Lu Ann said. “Brands adopting and pairing new packaging technologies such as invisible barcodes and near-field communication technology with creative, meaningful storytelling will be successful.”
Provenance is a key feature here, Nicola said, and Mike agreed that story-based marketing through packaging and advertising can help to bring the heritage and quality of food products to the forefront.
“By understanding the source of foods and beverages, it is also possible to understand the quality standards that have been implemented along the chain,” Nicola said. “For example, farm assurance schemes (e.g. Quality Meat Scotland, LEAF farms) have set criteria that producers must adhere to, but by doing so the customers are then able to trust the production system with respect to animal welfare, safety etc.”
However, recent research by GlobalData found that 32% of consumers were confused by on-pack marketing and health claims.
Cesar Revoredo, reader in food supply chain economics at SRUC, said, “For many consumers, it is difficult to grasp all the ‘standards’ behind the information they are bombarded with.” Cesar said retailers and producers need to be very active and inventive on how they pass information to shoppers.
“Consumers’ groups can also play a part,” he said. “For instance, RSPCA just published a letter saying that their dairy RSPCA approved producers will need to show that they use sustainable source soybeans.”
Ramsey Baghdadi, consumer analyst at GlobalData, added that to avoid consumers switching off, higher standards of transparency are needed, “such as using traceable technology throughout to avoid confusion and mistrust of final product claims,” he said.
Ben White-Hamilton, founder of Harvest Bundle sees “exciting opportunities for innovation and growth” in transparency. “Software – this is where the new growth will be found,” he said, for instance, apps that tell consumers how the food they’re purchasing was produced and where, its environmental impact and how many miles it has travelled.
“Much of the information is displayed at present, but it is more ‘take our word for it’. Software can change this and make it more factual, reliable and believable,” he said. The technology, in turn, will help consumers make more informed decisions and discover when a food brand’s commitment to transparency is genuine and when it is merely greenwashing.
Mike suggested QR codes on packaging and dedicated sections on company websites to sustainability and ethics, as well as blockchain technology. “Brands can become early adopters of such technology, providing information on all aspects of supply chain management and educating consumers on how to access this information,” he said.
Some are already trialling technologies to improve the transparency around their products. For instance, the Spanish Iberian ham sector has developed an app to allow consumers to determine the quality of their Iberian ham by scanning the barcode on the packaging.
“The initiative comes as consumers seek to be more informed than ever about food safety, quality, and sustainability, in light of the current health crisis. Consumers are more aware than ever of the crucial role that food plays in health and are increasingly seeking out products which are transparent in their production methods,” the Interprofessional Association of the Iberian Pig said.
It all comes back to trust, Ben said. “Sales revolve around trust, and in the case of food, trust has been lost. If businesses can adopt the developing software that helps build trust with the consumer around transparency, then they will see the benefit of loyalty – the holy grail of sales.”
For speciality food retailers and independent producers, however, this trusting relationship with customers is often already ingrained in their business ethos. In order to make the most of the rising demand for transparency for food and drink in 2021, communicating your business’ stance on sustainability and health will be the key boosting loyalty – and, in turn, sales.
This article was originally published on 2nd December 2020.