The Bottom Line or Consumer Demand–Which is Driving Food Transparency?

by Alexina Cather, MPH

Consumers want to know what they’re eating. Or at least studies make it seem that way. A report by Response Media found that 99 percent of people want transparency in their fresh food products, 98 percent want transparency in packaged foods, and 70 percent stated that what they buy is always or often influenced by transparency.

As reported by Food Dive, “transparency has been one of the biggest buzzwords in the food business in recent years.” Consumer demand has been driving producers to use more sustainable practices and increasing sales of organic and locally-sourced food while also influencing companies like McDonald’s, Starbucks and KFC to make new sourcing commitments (see here, here, and here).

But let’s backtrack. What is food transparency anyway?

For the consumer, transparency simply means knowing how a product was made. A transparent food brand would provide its customers with information on the product’s ingredients, sourcing, production process, sustainability, and so on.

How much info does the FDA require?

Not that much. The FDA’s oversight is mostly limited to the overall safety and efficacy of food and drug products. Finer details, such as sustainable business practices, are not in their jurisdiction. Nor do they have to approve the use of new ingredients. Companies can hire their own scientists and consultants to determine whether or not an ingredient is safe. This is done for efficiency’s sake.

In July, the FDA ruled that soy leghemoglobin – a protein that carries heme, the molecule used by Impossible Foods to give their plant-based burgers a meat-like juiciness – is safe to eat. Technological innovations in the food industry have caused the federal government consider some challenging questions, such as whether the it is the USDA or the FDA that has regulatory authority over products like lab meat, and whether these plant-based products can even be labeled  “meat” at all.

But Impossible Foods didn’t need a green light from the FDA to make their burgers. They went to the agency voluntarily in order to be transparent with their customers. After receiving FDA approval, CEO and founder Pat Brown said:

Getting a no-questions letter goes above and beyond our strict compliance to all federal food-safety regulations. We have prioritized safety and transparency from day one, and they will always be core elements of our company culture.

Brands like Impossible Foods are responding to consumers’ growing demand for the company’s accountability regarding products they purchase. Mintel’s global food and drink trend report for 2018 named transparency the number one trend of the year (technological improvements in food manufacturing, including lab meat and GMOs, earned fifth place). Jenny Zegler, food and drink analyst at Mintel, said:

In addition to disclosing more specific transparency details, the next wave of clean label challenges manufacturers and retailers to democratize transparency and traceability so that products are accessible to all consumers regardless of household income.

Do consumers really know what they want?

Label Insight surveyed 1,500 consumers and found that almost all respondents – 94 percent – said it is important to them that the brands and manufacturers they buy from are transparent about what is in their food and how it is made. With regard to finding trustworthy sources of information, the study found that:

Despite consumers valuing transparency, a mere 12 percent ranked brands as their most trusted resource for information about what is in their own food, ranking them nearly 10 percent lower than the government (20 percent).

Still, 67 percent of consumers believe that it is the brand’s responsibility to provide this information. More than a third said they would be willing to switch brands if their current brand did not provide enough information about its product. In addition, another report by Label Insight, which surveyed more than 2,000 consumers about how their preference for transparency affects their loyalty toward brands, found that 56 percent of respondents would be loyal to a brand for life if it provided complete transparency.

A Snacking Trends Reports describes the cultural shift in millennials, finding that this demographic is increasingly making purchasing decisions based on the tenets of self, society and planet:

…the Millennial generation is the “prove it” generation. These consumers will never take your word at face value. Millennials expect proof of Self, Society and Planet starting at the brand level reaching all the way back to the manufacturer…for brands to ignore this would be a miss. Instead, they must embrace the new standard that the Millennial generation has implemented. It’s not just about talking the talk; brands must prove how they are having a positive impact on Self, Society and Planet.

And again, according to Label Insight:

As mobile technology and ubiquitous connectivity have created an expectation among consumers for on-demand, specific information about everything from medicine to sports to child psychology, their ability to access and curate detailed food-product information has not kept pace.”

Of course, more information is not necessarily the answer. Supermarkets are teeming with products labeled as GMO- and antibiotic-free, organic, and “natural.” But some of these labels are too ambiguous for consumers to understand at first glance.

The FDA has been working on a new Nutrition Innovation Strategy, with plans to redesign nutrition labels and finally define what the “natural” label really means.

So what’s driving the demand?

Forbes calls trust “the new currency of brand loyalty” for millenials. New generations of consumers want to know that the foods they eat benefit both themselves and the planet, and most of them want the brands themselves, not the government, to keep them informed.

Consumers today have high standards for the businesses they buy from. Brand recognition no longer makes the cut. Consumers want products that make them feel that they made the right choice for themselves, others, and the environment.

Transparency isn’t necessarily cheap, however, and some food manufacturers will have to adjust their business models in order to keep their customers’ loyalty. This is good news for brands willing to provide transparency: they’ll capture a significant and growing chunk of the market. And if food brands don’t want to risk losing more than a third of their clientele, they’ll have to meet the changing demands of consumers.

Related Articles

Subscribe To Weekly NYC Food Policy Watch Newsletter
Subscribe to our weekly email newsletter today to receive updates on the latest news, reports and event information
No Thanks
Thanks for signing up. You must confirm your email address before we can send you. Please check your email and follow the instructions.
We respect your privacy. Your information is safe and will never be shared.
Don't miss out. Subscribe today.