Clean label-loving Millennials pose a challenge for food retailers

Discussion
May 19, 2016
Warren Thayer

Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.

By whatever name, “clean label” products are hot and on-trend with consumers, representing a big opportunity. But what are clean label products, anyway?

Some folks define them as those without artificial colors, flavors, sweeteners, preservatives or trans fats. Others point to short lists of pronounceable ingredients.

The push for cleaner labels, less processing and simple ingredients is picking up strength. Consumer ambivalence toward the processed food industry is clear in a proprietary Packaged Facts National Consumer Survey conducted in January 2015 among 2,284 U.S. respondents age 18+. Fully 67 percent of surveyed consumers favor groceries with fewer and simpler ingredients, and 61 percent agree that “there are specific ingredients I avoid and make sure aren’t present in the packaged foods I buy.”

In addition, about two out of three consumers take nutritional content statements, ingredient-free statements (a clean label element), and statements about health benefits (a nutraceutical element) into consideration when buying packaged foods and beverages. And 79 percent and 78 percent of consumers, respectively, consider the “ingredients list” and the “Nutrition Facts panel” very or somewhat important to their food and beverage purchasing decisions, with more than half of consumers considering them “very important.”

Product preferences particularly define Millennials who demand more out of retailers in curating better options, according to Elsha DeJong, director of sales at Five Star Foodies.

Joe Kent, director of consumer brands at InnovAsian Foods, says Millennials are known for being “beyond the flip” — they expect vendors to engage with them on the front of the package so they can more easily calculate health benefits or see nutrition callouts.

Whether shoppers know and use the term “clean label” or not, they’re definitely looking for products along the lines mentioned above. It’s no surprise that “clean label” was touted at seemingly every booth during the recent Expo West show in Anaheim. Both retailers and manufacturers are eager to get on board. This, along with trending consumer research, suggests we may be entering the first phase of a clean label tsunami.

DISCUSSION QUESTIONS: How big is the potential of “clean label” products? Will Millennials help drive them closer to the mainstream? How can retailers capitalize on this segment?

Braintrust
"In addition to the pressures by Millennials, we are at a conjunction of easy access to mountains of data, and revival of a back-to-the-land movement."
"As the world gets more complicated, consumers crave simplicity and transparency. The push for clean labels is part of this movement. "
"It’s not just Millennials who demand clean labels and cleaner foods. It’s Boomers too, in their never-ending quest to stay on the planet forever."

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10 Comments on "Clean label-loving Millennials pose a challenge for food retailers"

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Max Goldberg
BrainTrust

As the world gets more complicated, consumers crave simplicity and transparency. The push for clean labels is part of this movement. Consumers want to know what they are putting in their bodies, and they want that information delivered in a simple, easy to understand format. Retailers can capitalize on this by adopting this strategy for their private label products and prepared foods. Now if we could just do something about those seemingly endless, and often needless, line extensions …

Mohamed Amer
BrainTrust
The clean label potential is as real as it is irreversible. In addition to the pressures by Millennials, we are at a conjunction of easy access to mountains of data, revival of a back-to-the-land movement and a desire for healthier lifestyles. The clean label movement may be catching fire from Millennials but will be fanned by other generations — including the aging Baby Boomers. Retailers will work with their CPG partners to stay connected with consumer trends and communicate the values that both seek to deliver to their customers. This is part of the changing relationship between brand/retailer and consumer.
Anne Howe
BrainTrust
It’s not just Millennials who are demanding clean labels and cleaner foods. It’s Boomers too, in their never-ending quest to stay on the planet forever. The best way to do that is still to eat real food, cook from scratch and avoid as many packaged products as you can. But, given the complicated lives we all live, clean food with clean labels is great. I just wish it didn’t take so much time to sort it all out while shopping. Perhaps, like gluten-free products, retailers should collect all the clean label foods in key areas for awhile before shoving them… Read more »
Zel Bianco
BrainTrust

I think clean labeling will continue to gain momentum especially since consumers seem to be moving away from processed food in favor of healthier choices. All age groups seem to want additional transparency with their food choices. Going forward, companies need to better define what clean labeling means and understand what their customers need.

Ralph Jacobson
BrainTrust

It’s not just Millennials who are demanding these products. We aging Baby Boomers want the same thing. Organics have been around since at least the 1970s, yet they are only now catching on a bit more. These clean label products will also catch on in a big way. It’s only a matter of time.

Tony Orlando
BrainTrust
There is definitely room for clean labels, but processed foods will not completely go away, as lower price points are still needed to provide value for consumers who are looking for bargains. The last five to 10 years have seen tremendous growth in the area of all-natural and healthy foods that not only drive growth, but profits as well. Private label gourmet is helping stores build loyalty, as online sales are pushing all of us in business to keep up with new ways to to keep customers shopping locally. This is a win-win for all of us, if we can… Read more »
Craig Sundstrom
Guest
I’m unclear on whether or not Warren is referring to products that are truly clean — however we define a loaded term like that — or simply marketed as such (the fact that term “label” is used is telling), but let’s proceed on the assumption that there will be more of both. Obviously the potential exists, and I expect it will grow (P&G’s decision to discontinue its Ivory Liquid Soap — seemingly a prototypical clean label — notwithstanding) … but still remain “niche-y.” And we’ll also see calls for more relaxed labeling requirements (higher thresholds for listing ingredients). Why? The… Read more »
Roger Saunders
BrainTrust
For “Clean Label” to take scalable, broader steps off the shelf and into consumers shopping carts, they’ll have to be certain they are in alignment with the reasons that consumers are in rolling through stores an online in the first place. Are they meeting consumers’ needs in terms of price, location, selection, quality, fresh, service, advertising/promotions, package design, in-store experience and knowlegeable employees to help explain the products, unique product proposition, and about 15 other “care-abouts” the consumer has? Tough to be the lone body of work in units that have 50,000+ SKUs. Start with the Millennials in most categories,… Read more »
Patricia Vekich Waldron
BrainTrust
Patricia Vekich Waldron
Retail and Marketing Expert; Former IBM Executive
1 year 6 months ago

I have a Millennial Mind-set … clean living is important to me as well!

Peter Stark
Guest
1 year 6 months ago

It’s important for companies to give the consumer clean labels, people want to know the relevant information on food and drink that they consume. For me that includes what kind of exercise they should complete to work that food or drink off. This article explores the idea further!

wpDiscuz
Braintrust
"In addition to the pressures by Millennials, we are at a conjunction of easy access to mountains of data, and revival of a back-to-the-land movement."
"As the world gets more complicated, consumers crave simplicity and transparency. The push for clean labels is part of this movement. "
"It’s not just Millennials who demand clean labels and cleaner foods. It’s Boomers too, in their never-ending quest to stay on the planet forever."

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