CPGmatters: Nutritional Labeling Provides CPGs, Retailers with Unique Competitive Edge

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Mar 22, 2010
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By Dan Alaimo

Through
a special arrangement, presented here for discussion is a summary of
a current article from the monthly e-zine, CPGmatters.

Manufacturers can gain a competitive advantage
by working with nutritional ranking systems, especially those that provide
information to shoppers at the point of purchase. The new systems seek
to simplify this data, while maintaining the credibility of sound fact-based
nutritional advice.

NuVal ranks supermarket products on a 1 to
100 scale based on nutritional information presented in on-pack labels,
and after a proprietary analysis. The NuVal score is presented on the shelf
label next to the price in retailer chains paying a licensing fee. The
higher the score, the more nutritious the food. Competitive programs are
Guiding Stars and Smart Choices.

NuVal, LLC is a joint
venture formed in 2008 by supermarket cooperative Topco Associates, Skokie,
Ill., and Griffin Hospital of Derby, Conn., a non-profit community hospital,
and home to the Yale-Griffin Prevention Research Center. While NuVal is
still a new company – it started in 2008, and went into its first two chains,
Price Chopper and Hy-Vee, in January 2009 – manufacturer acceptance has
been good, says Robert Keane, spokesman for NuVal in Braintree, Mass. It
added Meijer later in 2009, and will launch in United Supermarkets (Lubbock,
Texas) this month.

In most cases, NuVal obtains the information
it needs to evaluate products on store shelves from nutrition fact panels
and nutrition labels, “the way everybody else does,” he notes. “The manufacturers
aren’t sending us anything. Part of what makes NuVal important is we are
independent of food manufacturers.”

Late last month, the American
Journal of Clinical Nutrition
published a study endorsing key parts
of NuVal scoring. For example, the study found that higher-scored items
in the NuVal system correspond to the DASH, or Dietary Approaches to
Stop Hypertension diet. The study also found that NuVal’s 100-point scale
was preferred to other four-tier systems by a ratio of three to one.

The company has set scores
on over 41,000 items so far in about 160 categories.

“The way scoring
happens, we take down all the information – the nutrition fact panels,
and the nutrition labels – to make sure we get an absolutely accurate score.
At that point we inform all manufacturers of the scores their products
have received and sometimes they will have questions. There have been times
where some manufacturers have sought to increase their score,” Mr. Keane
says.

After signing a non-disclosure
agreement to protect NuVal’s proprietary ONQI algorithm, “we can go through
with them and explain why their product scored the way it did.” This may
result in a change in ingredients or formulation, and the products are
then re-scored.

“But the score itself
is done completely independently, which we think is important to gain customer
trust,” Mr. Keane adds.

The recent news that the
U.S. Food and Drug Administration (FDA) is devising its own on-pack nutritional
labeling has poured cold water on some programs like this. But NuVal is
proceeding, while keeping an eye on what FDA comes up with.

“If anything, [the FDA
plan] brings the whole idea of nutritional labeling into the spotlight.
It shows that people are really looking for this kind of guidance,” he
adds.

Discussion
Questions: Should food retailers be investing in independently-run
nutritional ranking systems like NuVal rather than those being run
by the industry or the government? Do you think consumers will
respond better to a 100-point scale versus a four-tier nutrition ranking
system?

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11 Comments on "CPGmatters: Nutritional Labeling Provides CPGs, Retailers with Unique Competitive Edge"


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Richard J. George, Ph.D.
Guest
11 years 1 month ago

While I am not necessarily in favor of a government-run nutrition evaluation system, think only of the MyPyramid disaster, there is the need for a system that is easy for the consumer to understand and one that the consumer trusts. While organizations can be applauded for addressing this critical issue, research has shown that there is more rather than less confusion by the introduction of all of these alternative evaluation systems.

I would support a government run system if it were fair, easy to understand and apply, and if consumers considered it trustworthy–the real crux of any third party intervention into the food distribution equation. Having said all of this, it appears that the efforts of NuVal address many of my concerns, except for which system is the best for the consumer. In other words, any new system, however fair and exhaustive in its research and intent, causes confusion when consumers juxtapose the new evaluation tool with existing tools.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 1 month ago

I recently visited a Hy-Vee store and saw the NuVal labeling and scoring system on shelf. I like the concept, but as with most solutions it is not 100% of the answer. A score can help a shopper narrow their selection, but a deeper dive is then needed to understand the actual ingredients and a breakdown of fat, protein, carbohydrates, etc.

I think it would be interesting to see NuVal expand their scoring system to include information related to ingredient sourcing. With so many issues being related to ingredient origins, it would be helpful for a shopper to not only know a nutritional score, but also an origin score as well.

The government is slow to move so NuVal plays a valuable role in getting the topic of nutrition front and center. In particular, I liked the fact that manufacturers were actually improving their ingredients to score higher.

Dr. Stephen Needel
Guest
11 years 1 month ago
There are two assumptions in this article, neither of which may be true. First, people are nutrition-value driven when shopping and second, there is confusion at present. Yes, some people are purely nutrition driven, but some are sometimes nutrition driven, and some are never nutrition driven. A large proportion of the stuff we sell in grocery stores wouldn’t exist if nutrition were the key driver of consumer choice (I’m thinking my 2 favorites–Cocoa Puffs and Double Stuff Oreos). It makes sense for stores to embrace nutrition information delivery if they believe their customers care deeply enough to change their purchasing behavior in a way that benefits the store. It is not, however, the retailer’s responsibility to make this information prominent. The FDA is always playing with nutrition labels with the goal of making it easier for people to understand what they are and are not getting in their food. Does anyone have research that says consumers still don’t get it, that faced with a set of products in a category, they are incapable of correctly… Read more »
Ralph Jacobson
Guest
11 years 1 month ago

Here’s a different perspective, hopefully. This system isn’t terrible, however no one should rely on this method to determine their entire dietary consumption. Although Jack LaLane has never eaten a piece of cake in his 90+ years, I’ll call him an anomaly. We all need to splurge once in a while. Wouldn’t it be cool to have taste labeling listed, too?! (Sweet, semi-sweet, bitter, etc.)

Ryan Mathews
Guest
11 years 1 month ago

Stephen is right–it’s not clear that people are really nutritionally driven.

Also I worry a bit about the “Alar Effect”–declaring some products to be healthier directly implies that the majority of products sold are, in some way, not good for you.

Finally, I’m nervous about the idea of third party verification in this area. So Retailer A uses one system and Retailer B uses another. What are shoppers supposed to believe?

I think this one just needs more thought.

Camille P. Schuster, PhD.
Guest
11 years 1 month ago

The devil is in the details. NuVal’s system rates products based on a diet for hypertension. What about people with allergies? What about diabetics? What about for people with hypoglycemia? What is a “healthy” diet? Without an answer to that question how can there be a rating system? Without an answer to that question there will be many proposed rating systems that provide different answers. As a result, the consumer will be confused and not read any of the ratings.

Gene Detroyer
Guest
11 years 1 month ago

As Stephen says, “A large portion of the stuff we sell in grocery stores would not exist if nutrition were the key driver of consumer choice.” But, it is critical to give the shopper as much information as possible to make appropriate choices. With the right information it might cut my consumption of Double Stuff from 3 times a week to 3 times a month.

Certainly, history tells us that the objective of the industry is not to provide correct information to the consumer but to sculpt the information in such a way as the consumer thinks the product is better (more nutritional) than it really is. Chocolate Special-K???

The FDA has also proved that they can’t fully inform the consumer as the industry has a huge influence on them. The problem with the Food Pyramid debacle is that it was always pandering to the industry lobby.

The NuVal solution looks very good. Gee, it might even radically change consumer behavior. Truth is a radical idea.

Gregg London
Guest
Gregg London
11 years 1 month ago

In response to Stephen Needel’s comment–“I’m not suggesting labels are perfect, but I’ve not seen research that says they are bad either”–the reason for this is simple: no such research (as relates to an understanding or misunderstanding of the FDA Nutrition Fact Panel) exists. However, when it comes to ingredients, numerous studies have cited the inability to truly understand or grasp the information presented, and thus, make an informed decision.

The Center for Science in the Public Interest (CSPI), motivated by the FDA’s emphasis on “front of package” Label Claims, has proposed a makeover for nutrition labeling, including more emphasis on calories, added sugars, saturated and trans fats, and sodium.

Finally, with regard to Nuval, their system is but one of many–Hannaford Guiding Stars, Giant Foods Healthy Ideas, Supervalu Nutrition IQ, etc. As others have pointed out–which one do you “trust”?

Jack Pansegrau
Guest
Jack Pansegrau
11 years 1 month ago
I’d like to agree with Gregg London – the CSPI label makeover is really a significant step in the right direction on the basic nutrition label. Since reading that article, call me naive or ignorant, but I never ‘knew’ that “Brown Rice Syrup” was simply sugar. Now I see it more often and I also note the manufacturers ‘gaming’ the system by splitting their sugar sources so they ‘drop down’ the label as independent ingredients and perhaps sneaking in ‘below the radar’ even among those of us who read the labels. >As CSPI suggests, grouping all sugars together might put ‘sugar’ at the top of the nutrition label as opposed to several different types listed further down. Adding a ‘Scoring System’ like the one mentioned, along with the revised Nutrition Label would be a good start. But as “Food Rules” points out, don’t be put off by the ‘Silence of the Yams,’ noting that simple, ‘whole foods’ do not have the muscle or dollars to get into the Nutrition Labeling business like big CPG firms.… Read more »
Ed Dennis
Guest
Ed Dennis
11 years 1 month ago

It would be nice if there was one non profit lab that would examine and rank products from 1 to 10 on nutritional value. Like national health insurance, all would have to participate. Each company would have to pay for their product’s examination. If the product does not achieve the score the manufacturer is seeking then the manufacturer can reformulate and resubmit the product. All product would have to show the rating number on the top right corner of each panel of the product package. If package is a wrap, then front and back display of the rating number would be required.

Olga Yurovska
Guest
Olga Yurovska
11 years 1 month ago

I am a consumer who shops at Meijer, and I can testify that my at-shelf decisions have been hugely swayed by the NuVal system. I have always been nutritionally-minded, but before NuVal, nutrition was sometimes too abstract for me (who has time to read every label?). Seeing that fat free milk scores in the 90s and 2% in the 60s it makes it so much easier to reach for the right stuff! My kids eat a lot of packaged foods, seeing how low they score, made my hair stand up. It was a wake-up call to eat more veggies for my family. I am sure there are many people like me that really appreciate this system, however imperfect it may be.

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