Label Insight expects to expand in 2017 as demand for clean label and transparency continues to grow

12-Jan-2017 - Last updated on 28-Feb-2017 at 08:22 GMT

A previous Label Insight study shows 39% of consumer would switch from their current preferred brand to one that offered more product transparency. Pic: ©iStock/Highwaystarz

Higher level of transparency will display a measurable impact on sales of CPG, shopper data firm Label Insight recently told BakeryandSnacks. But so far, most brands have taken a “wait-and-see” approach towards action.

“Brand transparency and authenticity is at the top of consumer’s lists. We believe their dollars will increasingly flow to brands that provide that transparency,” Label Insight’s CEO Paul Schaut said.

Paul_Schaut1 — CEO of Label Insight, Paul Schaut

“The industry is refining its ability to measure financial implications of becoming transparent and authentic. Everything from the way products are made, packaged and explained to consumers will change dramatically.”

The Chicago- and St. Louis-based firm doubled it team in 2016, and will continue this rapid pace of expansion throughout 2017.

This site previously reported Label Insight partnered with Nielsen to harmonize product data across all systems.

Help consumers sort out ingredients

Brothers and founders of Label Insight, Anton and Dagan Xavier, did not start their business as a commercial enterprise in the first place.

When their father was required to live by a strict diet due to a health condition, they sifted through the vast array of products and ingredients that would be harmful to him.

After realizing the difficulty in accomplishing this goal, the Xavier brothers began building digital tools with their childhood friend (current CTO), Dheeraj Patri. As the tools became more robust and sophisticated, Label Insights was launched.

Major bakery and snack companies, including Unilever and Food for Life, have already adopted SmartLabel program, a Grocery Manufacturer's Association's initiative that gives consumers access to more detailed product information. Label Insight assists brands and companies looking to create a adopt SmartLabel.

“Through online landing pages, consumers can find product information organized in a consistent manner, including allergens, ingredient sourcing practices, third-party certifications, social compliance and sustainability programs, usage instructions, advisories and safe handling instructions, and company and brand information,” Schaut said.

Clean label is not a standardized term

BakeryandSnacks has observed that both CPG and ingredient companies are considering clean label as their business priority as a result of boosting product transparency. But some companies, including DuPont, has previously pointed out the definition of clean label could vary by company and by channel.

“Clean label is not a standardized term and isn’t regulated by the FDA or USDA,” Schaut said.

“In general, a clean label measures the level of transparency a brand is able or willing to provide. For example, formulating a product to be free of artificial ingredients is one level of clean label. But telling the story around ingredient origins, GMO transparencies and sustainable production practices takes it many steps further.”

He added that Label Insight and the FDA have been in partnership for nearly seven years.

“As a result, we work with, and have access to, well over 200 scientists at CFSAN (Center for Food Safety and Applied Nutrition),” Schaut said. “This helps us to stay current on initiatives such as New Label or the Sodium Reduction Guidelines.”

“We believe detailed and accurate product data is at the core of this trending change – giving consumers what they want and will pay for.”