The Future of Nutrition Labeling for Food and Drinks in Europe: Evolving Consumer Needs, Manufacturer and Retailer Strategies and Market Opportunities

NEW YORK, Nov. 8, 2010 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:

The Future of Nutrition Labeling for Food and Drinks in Europe: Evolving consumer needs, manufacturer and retailer strategies and market opportunities

http://www.reportlinker.com/p0289108/The-Future-of-Nutrition-Labeling-for-Food-and-Drinks-in-Europe-Evolving-consumer-needs-manufacturer-and-retailer-strategies-and-market-opportunities.html

'The Future of Front-of-Pack Nutritional Labeling in Food and Drinks' report aims to dispel some of the myths, compound some of the confusion and clarify many of the complications surrounding the issue of point of purchase labeling in the food and drink market. Taking a global perspective, the report was written in the first half of 2010 during a time of economic turbulence, political changes and regulatory transformations around the world. It is therefore as forward focused as possible, while providing insight into current, emerging and evolving influential trends and market drivers. As one nutrition labeling expert told the author during the report research, there is "never a good time to write a report like this, as so much changes so fast". However, there is significant demand for an independent report from within the food and drink industry that provides an overview into the nutrition labeling options being considered by the regulators and major players. This report contains analysis of the influence of mandatory and voluntary labeling regulations on new product development (NPD), marketing and branding strategies, alongside an outline of consumer, manufacturer, retailer and regulator perspectives.

Every year new products are launched that make health claims. The functional food and drinks market has been one of the biggest success stories in the past decade, providing much-needed double-digit growth in the industry. However, the market is experiencing a significant drop in the huge growth that has been typical over the past decade. It is becoming an increasingly difficult market for NPD and a risky investment if the correct marketing, branding and NPD strategies are not adopted that suit the individual markets being targeted. Unilever's soy fruit juice, AdeZ, is a prime example of a functional failure. Unilever spent €15.1m launching its first major UK brand in 12 years. It failed to even equal this investment, with €10.7m in sales before being pulled 18 months later in April 2008.

The depth and differentiation in health claims is one of the primary reasons why regulators feel the need to step in and act. There are concerns that consumers are being confused, misled and even deliberately duped by some manufacturers who make wild, bold and unfounded claims about the health benefits of their products. The regulators are calling for products to make honest health claims that are supported by sufficient, credible scientific evidence. There are also calls for a more unified system of labeling which will make it easier for consumers to make a more informed decision about which food and drink they should buy – if they are indeed looking to make the healthier choice.

Front of pack labeling (FOP) is the primary focus for regulators and forms the main part of the discussion in this report. The objective of this report is to provide some clarity in the nutritional labeling debate and assist manufacturers in their quest to make the right (and least costly) decision for their brand portfolio for the long term.

Key Features of this report

- This report considers the four primary groups within the food and drink industry that are both influencing - and being influenced - by existing, emerging and potential mandatory and voluntary nutrition labeling rules, regulations and policies. These are: consumers, manufacturers, retailers and foodservice.

- The major happenings in terms of mandatory and voluntary FOP labeling are examined. , The best-practice strategies that have already been implemented in countries such as Canada and Sweden (as well as the lessons they are learning and currently adapting to) are highlighted alongside the different schemes that are being considered by countries such as the UK and US, and preferred schemes in Ireland.

- The latest news from the European Nutrition & Health Claims Regulation is included in chapter 3, complemented by analysis of its impact on the 27 EU Member States and the rest of the world. This forms part of the regulatory audit and also includes a timeline 2008-2010 of EFSA opinions and workings, which puts the regulation and the intricacy of its development in perspective.

- Consumer research studies are analyzed in conjunction to get an appreciation for consumer interest, awareness, demands, usage and consumption habits in relation to nutrition labeling.

- A regulatory audit has been conducted to compare labeling schemes and considerations under proposal in a number of different countries around the world including the UK, US, Sweden, Norway, Denmark, Australia, New Zealand, Ireland and Canada.

- Functional food and drink market value forecasts put the nutrition and health labeling issue in context. New product launches are considered alongside health claims such as bone health and gut health to assess the impact of the labeling debate on innovation.

- Top 10 claims in food and drink NPD in 2009 are analyzed from the perspective of which claims are most prevalent.

Key benefits from reading this report

- Understand the current debate surrounding nutrition labeling, health and nutrition claims, FOP versus BOP, voluntary versus mandatory regulation and everything in between!

- from a global perspective

- on a country/regional basis

- Help with your decision about whether to adopt a particular FOP nutrition labeling scheme now … or wait.

- The impact your decision regarding FOP nutrition labeling will have on market innovation, your company's reputation and CSR, the food and drink industry, consumers, retailers and regulators.

- Understand which FOP nutrition labeling schemes are most likely to succeed, which are already being used and which are being deliberated.

- Assess the impact of voluntary industry-led action through analysis of current and previous schemes (such as GDAs in Ireland and the Smart Choice Program in the US: two very different stories with the first succeeding well and the latter being pulled by the US FDA).

Key findings of this report

Sweden's Keyhole FOP labeling system is frequently cited as a best-practice example that has stood the test of time in the global debate. First established in Sweden in 1989, it became accepted as a Nordic label for healthier food and drink in Denmark, Sweden and Norway on June 17, 2009.

The US is the biggest functional food and drink market in the world by value. By 2012, it is estimated that it will reach US$36.7bn with strong annual growth forecast from 2007.

According to the European Consumers' Association, BEUC, independent research shows that a system of color-coding on the front of packs of processed food packaging which concisely displays whether the key nutrients of fat, saturated fats, sugars and salt - are high, medium or low with red, amber and green 'traffic lights', is best understood by consumers.

Many consumers are brand loyal and will scrutinize the labels of new products to determine if trial is necessary, according to aTate & Lyle study.

According to the FDA, More than half (54 percent) of consumers in the United States often read the food label when buying a product for the first time, which is a 10 percent increase from 2002. These consumers are also increasingly aware of the link between diet and heart disease.

P41 A Dutch study concludes that consumers consider interventions consisting of a larger variety of available portion sizes, pricing strategies and serving-size labeling as most acceptable. Ultimately, the study shows that people want choice and if they want to have a large meal, they should be able to do so.

According to Healthy Dining, a US group of restaurant-industry nutrition specialists, the process of obtaining accurate nutrition information for a full menu can cost from US$5,000 to more than U$35,000 depending on the number of menu items, number of fried items, and the complexity of the menu.

P55 Across six product categories, 16.8 percent of shoppers looked for nutrition information on the label, with the nutrition grid (table or list), GDA labels and the ingredients list as the main sources consulted. Women have a higher probability of looking for nutrition information and lower social grades having a lower probability.

Key questions answered by this report

- What are the main FOP nutrition labeling schemes being considered around the world?

- When will EFSA conclude its current work on health claims and when will it all be finalised and enforced?

- Is FOP nutrition labeling an issue being debated outside of the UK and US?

- What are the benefits of FOP nutrition labels?

- What are the problems with FOP nutrition labels?

- Are there alternatives to FOP nutrition schemes?

- What should we be doing now ahead of mandatory regulation from Europe and/or our domestic market?

Table of Contents

About the author 2

Disclaimer 2

Executive summary 9

Nutritional labeling by country 9

Impact on consumers, manufacturers and retailers 10

NPD analysis 11

Conclusions and action points 12

Chapter 1 Introduction 13

What is this report about? 13

Report definitions 14

Research methodology 14

Report structure 15

Chapter 2 Nutritional labeling by country 16

Summary 16

Introduction 17

The three main front-of-pack labeling systems 17

Country analysis 19

Australia and New Zealand 19

Prevailing issues 20

Current FOP labeling debate 20

The US 22

Food labeling chaos continues in the US, but regulation is on the horizon 22

Voluntary industry-led regulation has been halted by the FDA 23

Obama's FDA is working on an FOP regulatory scheme 25

Canada 28

Focus on Europe 34

Voluntary labeling 35

Definitions according to the regulations 37

Articles 13.1, 13.4 and 13.5 38

4

Article 13.1 38

Restrictions on the use of certain health claims 39

What does the regulation actually cover? 40

When will it be implemented? 40

EFSA nutrition and health claims approval timeline 41

What are the problems with the NHCR? 42

Lack of understanding of the process 43

Lack of two-way dialogue 44

High failure rate of claim submissions 44

Timetable for review and adoption 45

Advice for manufacturers with a negative opinion from Europe 46

Industry responses 46

Enforcement in action 47

Consequences of non-compliance 48

Ireland 49

Nordic region 50

Consumer approval for the Keyhole 52

UK 53

The coalition government's impact on the FOP labeling debate in the UK 55

Industry response to FOP labeling debate in the UK 56

The nutrient profiling debate 57

Chapter 3 The impact on consumers, manufacturers and retailers 59

Summary 59

Introduction 60

Consumers 60

Consumer confusion 63

Use of FOP labeling 64

Manufacturers: To label or not label? 66

Manufacturer confusion 68

Manufacturers must create a scheme that works 69

Europe 70

Costly business 71

Retailers 72

Chapter 4 NPD analysis 74

5

Summary 74

Introduction 75

FOP nutritional labeling market in context 75

Definitions 75

Healthy foods or marketing tools? 76

The functional food and drinks market 76

The US functional food and drink market, by claimed health benefit 78

The European functional food and drink market, by claimed health benefit 78

The Asia Pacific functional food and drink market, by claimed health benefit 79

Bone health 80

New product highlights in 2009 80

Heart health 82

New product highlights in 2009 82

Digestive health 83

New product highlights in 2009 84

Energy 85

New product highlights in 2009 86

The diet food and drinks market 86

Category analysis 89

Bakery and cereals 90

Dairy 91

Soft drinks 92

New product highlights in 2009 93

Savory snacks 94

New product highlights in 2009 94

Confectionery 95

Antioxidants 96

New product highlights in 2009 98

The impact of FOP label regulation on innovation 99

Innovation will not be influenced 99

Regulation will have a negative impact on innovation 99

A switch to green claims 100

Product reformulation 101

6

Chapter 5 Conclusions and action points 102

Summary 102

Introduction 103

The advantage will go to the first-movers 105

Grey areas 105

Price should be the biggest consideration by the industry 106

Cost of FOP labeling regulation 108

Other options in FOP nutrition labeling 109

Industry versus regulatory acceptance of major FOP nutrition labeling scheme 109

An outright ban on FOP nutrition labeling 110

Education from childhood through to adulthood 112

Australia 112

Canada 113

Europe 113

US 113

Product information smartphone apps 114

GDAs or traffic lights? 114

Conclusions and action points 117

Regulatory landscape versus consumer awareness of various health claims 117

Consider the price of your product: is it prohibitive or inclusive? 118

The importance of FOP nutrition labeling to attract first-time buyers to your product 118

Get external help if necessary 118

Nutrition labeling's role in corporate social responsibility 119

Consider offering more than one portion size 119

The use of nutrition labeling varies by country and category 119

Be wary of taking the lead at a time when nutrition labeling is a hot topic among regulators 120

Wait for a final decision 120

It is not mandatory to make a health or nutrition claim 121

Consider your options – and your key messages 121

Consider your target audience 121

Make claims and labels consumer-friendly 122

7

Table of figures

Figure 1: Canada's voluntary Health Check FOP labeling scheme 32

Figure 2: EFSA nutrition and health claims approval timeline, 2008–09 42

Figure 3: GDA advertisement in Ireland 50

Figure 4: Sweden's Keyhole system has been adopted by Norway and Denmark 51

Figure 5: Reference points for labels during a product's life 65

Figure 6: Uncle Tobys Healthwise cereal and Amazing Grass 81

Figure 7: Seapoint Farms Edamame and Heartily Healthy Cream - Angel Technology 82

Figure 8: Sales of the major probiotic markets ($), 2003–13 84

Figure 9: Pre-Probiotic Enhancer Beverage and Moody Muesli 85

Figure 10: NuBar Rich Dark Chocolate Candy Bars 86

Figure 11: Top 10 claims in food and drinks and claim share by category in new product

launches (%), 2009 90

Figure 12: Zdrayvery - Yogurt Pitevoy 92

Figure 13: Innovative Beverage Products MaxImmune shot and Comotion 2x 93

Figure 14: Glennys Low fat Soy Crisps 95

Figure 15: Bora Bora's organic vegan bars and Khosian Honeybush tea 98

Figure 16: Industry versus regulatory acceptance of major FOP nutrition labeling schemes 110

Figure 17: Regulatory landscape versus consumer awareness of various health claims in

Europe 117

8

Table of tables

Table 1: Understanding of FOP nutrition labels GDA labels 37

Table 2: Top 10 'fattest' nations in the world 62

Table 3: Priority list for global retail and consumer goods companies in 2010 69

Table 4: Functional food and drink market value in Europe, the US and Asia Pacific, by

country, 2007–12 ($m) 77

Table 5: US functional food and drink market value ($m), by claimed health benefit, 2002–1278

Table 6: European functional food and drink market value ($m), by claimed health benefit,

2002–12 79

Table 7: Asia Pacific functional food and drink market value ($m), by claimed health benefit,

2002–12 80

Table 8: Diet food and drink market, Europe and the US ($m), 2006–10 89

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