Transparency continues to drive consumer goods’ growth
In an age of unparalleled access to information, consumers have the ability and freedom to seek out products and services that meet very specific needs and desires. And when it comes to food in the fast-moving consumer goods (FMCG) space, those needs are rooted in product transparency.
In an age of unparalleled access to information, consumers have the ability and freedom to seek out products and services that meet very specific needs and desires. And when it comes to food in the fast-moving consumer goods (FMCG) space, those needs are rooted in product transparency. According to Nielsen, consumers are seeking transparency around three key product attributes: sustainability, processing claims (e.g., organic, natural), and ingredients. Interest in each of these three areas varies, but sales among products that focus on each of them are on the rise.
Across the United States, household interest in sustainable products is on the rise. According to data from Nielsen and Nielsen Product Insider, 64% of U.S. households buy sustainable products, which is up 4 percentage points from a year ago. In the retail space, the highest sales growth is coming from products that tout sustainable farming and social responsibility, at 14% and 8%, respectively. Products touting sustainable resource management are seeing sales growth of 6% and sales of sustainable seafood are up 3%.
According to Nielsen’s 2017 global survey on sustainability, 67% of consumers want to know everything that goes into the food they buy. Drilling down further, 46% of Americans say that claims on food products have a direct influence on their purchase decisions. “Organic,” “natural,” and “free from” are a few key marketing claims that continue to fuel sales growth. And with health and wellness driving notable FMCG sales growth in recent years, it’s no surprise that organic sales have seen double-digit growth for the past five years.
But claims aren’t the only elements that consumers are reviewing on product packaging. Walk through any store and you’ll see it: the flip. That’s what happens when consumers come across products that are unfamiliar to them but are interested in possibly buying them: they turn the package over and read the ingredients. One of the key reasons is that Americans don’t necessarily believe marketing claims, and the claims that Americans believe are those that have no regulation to back them, such as “natural.” According to Nielsen’s 2017 global sustainability survey, only 15% of Americans trust “all natural” marketing claims. Comparatively, 18% never trust these claims, while 67% say they sometimes trust them.
Consumers are also looking to see what’s not in certain products rather than what ingredients are in them. The shift toward clean-label products, or those that don’t include certain undesirable ingredients, can be seen across store aisles. Twenty-five percent of U.S. dairy products fall into this realm, and 1.1% share shifted toward clean label dairy between 2015 and 2017. While the increase seems small, it equates to almost $1 billion in sales.