Private brands could profit from the new nutrition labels rolling out
The Front-of-Pack Nutrition Labeling Initiative underway could be particularly beneficial to private brands, retailers told SN.
“Front-of-package labeling has the potential to increase attention to and sales of private-label products for health and nutrition-minded consumers,” said Barbara Ruhs, corporate dietitian for Bashas', Chandler, Ariz.
That's because private-label products currently compete primarily on price, Ruhs said. Uniform nutrition labels can prompt brand-loyal customers to consider private brands.
While there will be costs involved in changing packaging to meet the new standards, the labels will create new marketing opportunities for store brands, noted Chris Hardin, director of corporate brands and category management, Brookshire Grocery Co., Tyler, Texas.
“It will help us be seen more in line with national brands in terms of having the same nutrition, while costing less,” Hardin said.
The new Nutrition Keys labels will start rolling out within the next few months. Designed by Food Marketing Institute in concert with the Grocery Manufacturers Association, the label will feature icons that highlight nutrients that should be encouraged or limited.
The labels will highlight four nutrients to limit (calories, saturated fat, sodium and sugars) and eight nutrients to encourage (potassium, fiber, vitamin A, vitamin C, vitamin D, calcium, iron and protein). In order to carry an icon to encourage, an item must contain at least 10% of the daily value per serving.
The GMA and FMI boards of directors adopted a joint resolution in support of the Nutrition Keys initiative. That means the majority of food and beverages will carry the new labels.
FMI and GMA created the labels with input from a retailer task force. Hy-Vee was among the participants.
At Hy-Vee, the labels will be used in addition to the NuVal nutritional rating system currently in use at all stores, according to Ric Jurgens, Hy-Vee's chief executive officer and FMI's board chairman.
“The Nutrition Keys will help people ascertain why one product may have a higher NuVal score than another,” Jurgens said last week during a press conference about the new labels.
Input from Hy-Vee and other retailers was valuable when considering how the labels will impact private brands, according to Jennifer Hatcher, FMI's senior vice president of government relations.
“Retailers have been helpful in this process because there are some different considerations when it comes to private label,” Hatcher said.
One such concern is how retailers can incorporate the labels on the different types of packaging they use for their store brands. Take pasta. While many of the national brands are boxed, certain store brands come in a less-expensive film packaging.
“We want to make sure that the colors we use will work on their packaging,” Hatcher said.
Research has shown that consumers want the labels, according to FMI. About seven in 10 shoppers compare nutrition between name brands and private labels, according to a SymphonyIRI Group survey conducted for FMI.
“People like to be able to comparison shop, particularly when they're making a decision about a private brand,” said Hatcher.
Retailers SN polled are confident that the new labels will work for their packaging.
Front-of-pack nutrition icons can quickly show whether brands are similar in nutrient content, said Sylvia Emberger, corporate nutritionist for Ahold USA.
“We have a great opportunity to help customers continue to enjoy our corporate brands and understand their nutritional value as well,” said Emberger.
The FMI/GMA effort comes at a time when Wal-Mart Stores just announced its own labeling initiative. As part of a five-point initiative to make the food it sells healthier, the retailer is rolling out a front-of-package seal on its Great Value private brand that will help consumers identify healthier food options. The Wal-Mart seal, which also will be offered to qualifying national brands, will be used in addition to the FMI/GMA's “Nutrition Keys” icons.
Some, however, are skeptical about the effectiveness of front-of-pack labels. Barry Sears, a biochemist and creator of “The Zone” diet, doubts shoppers will read the new labels, describing them as nothing more than a “CliffsNotes version” of the Nutrition Facts panel.
“The outcome will be just like labels on the back of products, which are easy to read, but not read,” he said.
But FMI and GMA are confident the new labels will help consumers at the point of purchase.
“Nutrition Keys will provide essential nutrition information at a glance,” said Leslie Sarasin, FMI president and CEO.