As natural product marketers try to pinpoint consumers’ clean-label priorities, a new report released by ingredients supplier Kerry (Beloit, WI) at this year’s Natural Products Expo West trade show sheds light on which types of customers are likely to purchase clean-label products and what types of product attributes drive their purchases.
The company surveyed more than 700 U.S. customers in 2017 for the report. First, the company found that the customers surveyed could be segmented into what the company identified as five general categories:
- “Label seekers,” identified as young, affluent, educated Millennials well informed about food and beverage trends and making well-thought-out decisions about which products to purchase. These customers expect to have clean-label options and also view such purchases as a reflection of their social status. They are likely to pay more for clean-label products and seek claims and certifications such as organic, non-GMO, and natural, as well as transparency around country of origin and manufacturing.
- “Lifestyle shoppers,” who are older Millennials or young Gen X parents whose food and beverage choices are influenced by where they shop—natural and specialty stores—and who tend to put a lot of trust in the brands they purchase. These customers are less likely to follow trends but still place importance on organic, non-GMO, and “free from artificial ingredients.” Rather than certifications, these customers rely more heavily on the brand and the product’s country of origin to determine product quality and are somewhat willing to pay more for clean-label products.
- “Wellness watchers,” the segment of consumers most concerned about their health and weight and who scrutinize ingredient labels carefully when making purchasing decisions. For these customers, “the nutritional panel and ingredient statement are the most important,” the report states.
- “Casual investigators”—likely a large portion of the mass market—are customers who aren’t necessarily aware of precise clean-label definitions but who are still beginning to more thoughtfully purchase foods and beverages and to read nutrition labels. While fewer of them are willing to spend more for clean label, “empowering them with information, a simple ingredient statement, and added nutritional benefits” are good ways to motivate these customers to purchase clean-label products.
- “Thrifty traditionalists,” customers who aren’t largely concerned about clean-label attributes and will only make changes to their food choices due to medical necessity. “Products that are specifically formulated to solve their current health concerns (high blood pressure, heart disease, arthritis, osteoporosis) will resonate highly with this consumer segment,” the report says.
Soumya Nair, director of marketing insights, Kerry, told Nutritional Outlook that clean-label claims are likely to resonate loudest among the first two groups, the “label seekers” and “lifestyle shoppers.” But, she pointed out, the next two groups, the “casual investigators” and “wellness watchers,” are also key candidates for clean-label marketing and present companies with new sales opportunities. She added that the “casual investigators” are a large component of the mass market and represent up to 29% of total clean-label consumers. These customers likely “have critical mass,” but will require more information and education on what clean label is.
Pinpointing Clean-Label Need States
This consumer research can help guide food and beverage marketers better discern what clean-label customers want, especially during a time in the industry when “clean label” can mean everything from organic and natural to free from artificial ingredient and GMOs, low sugar, added functional ingredients, and sustainability.
“The five consumer segments are the first view for the industry to look beyond age groups and generations, into the American psyche and how ‘clean label’ influences purchase,” said Nair. “Our proprietary view dives deeper into specific ingredients, claims, and nuances that affect each of the consumer groups uniquely.”
In addition to describing the purchasing motivators of these clean-label customer groups, the report drilled down to determine what types of ingredients and product attributes are likely to motivate each group to purchase. For instance, “label seekers” (young Millennials) are seeking ingredients like protein and vitamins. “Lifestyle shoppers,” or older Millennials or young Gen X, are drawn to claims around lower sugar or no-added sugar, high protein, low calories, and added vitamins. Meanwhile, “casual investigators” are looking to reduce their intake of sugar, calories, sodium, and fat, with “wellness watchers” also looking to eliminate many of these same ingredients. Kerry says it can also make available to its customers upon request a list of each consumer category’s “unacceptable” ingredients.
Kerry’s hope is that this research will help companies better develop products that will connect with clean-label customers. According to Kerry, brands should first identify the consumer segments most relevant to their brand and then cater to those segments through ingredient and formulating choices. For instance, “the ‘label seeker’ embodies the Millennial generation seeking products that are ingredient-safe, nutritionally superior, and sustainable. On the other end of the spectrum, a clean-label solution for the ‘thrifty traditionalist’ should focus primarily on the reduction or elimination of negative ingredients,” the report advises. “Understanding these diverse consumer segments to develop targeted clean-label solutions will help brands differentiate in a crowded marketplace.”
Most importantly, Kerry says, this report highlights that there is no “one-size-fits-all” when marketing to these clean-label groups. “The food and beverage industry needs are more granular view of consumer demands and priorities,” the company said.
“Consumers are at differing levels of clean label adoption, from the forward-looking label seekers who are quick to adopt new claims, the cautious investigators who seek to learn more before jumping on the wagon, to those that are indifferent to clean label,” Nair said. “Each segment has differing nutritional and functional priorities that drive their purchase behavior.”
Clean Label Is a Balancing Act
Kerry and Nair also point out that companies can “clean” their labels in several ways. First, of course, is by removing ingredients consumers deem negative.
“It is a challenging time as the industry begins to respond to consumer expectations of ‘clean label,’” Nair said. “With ingredients being top of mind and front and center of the product formulation, reformulations will play a big part. Removing obvious red-flag ingredients (such as high-fructose corn syrup, monosodium glutamate, hydrogenated fats), and then reducing the perceivably unacceptable ingredients will help differentiate manufacturers into clean, cleaner, and cleanest brands.”
Nair also reminded formulators that clean-label formulating “is no longer only about removing unacceptable ingredients,” but also about adding nutritional benefits as well as sustainability. She added that “consumers trade off product features for clean label with either higher nutrition, cleaner ingredients, and sustainability triggers.” Here, she said, ingredient suppliers like Kerry with consumer insights and formulating expertise can also help formulators make the right ingredient choices for the target customer.
“This transformation to ‘clean label’ is a step-wise process, with many formulators starting their journey one ingredient at a time,” she added. “As consumers begin to widely accept organic, GMO-free, low sugar, and other indicators of better food, there will be increasing consensus on what good food should be. Simple labels that mimic a recipe and have recognizable ingredients are what consumers seek today. As they begin to gain more awareness and education on ingredients and nutrition, ‘clean label’ will come to encompass a broader definition—with no artificial ingredients, organic, GMO-free, sustainably sourced, minimally processed, made with real ingredients, and many more. Ensuring that the right balance of ingredients considering their nutritional impact will be a treasure trough of product successes.”