Natural selection: clean-label and natural ingredients

Unlike other claims that are clearly defined, concepts such as 'natural', 'organic', 'bio', 'health food' and 'clean label' are widely recognised and used on a daily basis, but the average consumer would struggle to identify what they actually are. Indeed, to a large extent, there are no clear definitions yet.

However, they evoke a positive sentiment and probably originate in areas that excite neuro-marketers. An interesting aspect of clean label is that the name is not well known by consumers, yet the concept is intuitively used and accepted by a growing number of people. After an evolution that began roughly ten years ago, the food industry is responding more and more to this clear change in consumer behaviour. The topic was given the name clean label.

In absence of a clear, validated definition, clean label can be used to describe a product with a label that contains few or no ingredients that are perceived to be overtly chemical or industrial, whether that is conservatives or artificial flavours - with or without E numbers.

This trend goes hand-in-hand with consumers longing for the natural appeal of products at a time when proximity to nature and agriculture is decreasing. It is obvious that industry turns to ingredient manufacturers to learn, understand and source clean-label ingredients in order to meet consumers' demands. The nutrition label has received a lot of attention from consumer groups and regulatory bodies, and is obligatory on virtually all global consumer food packaging. It took a while, but in the last couple of years a vast majority of people - over 60% globally according to surveys - really started to read them. They declared that they would be willing to pay more for clean-label products.

Along with emerging consumer awareness of healthy food, a trend that started to take shape in the 1970s, people now do not want unknown ingredients in their food and, by extension, they do not want them on the nutrition label; instead, they want clean labels.

In Europe, E numbers have a very high 'label-polluting' effect, no matter what is behind them. In Asia, major food scandals in the recent past have prompted consumers to begin paying a lot more attention to labels. Globally, any mention of chemical preservatives or additives is almost taboo.

People do not want to be confronted with too many items when reading the label, and the ones that are mentioned should be as close to their natural form as possible and/or easy to understand.

Ingredients that give the impression that they originated in a grandmother's kitchen and have not been processed too harshly are of great appeal to consumers, despite the fact that the same consumer will more frequently chose a frozen pizza over one that they baked themselves. Some people even try to avoid potential allergens, even though they do not have particular allergy problems.

Besides E numbers, in the EU, other products to be banned from the label are genetically modified organism (GMO) ingredients, chemically modified cellulose starches and fats, and also synthetic colours and flavours.

It goes without saying that the specificity (focused on the presence or absence of certain groups of food ingredients or the type of processing methods) and the intensity of clean-label mindedness is culturally diverse. In different regions, and even countries, distinct differences in focus are evident. German consumers want ingredients and no additives, French consumers prefer 'natural' or 'organic' and UK consumers want to see 'no additives' messages. North Americans, on the other hand, focus on the food label, having become less sensitive about claims on the front of the package.

Why is clean label important?

The enormous market pull for clean labels in all global regions shows no sign of abating. A total of 40% of clean-label product launches take place in Europe, followed by North America and Asia, which together account for about 20% of new promotions. These phenomena are also observed in South America and South Africa; it is a global evolution. Since 2003, a clear trend in consumer product launches showing cleaner labels has taken place (see graph).

The ingredients industry has reacted to this phenomenon in two ways. On the one hand, companies try to find clean-label alternatives for their existing products. For this purpose, starches (including functional starches) that have been physically treated without the use of chemicals - and that have similar properties to chemically modified starches - have emerged.

The functional starches can be labelled as starch. They have no E numbers and effectively are not chemically treated, which cleans up nutrition labelling. On the other hand, there are companies that have always been producing clean- label ingredients, but only started marketing them as such since clean label became big business.

Interesting examples are rice starch manufacturers that can replace existing starch functionalities with additional clean-label concepts such as gluten or allergen-free, non GMO, etc. Moreover, rice starch functionality is so diverse that it can contribute to clean label in application areas ranging from baby food and texturising applications to replacing titanium dioxide (TiO2) as a whitening agent in certain confectionery applications.

The pull of the clean-label market makes market segments accessible for these fine, but slightly more expensive, food ingredients. In published market studies (Mellentin) consumers confirmed that they are willing to pay more for clean label products.

Where is clean label applied?

To comment on this topic, a search was performed in the databases of Innova Market Insights. A selection of product launches for the past ten years that displayed terms like 'natural', 'no additives', 'no preservatives' or 'organic' in the claims section of the product description was performed and the results were presented per region and per year.

The research shows that clean labels were virtually non-existent ten years ago. Shortly after the millennium, such labels started to emerge and the number of clean-label product launches has been growing steadily ever since at a rate of more than 4,000 a year across all categories.

In 2012, products at the top of this list include soft drinks, followed by bakery, and sauces and seasonings. Next in line are dairy, ready meals and confectionery.

What are likely future application areas?

The future is not predictable yet. However, when we calculate the ratio of the increase in product launches of the past three years versus the ratio of the increase in product launches in the past ten years, we see that some products are emerging that up until now have had a relatively low profile.

In the past three years, clean-label product launches of snacks, spreads, cereals, and even fruit and vegetable-based products have increased more rapidly than before - and will likely be the ones to watch out for in the years to come.

We also see that the top three in 2012 - soft drinks, bakery, and sauces and seasonings - are still growing at the same pace. Interestingly, food supplements initially enjoyed a strong rise in popularity, but then fell back. Growth over the past ten years has been, at best, stagnant.

Conclusion

Clean label is considered to be a strong market force. The top three actual applications are soft drinks, bakery, and sauces and seasonings, while rising stars are snacks, spreads and cereals.

Along the value chain, from ingredients to food producers, the ingredients and retail industries have reacted by developing and seeking solutions or alternatives in order to offer clean-label formulations to the consumer. The increasing demand for convenience and on-the-go food - which has taken place in parallel - represents a significant challenge.

With large consumer groups interested and informed about how food is made and provided, there is a significant window of opportunity to educate consumers still further about the different roles ingredients can play in today's food, whether it originates in the field and on the supermarket shelf.