Can You Judge Food by Its Label?

We are what we eat, or so the old adage goes. However, according to Nielsen’s recent Global Health & Wellness Survey*, less than two-thirds (63 percent) of global respondents trust health claims on food packages, and the percentage is even lower in North America (56 percent). Clearly (pun intended), the industry must be more transparent about the contents and source of foods, providing stronger scientific support for health claims.

Regardless, 80 percent of North Americans are slightly to moderately willing to pay a premium for foods with health-related claims or attributes. Health claims on labels do increase sales globally, but only when the product is perceived as a healthful product to begin with. For semi-healthy and indulgence categories, however, manufacturers must be more selective and choose claims that address a related or seemingly relevant product attribute. Dollar sales for potato chips with whole-grain labeling, for example, decreased 11 percent between 2012 and 2014, globally, but those for potato chips with low or reduced sodium increased 18 percent. Consumers think of potato chips as a salty snack, so a low-sodium option may be more appealing than whole grain.

In the United States, high-fructose corn syrup is public enemy No. 1, and 65 percent of consumers said it is very or moderately important to buy products with labels touting its absence. Americans are also willing to pay a premium to avoid it. Genetically modified organisms (GMOs) came in second as the most-avoided attribute, with 61 percent of U.S. consumers saying it was very or moderately important to seek labels touting the absence of GMOs. Again, American consumers are willing to pay a premium for such label claims.

Salt is the big enemy among Canadians, with 68 percent of respondents saying it is very or moderately important to avoid it. And they are willing to pay a premium to do so.

Not all effective label claims need to point toward the absence of a negatively perceived ingredient, however. Sixty-nine percent of U.S. consumers said it is very or moderately important to buy products with labels that say a product is made with fruit or vegetables. Seventy-two percent of Canadians said it is very or moderately important to seek out products with high-fiber claims.

The willingness to pay a premium for health attributes appears to decline with age. For example, 41 percent of global Generation Z respondents and 32 percent of global millennial respondents said they are very willing to pay a premium for ingredients that are sourced sustainably. But only 21 percent of global baby boomers and 16 percent of global Silent Generation respondents said the same thing. Meanwhile, 24 percent of global Generation Z respondents and 26 percent of global millennials said they are very willing to pay a premium for gluten-free products, while only 17 percent of global baby boomer and 14 percent of global Silent Generation respondents said they are willing to do the same.

While age often dictates a need for foods that contain certain health attributes, it is actually the younger consumers who are most willing to back up their sentiments with their wallets. As millennials’ purchasing power increases, manufacturers and retailers that make the effort to understand and connect with this generation’s needs increase their odds for success.

*Methodology: The Nielsen Global Health & Wellness Survey was conducted between Aug. 13 and Sept. 5, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 percent. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or an online population of 10 million for survey inclusion.

“The willingness to pay a premium for health attributes appears to decline with age.”