BrandWatch by Michel Gutsatz

Nutrition: "Smart Choices" or Loss of Trust

Announced since 2008, a new nutritional sign was officially launched last August 4: "Smart Choices" is the result of a collective programme, a coming together of the most important food groups in the U.S. NGOs, scientists and professional organizations support it. 500 products from ConAgra Foods, General Mills, Kellogg Co., Kraft Foods, PepsiCo, Sun-Maid, Tyson and Unilever, sport the green "check mark". It was expected that in May 2010 more than 1 200 products would be referenced within the "Smart Choices" programme: in order to conform, a product should not exceed certain levels of "total fat, saturated fat, trans fat, cholesterol, and added sugars and sodium" and must provide the consumer with nutrients with positive nutritional benefits such as "calcium, potassium, fibres, magnesium, vitamin A, vitamin C and vitamin E".

On October 29, less than three months later, most of the companies announced they would suspend their participation in "Smart Choices" and “phase out” products sporting the checkmark. How did this happen?

Since its launch, "Smart Choices" has been the subject of much criticism: all argued that the criteria of the programme were too lenient and that products having nutritional qualities, uncertain at best, carried the label (such as Kellog's "Froot Loops" or Kraft's "Macaroni & Cheese"). The outcry was so great, ("These are horrible choices", said the chairman of the Department of Nutrition, Harvard School of Public Health) that on 19th August the Food and Drug Administration and the Department of Agriculture wrote to the heads of "Smart Choices" that it would be alarming if the sign "had the effect of encouraging consumers to choose highly processed foods and refined grains instead of fruit, vegetables and whole grains". The Attorney General of Connecticut stopped it in its tracks by launching an investigation to determine whether "Smart Choices" did not breach the nutritional laws and regulations of his State. On 20th October the FDA announced it was starting a general audit of all the on-pack nutrition labelling programmes, making the subject one of its priorities. From the 26th, one brand after the other suspended its participation.

This case of "nutriwashing" is unprecedented. It has two major consequences:

1. It exacerbates the loss of trust that we have observed for several years with regard to brands as well as all sources of authority: how can one believe that these companies did not try a form of "laundering" of their products with "dubious" nutritional virtues? Could one even imagine that the scientists, professional organizations and NGOs who participated in this project will come out of it unscathed?
2. This is another example where consumers and their representatives take control: scientists, consumer groups, nutritionists and consumers on the Internet have participated in the "Smart Choices" protest movement.

I can only caution the brands: a new consumer ethic is taking shape, where the core values are respect and transparency. It is essential that brands and retailers become aware of it and make it the focal point of their actions.

Selling Water at 4 € the Litre...

Bottled spring water, Crystalline, is sold at € 0.16 per litre (large size) and bottles of 50cl at 0.50 € per litre. Montcalm, a spring water often found in health food shops, is sold at € 0.60 per litre. Mineral waters are sold between € 0.25 (a private label) and 0.66 € per litre (Hepar). 
But what can justify selling mineral water at € 4 per litre, or 8 times the market price? An "environmental" argument, and fashion trends, of course.
There is currently, at Monop' and at Chez Colette, in the Grande Epicerie du Bon Marché – and therefore in all stores in vogue in Paris - a new brand of mineral water: Aquapax.
It claims to be a "revolution": the use of Tetrapack (75% recyclable). The packaging expresses its respect of the planet in many ways: "Planet conscious natural mineral water" / "Recyclable" / "Sustainable" / "A pure thirst for the environment".... This water was launched by a company (Drinkyz), specialists in made-to-measure private label beverages: it is presented as a real breakaway from market codes (where plastic dominates), and as the first mineral water respectful of the environment. The cardboard is reusable.
Environment protection suffers from this kind of product: unaffordable products - reinforcing the idea that to be healthy and protect the environment you had better be wealthy - and products that are based solely on marketing - all of which proves that it is nothing else but a (commercial?) "coup" and not the creation of an authentic brand. 

Distributors Take Over – The Case of Nutrition

On 26 June 2008, I drew your attention to the "Guiding Stars" programme by Hannaford Brothers, which was the first case where a distributor - in the name of the responsibility it has towards its consumers - displayed the nutritional quality of all products available in the store (including national brands). I concluded my post by saying, "The distribution plays a role here: provide information and transparency on ALL products to a consumer in search of clues. It is the consumer who will win in this debate on nutrition". This initiative has been followed by other retailers:

• United Supermarkets (and Market Street) in January launched its "Tag Labelling" system (created by its own dieticians) that, by means of shelf placards, show the presence of products that are Organic (O), have low sugar content (S), are gluten-free (GF), low fat (L), good for the heart (HH) or good in case of a diabetic diet (DM).
  
  
  
  
• Supervalu (followed by Albertson's and the 1300 stores of the 3rd largest U.S. network) has initiated a new system of nutrition information, "Nutrition IQ", developed with the help of Joslin Clinic, a university medical centre affiliated with Harvard Medical School. To qualify for the iQ label, the product must have reduced levels of salt, sugars and saturated fats. Only around 14% of the 30,000 products already evaluated carry the label:  their essential nutritional benefits will be indicated on the price label. "Excellent or good source of fibre" is denoted by orange tags, "excellent or good source of calcium" by blue tags, "excellent or good source of protein" by yellow tags, "low or healthier level of sodium" by dark-green tags, "low-calorie" by a purple tag, "low saturated fat" by a red tag and "whole grains" by a dark-orange tag. " However some categories remain on the sidelines of this nutritional assessment ...
  
  

The movement is therefore irreversible: all U.S. distributors, taking advantage of the national debate on obesity and the nutritional qualities of products, create evaluation grids and apply them to most of the products they have on the shelves. Here is a great way of putting pressure on national brands ... When will such a system be implemented in Europe?

Eataly: Good Quality Food for Everyone

Eataly, the "food supermarket of the future" opened in January 2007 in Turin: an old Carpano vermouth factory was restored to house an extraordinary showcase of Italian culinary expertise and food. The area is organized into 3 sections:

• Comprare (Buy): A market of 2 500 m2 selling quality food – most of them from local or artisanal producers;
• Mangiare (Eat): 8 restaurants (fish / meat & cheese / wine bar / products from Savoie, etc.), two cafes and a shop selling ice cream;
• Imparare (Learn): the Carpano museum, a library & 10 learning areas - food preserving / wine / beer / Piedmont products / seasonal products; and a large number of paid services - cooking classes with renowned chefs (80 to 100 €) / aperitifs with winemakers (20 €) / basic cooking classes (70 €) / vertical wine tasting (40 €), etc.

This amazing concept is conceived around four key points:

• A supply of quality products manufactured by small Italian firms;
• Prices positioned significantly below those of the "organic" supermarkets – thus permitting an offer at an "accessible" price;
• The "slow food" philosophy is put into action;
• Taking into account the needs of consumers to reclaim cooking.

We are at the core of several "heavy" trends with regard to the modern consumer: the quest for quality / a desire for good health / authenticity / the need to reclaim things (cooking, production proximity, etc.) / the desire to learn / seeking the right price.
As this concept is also rooted in a strong national identity - Italy, a country where one "eats well" and "drinks well" - it can only be exported with success! Keep your eyes open ...

The New Trends in Food Retail in the U.S.

In my note of 15 February last I referred to the new American food trends - which increasingly resemble the European lifestyle. The same Hartman report, "Contemporary Food Trends", describe the trends they have identified in the retail food industry. Distributor brands would do well to pay great attention to them.

Three basic trends have emerged:

• The search for locally-manufactured products, "all things local": the "locavore" movement illustrates this (why are Americans able to so "twist" their language to better express a new reality?)
• A new interest in fresh products.
• A redefinition of quality in food products - beyond the strictly nutritional information - justified by the desire for "healthy food".

In the field, this results in:

• The emergence of numerous mini bakeries;
• An increase in cheese sales (Kroger has signed an agreement to distribute cheeses from Murray's);
• Significant growth in dairy products (cream, butter, yogurt, etc.);
• The setting up of "grocer grown" sections where consumers are able to buy fresh produce from designated farms (some of which belong to the store – such as Wegman's Organic Research Farm);
• The increase in the number of private labels and, in particular, "premium" private labels (only 9% of U.S. consumers believe that national brand products are better than private label products - and 60% believe that all these products are manufactured in the same factories);
• The emergence of new distribution structures, smaller, offering more fresh products (Walmart's Marketside vs. Tesco's Fresh & Easy). However, these new structures will succeed only if they are not just a smaller version of existing supermarkets: they should offer a novel experience to the consumer (as Trader Joe, The Fresh Market and Bristol Farms already do); 
• The search for modern forms of home delivery (reinvention of milk delivery / development of Comunity Supported Agriculture delivering country-fresh hampers - the French AMAP). Do you know that there is now a "Fresh" section on Amazon?

The report states that the economic crisis does not upset these basic trends (like the search for premium plus products and better quality): it will temporarily delay or affect them, but it will not hold them up to question.

Kellogg's: From Product Innovation to the Banning of an Advertisement

In 1997, Kellogg's, interested in the breakfast habits of the English consumer, found that more and more young consumers under the age of 35 skipped this meal at home. In fact, lacking time, they purchased a snack on the way to work.  How could this fact be turned into a business opportunity when the brand had no foothold at all in the snack market sector? 

The response was called "Nutri-Grain": a granola bar marketed as a substitute for breakfast, with a slogan, "Good Food on the Go".  Kellogg's thus offered a transportable product with an attribute that, at that point in time, was not yet labelled "nutritional". 

In fact, this product could not have been positioned exclusively in the "health" segment - very marginal at the time - that would have discouraged the mainstream consumer. The success was swift and the range extended with several new references.

However, the "health" aspect gradually amplified, select advertisements highlighted this feature. In 2005, "the substitute for breakfast" angle was abandoned - to be replaced by a mix "tasty and good for health".  The trend that called for emphasizing a "nutritionally correct" message had left its traces.  The marketing team, seizing the new trend and relying on the "health" argument, until then only a secondary concern of the brand, decided to reposition it.  "Nutri-Grain" had lost its roots and forgotten that the consumer trend from which it emerged still existed.

In 2008, following a logic that called for an extension of its range, Kellogg's decided to launch a cookie, Nutri-Grain Soft Oatie.

Nutrition: The Battle of the Labels

The battle of the "nutritionally correct" labels is raging in the USA. I referred to the "Guiding Stars" initiative of Hannaford Brothers in my post of 26^th June: a distributor equips itself with a nutritional analysis grill of all the products sold on its shelves, finds that only 23% of the products are worthy of a "star" rating, notes that sales of these "star" products take flight and ... offers its system under license. National brands in this case are directly "judged" by the distributors.

They have now responded. On 28^th October last, a number of brands ... and a distributor (Coca Cola / General Mills / Kellogg / Kraft Foods / PepsiCo / Unilever / Walmart) announced that they were jointly launching the "Smart Choices Program", a new "scientific" label.  In order to qualify for the label, certain limits not to be crossed (in saturated fatty acids, added sugar, salt, etc.) would be determined for each of the 18 product categories identified (desserts, snacks, cereals, beverages, food, etc.).  The products should also, more often than not, include nutrients that nutritionists have recommended as being good for health (vitamins, fiber, calcium, magnesium, etc.). All these will be indicated by a label placed on the front of the packaging. The products so labeled will be available in 2009.

I suggest drawing a parallel with what is taking place in the beauty sector - in the segment of organic products, which, in my view, are the counterpart of the "nutritionally correct" in food. Three players compete in the labeling market:

•  The distributors: Whole Foods has launched a Premium Body Care Label applicable to all products available on its shelves.

•  The brands: a label called "Oasis" which groups L'Oreal, Aveda (The Estée Lauder Companies) and a multitude of minor brands AND the new "Natrue" brand, grouping Dr.Hauschka, Weleda, Logona, Lavera, etc.

• The organizations delivering certifications: Ecocert, Cosmebio, The Soil Association, BDIH, etc.

Although each actor announces that its objective is to afford better visibility regarding offers proposed to the consumer, I see other reasons for this proliferation:

•  Firstly, it is a real market for the certifying bodies (obtaining a label can cost a brand several thousand Euros), as well as for brands: the financial stakes, direct and indirect, are considerable.
•  Then there is also a real battle for the right to set the standards: who will hold it tomorrow? The brands themselves, at risk of being accused of being both judge and party? The distributors, finally reverting to the source of their profession as selectors? The "independent" agencies - but not necessarily non-profit?

A wager that this battle of the labels has only just begun ... 

When distributors move out of their stores

Last June the 26^th, I drew your attention to the "Guiding Stars" of the Hannaford supermarket chain in the U.S.: having established a nutritional assessment grid with a group of scientists from 6 universities (Harvard, Tufts, California-Davis, Southern Maine, Dartmouth School of Medicine, North Carolina), Hannaford awarded "star-points" to all the food products sold in its stores. Only 23% of them were entitled to one star or more! They saw their sales of starred products increase 3 to 4 times faster than products that had no stars.

 Since then, the "Guiding Stars" system has been extended to all Delhaize subsidiaries in the U.S. (165 Hannaford, 1177 Food Lion and 108 Sweetbay Supermarket) – that is, to the entire eastern region of the country.

Guiding Stars Licensing C° has just been created to sell this system outside these market brands. Indeed, they have just announced that they would market it outside of food brands: their potential customers will be found amongst national brands, restaurants, schools, hospitals and convenience stores.

So here is a distributor with the ambition to make its nutritional evaluation system a national benchmark: no matter how much time it will take to achieve it, Hannaford and the Delhaize group have just proven that they are reinventing their profession of selectors and that, taking into account the expectations in matters of public health, they intend to become THE reference in the matter. Bravo!

 

 

Understanding the differences between French and American attitudes towards food

Nestlé France has decided to create a Foundation for Nutrition: its task will be to better understand eating habits and their effects on health, in order to help the French to eat in a well-balanced manner (Les Echos, 9^th September 2008).

 

A book was published at the beginning of the year which opens up avenues for reflection on the topic: "Manger / Français, Européens et Américains face à l'alimentation" ("Eating / French, Europeans and Americans in the Face of Food") - Fischler & E. C. Masson (ed. Odile Jacob)", and gives us the pertinent results of a comparative survey on attitudes towards food, the body and health.

This study illustrates that there are two contradictory approaches towards food:

 

The French attitude: The French partake of "cuisine". A meal is an important time for socializing, commensality and conviviality. It thus delineates the circle of intimates and builds and structures relationships between the participants. Each person seeks a moment of warm sociability, of communication, of sharing, of pleasure. Pleasure here explicitly asserted as being a fundamental dimension of "eating well": it lies in the taste of the food, it is a part of a balanced diet, it is a lifestyle. The quality of products is taken seriously. For this, two criteria are taken into account: "natural" or "traditional" products, and the region where they originate, which are a guarantee for finding "good" products.

 

The American attitude: Americans eat food or foodstuffs. The word "food" signifies three things: It means nutrition, it is a personal choice and it represents individual liberty. Everyone is free to evaluate and decide on the question, based on a scientific-medical rationale: the consumers should therefore have, other than the widest choice of products possible, the most comprehensive information on products and their composition. The consumer therefore is considered as autonomous in his choice of food. He sees himself as the engineer of his body and its alimentation: in this context, what is important is to choose the right nutrients to keep healthy.

The hidden link between Obesity and Purchasing Power

Numerous studies have highlighted the link between the intake of refined flours, carbohydrates, soft drinks, greasy snack items and cardiovascular risk and obesity. Based on this, many countries are advocating the eating of fruits and vegetables to fight against these scourges in order to stay healthy.

However, no one seems to ask how much it costs to follow these recommendations.