Transparency Can Impact the Bottom Line

By Steve Markenson, Director, Research, Food Marketing Institute

FMI, with support from Label Insight, released research this week that shows grocery shoppers exhibit loyalty to those products that create deeper relationships through information exchange. The Transparency Imperative takes a look at product labeling from the consumer perspective and finds that shoppers increasingly demand transparency, so much so that 75 percent are more likely to switch to a brand that provides more in-depth product information, beyond what’s provided on the physical label. When shoppers were asked the same question in 2016 in a similar study by Label Insight, just 39 percent agreed they would switch brands.

Eighty-six percent of shoppers agree that if food manufacturers or retailers provided access to complete and easy to understand definitions for all the ingredients, it results in more trust. Nearly as many shoppers (80 percent) say that they are more likely to be loyal to a brand that provides more in-depth information, beyond what is provided on the physical label. More than half of shoppers (54 percent) say they are even willing to pay more for a product that has additional product information. 

What is Transparency?

The vast majority of consumers (69 percent) say it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made. Interestingly, online shoppers (80 percent), college graduates (76 percent) and higher grocery spenders – $125+/week (75 percent) – are more likely to agree with this sentiment.

When asked to further define what elements define transparency, older generations (Baby Boomers and Generation X) are more likely than Millennials to focus on a complete list of ingredients, ingredients descriptions, and nutritional Information. Millennials also focus on these indicators, but they are more likely than older generations to look at allergen information, certifications and claims, explanations of ingredient usage information, and other details such as animal welfare, fair trade and labor practices.  

Meet the Health-Conscious Shopper

Nearly half (47 percent) of American households have someone on a diet or following a health-related program. These shoppers are even more likely to place a premium on transparency – 61 percent will pay more for products that offer in-depth product information, versus 54 percent of general shoppers. When a label is not sufficient, these shoppers (89 percent) are very likely to seek out information elsewhere. Nearly half of this segment (47 percent) are very likely to use a smartphone in-store to find additional information beyond what’s available on the label and the shelf.

The study also finds that the presence of children in the home increased the desire for transparency. Shoppers with children are more likely to place greater importance on ingredient information, nutrition and health benefits. They are also particularly likely to find value in accessing detailed product information in-store on their smartphone (87 percent) and to use this method (85 percent).

Grocery E-commerce Increases Transparency Expectations

The study finds that 26 percent of shoppers purchased groceries online in the last 30 days. Yet this group represents a valuable demographic – they are more educated, have higher household incomes and more likely to have children under the age of 18. While Millennials are disproportionately shopping online, they only make up 39 percent of online shoppers. Generation X (30 percent) and Baby Boomers (23 percent) also represent a significant portion.

Online grocery shoppers expect more product information (76 percent) when shopping online than if they were in a physical store; and 72 percent believe that getting product information is even more important when shopping online. Additionally, 81 percent are willing to switch to a brand that provides more in-depth product information.

Download The Transparency Imperative