Consuming issues: UK reaches tipping-point on FOP labels
Sharwood's owner Premier Foods said labels were "best opportunity to move towards one consistent approach in the UK"
The debate over what form front-of-pack nutrition labels should take in the UK has taken a significant stride to being closed, with over 60% of the market agreeing to use a new label that does include traffic lights. Not every household name will use the label but Ben Cooper argues the refuseniks will now be firmly in the campaigners' firing line.
The frustrating thing about traffic lights is they can take an eternity to change. Much the same might be said about UK food companies, at least with regard to front-of-pack nutritional labelling.
Yesterday's launch by the Department of Health of a uniform front-of-pack (FOP) labelling system marks a critical moment in the long-running debate in the UK, centred on the relative merits of colour-coding (traffic lights) and categorising foods by percentage of guideline daily amounts (GDAs) of key nutrients.
The voluntary system takes the "hybrid" approach combining colours and "reference intakes" (previously known as GDAs), which the UK's major food retailers have already adopted.
It's a major milestone in the saga but with this story one hesitates to say the denouement. Yesterday saw major players - previously wedded to the GDA-only approach most manufacturers and, until last year, Tesco have resolutely championed - change tack.
Among the converts are Mars Inc, PepsiCo and Nestle, but big names still holding out include Coca-Cola, Kellogg, Mondelez International, and somewhat surprisingly Unilever. CEO Paul Polman must have a heavy heart when seeing his company cast as a laggard in such a prominent area of corporate social responsibility. By the same token, people may well ask how Coca-Cola's decision sits with its recent PR offensive on the obesity issue.
In addition, all the UK's major dairy companies have declined to join and prominent frozen food brands, such as Birds Eye and Findus, are also absent.
Some of these chose to tough yesterday out and make no comment. Others, Mondelez and Kellogg among them, said they would review the details of the scheme. Given that this debate has been rumbling on for the best part of a decade, the idea that a company needs more time is bemusing to say the least.
While many companies have a significant number of products which would be subject to a red label and could take a hit in sales as a result, there is clearly a divergence of view about whether or not to "bite the bullet".
The question appears to be particularly vexing for certain sectors, such as dairy and cereals. Many cereals would be subject to a red light because of added sugar but virtually all cereals, regardless of their sugar content, are marketed on some form of healthful proposition, such as vitamin content or just fairly vague messaging about the importance of giving kids a good start in the morning, and they do not want their products stigmatised with a red label. Not only has Kellogg decided not to join the scheme but it is interesting to note that Nestle has come on board for its beverages and sweets but its cereals joint venture with General Mills, Cereal Partners UK, will not be using the label.
Notwithstanding Mondelez's decision, in a way there is less of a dilemma for confectionery companies - there would be few consumers who would expect sweets and chocolate not to have a red mark - than for producers of foods which consumers may have less understanding about. Many frozen and ready meals that may not currently cause any concern to consumers will be given the red label. If a company perceives this will cause a dramatic jolt to sales it may hold out, particularly given the current market conditions.
Those may be reasons why companies have held out but are they adequate ones? Campaigners would argue that of course products with a red light will take a hit in sales. That is the point. While there is nothing wrong with eating such products on occasion, regular consumption of products high in fat, sugar and salt needs to be discouraged. And companies should be encouraged to reduce the levels of the nutrients of concern.
Also, over the years many companies that have backed the GDA-only approach have also emphasised the importance of uniformity and consistency for consumers. For some time, with virtually all manufacturers and Tesco backing GDAs, they could claim that system had the advantage of consistency. Now that an unquestionable majority of the market will be using one single hybrid scheme, that in itself becomes a critical, determining factor, possibly outweighing some specific reservations companies may have about colour-coding.
Moreover, companies may be over-estimating the impact on consumer perceptions. With 64% of food being sold falling within the scheme, labels bearing traffic light colours will become the norm. Consumers will become accustomed to seeing traffic light symbols, including red ones, and manufacturers may actually have to worry less about products being villainised.
Some companies may also need more time on reformulation work that would affect the label they will place on key products. Campaigners and the Department of Health are certainly hoping the new scheme will be a catalyst for further reformulation. If a product is close to a threshold between red and amber there is now an added incentive to go a little further on reformulation, though that to a degree speaks to the criticism that traffic lights are something of a blunt instrument.
Some may have decided not to move immediately in order to assess the negative reputational impact of not signing up. However, they should be aware that, now they are in the minority, the spotlight - and campaigner pressure - will be centred on them and the pressure will be of a different magnitude than before.
Speaking to just-food, Charlie Powell, coordinator of the Children's Food Campaign (CFC), said his organisation and other campaigners "will be engaging their support base to increase the pressure on these companies because it is just not acceptable that they are refusing to be part of it". The CFC has already created a "Wall of Shame" website to highlight the companies that have not signed up.
Even the all-powerful Tesco eventually found that sort of pressure intolerable when it was the principal focus of campaigner criticism on this issue. Yesterday, Nestle, the world's largest food producer and a company with huge experience of deflecting critical campaigning, took the decision not to resist any further on this issue. If Nestle thinks things are going to get too hot, others should take note.
So, while this saga has not quite reached its conclusion, with companies using the new label now accounting for 64% of the market we have very probably reached a tipping-point.
It is somewhat ironic that a change which NGOs have so long campaigned for has come about under a government criticised for being too cosy with big business. Indeed, signing up to the new scheme will be a new pledge in the government's Responsibility Deal, much maligned by pressure groups and campaigners as being a weak and ineffectual means of engineering change.
It must be said the announcement yesterday was the culmination of a process begun under the previous government and owes much to the ceaseless and unremitting efforts from campaigners, so this government would have a somewhat tenuous claim to its authorship. It has also arguably helped the government that a mandatory scheme would not have been permitted under EU regulation so that was off the agenda. But those who advocate a soft regulatory touch by government may nevertheless feel vindicated by the outcome on this issue.
Sectors: Advertising & labelling
- Nestle on China, candy, nutrition - analysis
- England child obesity plan should cheer industry
- Hain accounting issue rounds off problem year
- What lies ahead for Tyrrells and Amplify?
- Future trends in natural food to go mainstream
- Lotus Bakeries enjoys growth organically, via M&A
- Nestle strengthens margins but net profit down
- Unite outlines 2 Sisters stance on UK pizza site
- Pinnacle Foods closes Evol plant
- Smucker cuts forecast as sales decline