New research shows clean label food formulations can increase profits
DuPont Clean label hub news release
A study conducted with global product developers across large and mid-sized food companies has found that 40% of global manufacturers reported taking price increases and 58% reported an increase in overall revenue after converting to and making clean label claims.
Ingredion EMEA said the findings of this first-ever research highlights the profit potential of clean label formulations.
“The new research shows that clean labels can generate increased revenue in addition to creating substantial consumer value,” said Daniel Haley, global platform leader for Clean & Simple Ingredients at Ingredion.
“Our proprietary Atlas data shows what percentage consumers are willing to pay extra for clean label formulas at the country and product levels. Now we have an understanding into what food formulators need from us to grow their business and power profits.”
More than half of the respondents shared that offering clean label foods or beverages is a priority within their company’s overall business strategy. Globally, all four regions reported at least half of their portfolios have already converted to clean label formulations and have plans to increase their clean label efforts in the next two to three years.
Europe reported greater than 50% conversion across their product portfolios, while projecting further growth in the next two to three years, with an additional 17% if their product portfolios projected to convert to clean labels. The finding also revealed that partnerships between R&D, procurement and marketing proved to be a key factor to successful conversions to clean label.
Respondents noted three key barriers to clean label development, including:
- Cost: One-third (34%) of manufacturers globally say the cost of clean label ingredients is a barrier for reformulation.
- Shelf life: All product categories and all markets noted reduced shelf life as a challenge to clean label formulation.
- Lack of formulation expertise: Nearly three in 10 companies experienced difficulty formulating with clean label ingredients due to inexperience with specialised ingredients.
Surveyed companies said they are planning clean label formulations in all food categories; highest priorities are in the beverages and bakery categories. In Europe in particular, the nutritional and meal replacement beverage category is projected to grow by 13%.
Ingredion, which kickstarted the clean label movement 25 years ago with the introduction of Novation and has a broad portfolio of clean label ingredients, conducted this latest global clean label study in August 2021. Insights from the study, along with Ingredion’s Atlas consumer research, last updated in 2020, on ingredient acceptability and awareness, can be found on the company’s website.