To label or not to label, that is the question. With lifestyle related illnesses on the rise and placing an increasingly heavy burden on our healthcare system, the Government is seeking to pinpoint the root cause of the problem and address it. This has left many concerned that consumer goods companies will be caught in the crosshairs, leading to a raft of draconian legislation, from restrictions on advertising to a fat tax on certain products.
If companies don’t make concerted steps to help the Government educate consumers about the nutritional value of their products then the above is a possibility. The new voluntary labelling system being introduced is a real opportunity for companies to engage with consumers and the authorities and show their willingness to help them with their drive to tackle obesity.
Yes, early adopters of the new front of pack labelling will have to swallow the costs of introducing a new system and even worse in the short term they may lose market share to those competitors choosing not to use it. With competing systems in play, it’s highly likely that someone with a red label may lose out to someone without a coloured label on the front, even if that non-labelled product is a big sugary doughnut.
But those choosing not adopt the labelling are playing a risky game; consumer groups are already calling for the Government to name and shame those companies not playing ball.
If companies don’t get behind this system and support it, the lobbying against both them, and our industry as a whole, will intensify. It could eventually tip the Government to take a more hard line approach regarding what and how we sell.
After all, consumer goods companies know they must be part of the solution. Many are already implementing their own education programmes to help consumers make more informed buying decisions and some have voluntarily said they would not advertise products that are high in fat and sugar to children.
If consumers want it, and will use it, then I believe a consistent labelling system is a positive step for the industry. Early adopters will be seen by consumers, and the Government, to be more responsible and transparent about what’s in their products.
But we need to go further. As discussed at the recent Consumer Goods Forum, consumer goods companies should set themselves targets, report regularly on their progress, and be held accountable for meeting them.
Consumer goods companies know that by addressing consumer demands for clearer labelling this can create opportunities for them to better engage with consumers, and encourage them to buy their products. Consumer goods executives surveyed by KPMG and the Consumer Goods Forum told us they believe an increase in informed consumers will have the most positive impact on their overall profitability; 39 percent said that more health-conscious and educated consumers provide the greatest opportunity for their organization.
And of course, whilst labelling won't prevent obesity, it's a step to helping consumers make informed choices about what they eat.