Opportunities & challenges for brands under 2020 labeling regulations

Posted by Engracia Perez-Prada on Aug 31, 2020 7:00:00 AM

At the beginning of the year, we saw the first deadline for compliance with the FDA’s new nutrition labeling regulations come and go. Just a few weeks later, our lives and businesses were turned upside down by the COVID-19 pandemic. As food and beverage manufacturers navigate a consumer audience that has changed its attitudes and behaviors completely, they must also address changing the Nutrition Facts on their labels. As if there isn’t enough going on, label changes like those required under the current regulations can have wider-reaching implications for some brands. 

When we compound this with the impact of the crisis on consumer purchase behavior, even the smallest label changes must be carefully weighed. In the current marketplace, labeling changes may even further affect behavior. There are key topics to explore in order to take a proactive stand when it comes to brand equity, consumer perception, and more. We’re examining these topics in light of the prescribed label requirements, but many of these lessons are applicable to any changes, spurred from the crisis or otherwise. 

Reading Labels in Store

Play it up, or play it down? 

Some brands will find that these labeling changes actually highlight strengths of their brand, especially those with healthful ingredients, low sugar and lower overall calories. Why not communicate this positive news far and wide? Brands can use social media, advertising and other marketing vehicles to share with consumers, highlighting healthful offerings. Have the lowest sugar content of any brand in your category? This good news will be played up in the new nutrition facts label, so a smart brand can play it up in its marketing as well. 

But what if this is not so good news? This message becomes a little more complicated. The likelihood that most brands will completely change their product ingredients is slim. And if the ingredients don’t “show” well on the new nutritional facts label, then getting creative with the messaging may be the best option. In fact, some major brands have a whole page on their website devoted to dietary needs that allows consumers to browse based on preferences, such as gluten-free and kosher. Brands, in fact, are developing new products to meet consumer demands for healthier products.

Embracing authenticity

In a world where consumers are prioritizing purchases based on their principles or beliefs, rather than loyalty to a brand or product, brands have felt increasing pressure for honesty, integrity and transparency. This is just one thing that is driving a demand for authenticity. Consumers will notice if a company isn’t upholding the values that they care about or that the brand claims to care about. This is even more true in the current crisis situation, as our COVID-19 research has shown, the majority of consumers want to hear directly how companies are supporting their communities and donating goods and services. This mindset is part of what brands must consider when it comes to the new labeling, and overall communication about the nutritional considerations that will be highlighted. 

In a sense, the new regulations are enforcing some level of authenticity by requiring more clarity around the communication of certain facts. According to a recent study, 91 percent of customers value honesty from companies with which they do business, and 63 percent choose authentic brands over those that aren’t as transparent. Embracing the opportunity that the new labeling regulations can provide for authenticity is a good move for brands. Shed some positive light on what can be seen as a challenge, and make the most of the upcoming changes.

Broadcasting your packaging message

Food and beverage brands are being required to change the back of the label. Why not change the front as well? Above, we covered a little bit above about integrating this move into overall marketing, but there’s another opportunity that’s even more tangible. Take advantage of the required label redesign and amplify the positives in other places on the packaging, such as front of pack. 

Of course any packaging changes must be balanced with retention of brand equity. If the change is significant, make sure to complement with messages like “nothing’s changed about the great product you love.” In this way, brands can keep audiences educated and informed, and use the label to communicate key information to customers and amplify strengths. 

Solid foundation for decision making

How can brands decide which course of action is best for them? Gathering insights is critical, particularly during times of change. Immediate feedback is the best way to uncover insights and reactions from consumers on things like label modifications.There are methodologies out there that allow brands to capture insights from actual purchasers of products. For example, AMC Global has a patented process that invites purchasers to complete a survey and earn a reward, via a simple invitation sticker on the product itself. In this way, we can start to gather information on immediate reactions to a product. This allows us to gain a deep understanding of who is purchasing the product and why and, when it comes to the new labels, we can gauge reactions to any changes.  

Right now, packaged food brands need to prepare for the many challenges and opportunities that are presenting themselves daily as the global crisis continues to unfold. Synonymously, they must take a thoughtful approach to addressing the new labeling requirements. By gathering the right insights, brands can mitigate risks, plus capitalize on any advantages surrounding big changes like the new labeling regulations. There are many ways to approach authentic communication about your product, label and brand as it pertains to nutritional labeling, but there is no substitute for grounding these approaches in real data. Using the right tools to uncover how your consumer is reacting, thinking and feeling—in detail—can give you the foundation you need to move forward, in more ways than one. 

Have questions about how to increase your brand presence through packaging and labeling decisions? Reach out to us.