Mars Shakes up Candy Category
With Nutritional Labels on Packages
By Dale Buss
Mars, Inc. staked out a position as a health and nutrition trailblazer in the worldwide confectionary industry several years ago. Now the marketer of such brands as M&Ms, Snickers and Milky Way is building on that leadership with a national rollout of a new nutritional-labeling system on the packaging of all of its candy products.
The privately held, $30-billion company plans to begin working with retailers on point-of-purchase (POP) ad campaigns and shopper education programs around its highlighting of “Guideline Daily Amounts” (GDAs) of calories and key cautionary nutrients on its packaging. Mars believes its program will dovetail nicely with proprietary, in-store nutritional-ranking schemes already operated by many supermarket chains.
“The consumer is our boss, and this is something that consumers have asked us for,” Hank Izzo, vice president of research and development for Mars Chocolate North America, told CPGmatters. “They want clear, transparent information, and we are giving it to them.”
Mars’ confidence in the appeal of its new labeling system in the U.S. is bolstered by the fact that it’s already fully in place and popular throughout the company’s European markets. In
fact, Mars’ executives have so much faith in the GDA scheme that they are lobbying other CPG companies and the federal government to embrace the basic idea for all food and beverage products.
Simplicity and honesty are two primary aspects of the appeal of Mars’ GDA system. It is elegantly simple. The front of the package of each Mars product bears an icon titled “What’s Inside,” that lists the number of calories and the percentage of the U.S. government-recommended daily number of calories that the package represents. On the back is a repeat of the calorie information as well as similar figures for total fat, saturated fat, sugars and sodium.
As the maker and marketer of leading candy brands, Mars arguably would have a lot to lose by so prominently and coherently displaying the bona fides of its sweet products
“Consumers were telling us that they find it very difficult to make [food] choices throughout the day and to manage a balanced, healthy lifestyle, and to get information about what’s inside the foods they ate,” Izzo explained. “The most important thing was calories, and getting help in managing their calorie intake as the day goes on.
“We also see this as something that goes back to leading the chocolate industry in creating a healthier environment, and we’re inviting others to join us because it’s the right thing to do.”
Retailer enthusiasm for and cooperation with the GDA system is important for its long-term success. Mars seems to be trying hard to make sure its approach is consonant with the independent efforts of various supermarket chains to provide useful health and nutrition information available to their customers by ranking products according to a star system, and other methods.
“We haven’t received anything but positive feedback from our [retailer] partners,” Izzo said. “Some have their own strategies and tactics [for nutritional information], but the key is doing what’s good for consumers and good for the business, and that’s where our strategies
come together.”
Also highly motivational for Mars is the possibility of becoming a Pied Piper for competitors, other food and beverage companies, and federal regulators with the GDA scheme. Mars executives want to promote uniformity of nutritional information, sure – but also, having established a standard that others subsequently adopt would help solidify its leadership in an attribute that has become increasingly important to the company.
To that end, Mars has been getting very proactive about promoting the merits of its GDA approach. It has drawn in the American Dietetic Association, for example. And Mars is promoting the system at trade shows and in meetings with competitors and other CPG players. Among them, General Mills already is using a similar GDA labeling system on the front of its cereal packaging.
“We’re also constantly there trying to talk about this and invite everyone to come along with us on this journey,” Izzo said. “The biggest opportunity is to get other consumer-goods companies to go in this direction … We believe that this is the correct option, from results we’ve had from testing with consumers.”
Also, Mars’ push is coming at a time when the Food & Drug Administration is reviewing the entire arena of front-of-package nutritional labeling to try to sort out the confusion consumers have been feeling, to figure out what’s effective, and, presumably, to come up with a one-scheme-fits-all approach that it could impose on all food and beverage manufacturers.
Mars’ GDA scheme is understood to be competing for the FDA’s favor with a handful of other approaches including, for example, the “traffic-light” nutritional rating system that has been used in the United Kingdom. So, last year Mars took out print advertisements touting the GDA system in the Washington Post and other publications read by legislators, regulators and others in the nation’s capital.
“If [regulators] are wanting to make a decision on this – which way to go – it’s important to know that some companies are moving forward on labeling,” said Marlene Machut, director of communications for Mars’ global chocolate business. “It’s important for them in the Beltway to see that companies are doing it.”
Market Watch
Food & Drink Product Launches
Decline during ‘09 Recession
By Lynne Cooke
The economic slump took its toll on makers of food and drink last year. Product launches declined nearly 30% from 2008, according to a recent review of Mintel’s Global New Product Database (GNPD).
“In the last decade, Mintel has only tracked occasional, small declines in new product introductions for the US market, never a decline as strong as this,” said Lynn Dornblaser, new product expert at the company. “We see that a number of small companies, which typically introduce a wide range of products, have been stopping or slowing their introductions due to the economy. Additionally, some categories have simply become so over-saturated that there is little room for new products.”
Despite this declining trend, Mintel said some categories and claims found a hidden niche in which to excel. Ethical and environmental claims increased from 9% of all product launches in 2008 to 17% in 2009. Specifically in this category, the environmentally friendly packaging claim nearly tripled, growing from 3% of all products launched in 2008 to 9% in 2009.
“The increase in ethical and environmental claims is less about companies introducing new products or changing their packaging and more about manufacturers communicating with their consumers and knowing what’s important to the people who purchase their products,” said Lynn Dornblaser.
Meanwhile, in clear correlation with the recession, products boasting an economy claim have increased by 72% from 2008 to 2009.
In addition, side dishes was one of the few categories of food and drink that saw an increase in 2009, with 16% more launches than in 2008. This increase is most likely due to new products that offer convenient solutions, such as vegetable steam bags, and to more people eating in instead of going to restaurants.
Food and drink introductions with an all-natural claim decreased from 15% of all launches in 2008 to 13% in 2009. The organic claim, showed a similar decline of 12% to 10% in the
same timeframe.
“Natural and organic products, which saw large increases in 2008, took a few steps back in 2009 due to their higher price points,” said Dornblaser.
Docs OK NuVal
The American College of Preventive Medicine (ACPM), an organization of top physicians committed to preventing disease and promoting health, has endorsed the NuVal Nutritional Scoring System as an easy and effective way to help consumers learn about the foods
they buy.
NuVal gives all foods a score from 1 to 100; the higher the score, the higher the food’s overall nutrition. All NuVal scores are provided on the supermarket shelf, making it easy for consumers to compare the overall nutrition of the foods they buy at a glance.
Digital Receipts to Roll
afterBOT, a provider of digital receipts for retailers, is rolling out its QuickReceipts Connect solution March 1 following a successful pilot in 38 stores in the Phoenix marketplace in Best Buy, Dillards, Smart and Final, and other stores. The solution provides consumers online access to their electronic receipts from participating retailers via MyQuickReceipts.com.
The multi-retailer solution is designed to provide access to important customer data, enable more targeted marketing campaigns, and offer a link to a next-generation money management service to help retailers gain and retain new and existing customers.
“afterBOT’s digital receipt expertise gives retailers more advanced ways to serve and support their customers, increase loyalty and reduce shopping stress,” said Jim Nadler, vice president of marketing.
Insights from Social Media
First Insight, a company that connects retailers to the voice of the consumer, has unveiled the newest version of Virtual Customer Viewpoint (VCV). The solution allows merchants to improve product selections, forecast future item’s sales, assess price points, and evaluate the strength and applicability of attributes of particular products.
VCV leverages online consumer activities and conversations to give retailers real-time information and a strategic advantage in deciding what to sell, and where, how, and to whom they should sell it. Retailers and brands can transform investments in social media and social networks into two-way conversations with consumers.
Fancy Food Fest
The 35th Winter Fancy Food Show in San Francisco had the highest attendance of any Winter Show in the past five years. The three-day event at Moscone Center, which ended
January 19, drew 16,780 buyers of specialty food from across the U.S. and around the world.
The show’s 1,300 exhibitors presented 80,000 specialty products from the U.S. and 45 countries, including Australia, Italy, Korea and Tunisia. There were 184 first-time exhibitors, and space was sold out for a pavilion featuring emerging food entrepreneurs. Participation was up 47% for the education program of 19 seminars, workshops and tours.
JANUARY 2010
Digital Labels Give Precision Foods
Edge in Manufacturing, Marketing
By Dan Alaimo
Digital labels for food and beverage packages are gaining traction for product innovation and brand management. That is a bonus for CPG companies initially realizing measurable benefits from the flexibility and speed these labels bring to the manufacturing process.
For example, Precision Foods in St. Louis appreciates digital labels’ high print quality, low startup cost for new items and the ability to “gang run” low-volume labels, said Charles Pombert, senior purchasing manager. But when three items from the company’s Mrs. Wages product line doubled in sales last year after new labels were deployed, the impact of the technology hit home.
“In the retail sales space, you want high quality, high impact graphics so your product jumps off the shelf. Digital labeling has offered that to us,” he said.
The 7-oz. jars of Mrs. Wages canning and preserving products include Citric Acid, Fresh Fruit Preserver and Mixed Pickling Spice. While not high-volume items, they are in demand. More retailers are stocking the items after the redesign. Precision relies on Innovative Labeling Solutions in Hamilton, Ohio, using equipment from HP, Atlanta, for its digital labels.
“We redesigned our retail line last year to reposition it as a premium product. Digital label printing allowed us to get a ‘Cadillac’ print at a ‘Chevy’ price in the smaller amounts we needed,” Pombert said.
“Digital labels have made it easier for me to do my ordering and combine runs. The quality of the product is one less aspect that I have to worry about. The quality is there from run to run,” he added.
Precision is currently using digital labels for tray labels, cut-and-stack jar labels, and pressure sensitive labels on a roll for its retail canning mix jars, like Mrs. Wages, Pombert noted.
“Digital labels have reduced start-up costs, and allow us to gang-run multiple labels to take advantage of economy of scale. It also allows us to meet specific customer requests for level changes or promotions.” For example, the manufacturer can add a starburst or banner to a label for special pricing “at a nominal cost,” he said.
The brand portfolio includes Mrs. Wages, Land O Lakes, Milani Gourmet, Orrington Farms, Southern Gourmet and Thick-It. Some products, like Land O Lakes, are licensing agreements where Precision does the manufacturing and marketing; others, like Mrs. Wages, are owned entirely by the company. Precision also makes products for food service, and industrial and contract manufacturing. Private label is another part of the company’s repertoire.
Digital labels make economic sense for store brands, where relatively short label runs can be combined with different labels of the same product with no break to change colors or plates.
“I can go from a brown label to a blue label to a pink label to a green label, and it still
counts as one gang run,” without the extra charges that would be incurred with other label printing methods.
Private label also benefits from the quality of digital printing. “I don’t have to worry about off registration. I don’t have to worry about off colors. From run to run, it is very consistent,” Pombert said. “We get a lot of requests for private label versions of our products, and digital label printing will allow us to produce these products economically.”
Pombert sees a bright future for digital labels. “When you have a huge variety of products, and none are very big buy-ins, it enables us to combine those runs, which is great for us,” he said.
“Digital printing is at a tipping point,” said Jay Dollries, president of Innovative Labeling Solutions. “Getting a seat at the table is difficult because printing in general falls under purchasing. But digital is revolutionary and really should be viewed from a marketing perspective if sales volume, market share and building loyalty are among the brand’s goals.”
Marketing is changing in the way consumers interact with brands, according to Dollries. “The ability to be responsive, target by region and speak to individual customers by leveraging demographic data is of the utmost importance. It is what consumers are beginning to expect from their brands. As marketing becomes more and more fragmented, the opportunity to engage lands squarely at the shelf.”
Digital labeling has ushered in a new era for packaging, completely changing how it can be designed, purchased, and how it works as a marketing tool for the brand. It also enables printing on nearly any substrate, he added. “Brand owners, package designers and marketers need to view digital printing as a marketing opportunity rather than a printing method.”
The efficiencies of digital labels is a supply chain advantage, said Jeff O’Reilly, HP’s sales manager, North American Label and Package Group
“Digital printing encourages brand managers to manage their supply chains more efficiently and more effectively. It allows them to introduce new products at will, and it allows them to introduce products that may not have the same wide distribution than some of their mainstream products, while enabling them to effectively retire certain products that may be at the end of their product lives,” O’Reilly said.
“So at its core, digital printing is a supply chain management tool that allows a vendor or a print service provider to support the supply chain and new product entry requirements of consumer products companies, technology companies, and essentially anybody that needs to have product identification and product decoration,” he concluded.
Market Watch
Global Beauty Trends for 2010
Focus on Innovation, Resilience
By Lynne Cooke
Though manufacturer and consumer attitudes towards the beauty industry were changed by the recession, innovation and resilience have paved the way for a new landscape in 2010, according to Mintel Beauty Innovation.
Nica Lewis, director of Mintel Beauty Innovation, lists trends as follows:
Mood Beauty Make-up has long been associated with making the wearer feel better, but recent product evolution has seen actual ingredients enabling this. In 2010, consumers will be able to enhance their mood through make-up and skincare, going beyond aromatherapy and simple use of scent.
Nu Natural A new vision of natural that is less focused on certification and more focused on results, efficiency and safety. In 2010, beauty products will evolve from today’s trend towards organic ingredients, revisiting attributes like authenticity, provenance and local production.
Pro-Tech’d Throughout 2009, there was a renewed emphasis on protection, one of the basic functions of skincare, hair care and color cosmetics. Beauty products offered increasingly powerful shields against not just UV rays, but also physiological and man-made factors.
Turbo Beauty 4G Developing 2009’s “Turbo Beauty”’ trend, “Turbo Beauty 4G” continues to capitalize on advances in biochemistry for higher-tech beauty products. Expect more quasi-medical results and “mix-it-yourself” solutions: at-home kits and cures that offer alternatives to cosmetic surgery and non-invasive procedures.
General Mills Reduces Sugar
General Mills has committed to reducing sugar in cereals advertised to children to single-digit grams of sugar per serving. The initiative includes increasing key nutrients, such as calcium and vitamin D, and providing whole grain.
The company’s first target was to reduce sugar in cereals advertised to children to 12 grams
of sugar or less. General Mills has already reduced sugar in many cereals, some by as much as 20%. By spring, cereals advertised to children will all have 11 grams of sugar per serving
or less.
Reynolds American Acquires Niconovum AB
Reynolds American has acquired Niconovum AB, a Swedish-based nicotine replacement therapy company by buying all outstanding shares of the company for about $44 million. The latter will be a separate operating company of Reynolds American.
Niconovum markets innovative nicotine replacement therapy (NRT) products under the Zonnic brand name in Denmark and Sweden. Its mouth spray and nicotine gum rely on proprietary technology for nicotine delivery.
