Nutritional Labeling Provides CPGs, Retailers
WIth Unique Competitive Edge
By Dan Alaimo
The labels on packages of food and beverage products have become much more detailed at the same time that health concerns have spurred increased consumer demand for this information. The result, in too many cases, is consumer confusion.
Manufacturers can gain a competitive advantage by working with nutritional ranking systems, especially those that provide information to shoppers at the point of purchase. The new systems seek to simplify this data, while maintaining the credibility of sound fact-based nutritional advice.
“People are looking to their supermarkets to guide them to the more nutritious foods. They don’t want to see their supermarket as a place where they come, pick something up, and leave their money,” says Robert Keane, spokesman for NuVal in Braintree, Mass.
NuVal ranks supermarket products on a 1 to 100 scale based on nutritional information presented in on-pack labels, and after a proprietary analysis. The NuVal score is presented on the shelf label next to the price in retailer chains paying a licensing fee. The higher the score, the more nutritious the food. Competitive programs are Guiding Stars and Smart Choices.
While NuVal is still a new company – it started in 2008, and went into its first two chains in January 2009 – manufacturer acceptance has been good, says Keane.
“People are still learning about what we are. We are seeing that some manufacturers regard this as an opportunity to learn how they can improve their own products,” he says.
In most cases, NuVal obtains the information it needs to evaluate products on store shelves from nutrition fact panels and nutrition labels, “the way everybody else does,” he notes. “The manufacturers aren’t sending us anything. Part of what makes NuVal important is we are independent of food manufacturers.”
NuVal, LLC is a joint venture formed in 2008 by supermarket cooperative Topco Associates, Skokie, Ill., and Griffin Hospital of Derby, Conn., a non-profit community hospital, and home to the Yale-Griffin Prevention Research Center
Late last month, the American Journal of Clinical Nutrition published a study endorsing key parts of NuVal scoring. For example, the study found that higher-scored items in the NuVal system correspond to the DASH, or Dietary Approaches to Stop Hypertension diet.
The study also found that NuVal’s 100-point scale was preferred to other four-tier systems by a ratio of three to one. It reported that a Harvard study, due for publication in the near future, directly links NuVal scores to health outcomes, including total risk of chronic disease and all-cause mortality.
The company has set scores on over 41,000 items so far in about 160 categories. It is constantly adding more and Keane says “tens of thousands” scores will be added by the end of the year. Griffin Hospital does the actual scoring based on NuVal’s ONQI (Overall Nutritional Quality Index) algorithm, which was devised by Dr. David Katz, who is NuVal’s chief science officer and, according to Keane, the company’s “visionary.”
“The way scoring happens, we take down all the information – the nutrition fact panels, and the nutrition labels – to make sure we get an absolutely accurate score. At that point we inform all manufacturers of the scores their products have received and sometimes they will have questions. There have been times where some manufacturers have sought to increase their score. It gives us a great opportunity to work with them and advise them as to what can be changed,” Keane says.
After signing a non-disclosure agreement to protect NuVal’s proprietary ONQI algorithm, “we can go through with them and explain why their product scored the way it did.” This may result in a change in ingredients or formulation, and the products are then re-scored.
“But the score itself is done completely independently, which we think is important to gain customer trust,” Keane adds.
If the manufacturer is satisfied with the ranking, usually when it surpasses a branded competitor or a private label product, the company may find a way to promote the healthy qualities their items. “It can be seen as a competitive advantage. They could use NuVal to highlight their most nutritious products,” he says.
For instance, frozen vegetables often score as well as fresh produce, providing no ingredients with bad health effects have been added, like sodium. Also it can be used next to a “light” product to show the regular product is more nutritious. This has been seen in peanut butters where the “light” product has more sugar added to compensate for the taste lost when fat
is eliminated.
This can also help national brands compete with private label products, or vice versa, depending on which gets the higher score. “One of the advantages of having the NuVal score right next to the price is, not only are you seeing how nutritious the product is and how
much it costs, but you are also finding out how much nutrition you are getting for your dollar,” Keane says.
Shoppers who pay close attention to labels already know this, but they are not in the majority. “You can spend all day reading labels,” he notes. Most want a quick reference. “People just want to know which is better; which has more nutrition; which is actually going to nourish
my family.”
Dr. Katz has described NuVal as a “nutritional GPS system,” Keane reports. “The idea of tens of thousands of items in a supermarket is no longer daunting to consumers because now they can find out what foods are more nutritious at a glance.”
This positions retailers as more of a authority on nutrition. NuVal has been in two supermarket chains for over a year: Price Chopper and Hy-Vee. It added Meijer later in 2009, and will launch in United Supermarkets (Lubbock, Texas) this month. “We have continuing plans to expand across the country in 2010,” Keane says, estimating that the system will be in “hundreds” more stores this year.
Promotional efforts for the NuVal system are now mostly in-store, with signage, brochures, as well as placements in the retailer circulars, he notes. In some cases, the retailers have put the NuVal scores with advertised items. The company is building a new Web site to take greater advantage of the attention the existing one gets.
“We are involved in store associate education to make sure they understand what the program is, so if customers ask them about the numbers, they will be able to give a good informative answer,” Keane says.
The recent news that the U.S. Food and Drug Administration (FDA) is devising its own
on-pack nutritional labeling has poured cold water on some programs like this. But NuVal is proceeding, while keeping an eye on what FDA comes up with. “We will know more as the year progresses,” Keane says. Since NuVal’s program is not specifically on-pack, it may mean little.
“If anything, [the FDA plan] brings the whole idea of nutritional labeling into the spotlight. It shows that people are really looking for this kind of guidance,” he adds.
Recently, the American College of Preventive Medicine, a physicians’ group, endorsed the NuVal Nutritional Scoring System. Dr. Katz says this was the first time a national medical group had endorsed a non-federal nutrition guidance system.
“When we created NuVal, our primary goal was to improve public health with a robust and effective solution that was easy to use. We feel we have created that in NuVal and are delighted to gain the acceptance of an organization that shares our passion for healthier living,” Dr. Katz notes.
With high-profile people jumping into the nutrition fray, like Michele Obama and her campaign against obesity, “we are going to see more consumers demanding ranking systems that are independently run and reliable. And they are going to want them to be as comprehensive as possible, covering as many foods as possible,” Keane notes
“Our mission is to keep expanding, to reach out to more and more retailers, and to realize our goal of becoming the universal standard for nutritional rankings,” he concludes.
‘Digital Shopper Marketing’ Drives Sales
Along Path to Purchase: Study
By Lynne Cooke
Using digital communications to engage shoppers along the path to purchase – from “at-home” to “on-the-go” to “in-store” touchpoints – can drive sales and build equity at attractive ROIs for brands and retailers, says a new study.
Conducted by Catapult Action-biased Marketing in partnership with Forrester Research, the study focuses on the impact of Digital Shopper Marketing (DSM) on shopping and purchase decisions.
The online study of 1,100 consumers nationwide sought to gauge shopper usage and familiarity with DSM, while uncovering related opportunities for marketers and retailers to reach and activate shoppers. The study aimed to identify shopper demographics, shopping habits and to explore how primary shoppers perceive and use various digital technologies in their shopping practices.
According to the study, the most successful innovations provide shopper value via cent-off coupons and promotions, help shoppers make or validate a decision about what to buy and where to buy it, and improve ease of shopping.
DSM innovations include e-coupons, email, touch screen signage, kiosks for swiping loyalty cards to receive personalized coupons, among others.
“Digital Shopper Marketing is the new frontier as shoppers quickly take to new digital technologies and become comfortable with using them along their path to purchase,” said Jason Katz, Executive Vice President of Catapult Marketing’s Emerging Media Discipline. “Today's on-the-go shoppers are empowered by the benefits these new technologies provide them, which opens up a whole new world of opportunities for shoppers, brands and retailers.”
According to the report, DSM has made the greatest inroads with at-home technologies, with which shoppers are both familiar and comfortable. In fact over 60% of Gen X, Gen Y– shoppers go online before they shop, many the same day of their trip. This gives marketers the opportunity to impact shopper decision-making before they reach the store.
While on-the-go DSM technologies using smartphones are not yet widely used, GPS Location Services, mobile coupons, shopping lists and iPhone apps are up-and-comers; scoring high on interest, helpfulness and impact on purchase.
Consumers tend to visit retailer web sites for best prices and product reviews while brand sites attract more traffic for promotions and product use ideas.
The highest adoption of In-Store DSM technology is Self Checkout, which, although not influential on purchase decisions, eases the shopping experience. However, time-saving or value-producing technologies are also showing promise. Interest is highest with: Hand-held Scanners, Kiosks for swiping loyalty cards to receive personalized coupons, Touch Screen Signage, and On-pack/On-line and On-pack/Text promotions.
“On-the-go DSM technologies may well be in their infancy, driven largely by still low concentrations of smartphone users,” said Katz. “Still, we believe mobile DSM technology looms as the next killer app, as smartphone models proliferate and uptake grows. These applications allow marketers to serve up relevant information and offers to users in a wide range of formats, which is a win-win-win for shoppers, manufacturers and retailers alike.”
FEBRUARY 2010
Coke Launches ‘Shelf-Savvy Marketing’
To Boost Sales, Create Value at Shelf
By John Karolefski
Coca-Cola is rolling out a “shelf-savvy marketing” initiative that leverages the power of its special brand to evoke fond memories among consumers. The program aims to connect with all shoppers in the store – whether they are singles on a quick trip or families stocking up for the week.
Underlying the initiative is Coke’s notion of creating value through specialness and creating specialness through an experience. That’s the formula for selling more products at a
higher price.
“Shelf-savvy marketing is a new initiative that we’re trying to drive forward pretty aggressively,” said Darren Marshall, Vice President of Global Customer and Shopper Marketing at Coke. “At the end of the day, shelf-savvy marketing for us is all about blending and balancing love and value, fusing inspiring ideas with commercial disciplines, and bringing those two together to truly create value. That’s what shelf-savvy marketing is for the Coca Cola Company.”
He said Coke is thinking more holistically about its marketing in an effort to create value for shoppers, more of whom visit Walmart every week than watch the top ten TV shows.
“Shelf-savvy marketing is all about converting shoppers into buyers,” he said. “That’s how value is created, and we do that at the shelf. That’s where it all happens. So we’ve got to be able to make sure that we’re bringing that to life.
“As marketers, our role is to make this brand special – not just on the street, but also in the store, truly creating unique experiences,” he said in a presentation to retailers recently in New York at the 99th annual convention of the National Retail Federation (NRF).
Marshall said connecting with shoppers effectively calls for partnering with retailers to create value collaboratively. “What we don’t do enough of – and we’d love to be able to get your help with – is differentiating the packages, the price points, and the occasions within a retail store.”
He listed the seven habits of highly effective shelf-savvy marketers:
- Balance Create a balance between love and value. “It’s one thing to build a brand, but if you’re not making commercial value out of that as well there is really no need,” he said.
- Prioritize Decide among the many opportunities such as geographies, categories, occasions and shopping missions. “We’ve got to be strategic about what we’re doing, going after the things where we’ve got not only the biggest opportunity but the biggest set of capabilities to bring it to life.”
- Portfolio Think about how people are interacting with your portfolio, whether it’s a portfolio of brands, banners or store formats. “We have 450 brands across the world. We cannot cram 450 brands into every store in every geography. We’ve got to be able to make decisions and think about things in terms of what is going to be the best mix for those shoppers.”
- Segmentation Group shoppers into similar traits and behaviors. “As marketers, it’s our role to be able to understand what motivates people and how those motivations are different.”
- Differentiation Create distinct brands. “We differentiate brands. We’ve done it for a long time and we’ve created very distinct different brands.”
- Interruption Capture people in the store. “Only 30% of the people are going down the beverage aisles these days. As shopping patterns continue to evolve, that’s going to decrease even more because there are more {shoppers} who are very focused on going in and going out. We’ve got to be where they are, which means not just stacking high with big displays. It means being very strategic about where we’re placing things throughout the store.”
- Occasions Make the brands relevant when people are buying the product. “Whether it’s lunch at home with friends or it’s at a football game, bringing brands to life in a situational type of environment is really the magic of how brands truly live and breathe in our everyday lives.”
Marshall said it’s important to create “context” in the store because it creates demand. The in-store experience must be something different and special – maybe unique.
“It’s about making connections with our shoppers because we’ve got to be able to turn shoppers into buyers or else there’s no economic value created for anyone. If we forget that, then we’re lost,” he said.
Marshall gave the example of connecting with two different shoppers, each spending $3.50 to buy Coca-Cola. Maria buys the new 1.5-liter twin pack for her family, while Mike buys a chic, very cool aluminum bottle Coke.
“Think about the economics,” he said. “Maria is very price sensitive. It’s very important for her to get great value. Mike, not so much. The core lesson here is that one size does not fit all. The more differentiated that we can be, the more profitable that we can be as well. When we think about activating at retail, it’s all about being as differentiated as possible, as differentiated as our execution capabilities allow us to be.”
Market Watch
Sam's Club Rolls Out Demo Program
To Build Loyalty, Attract Shoppers
By Lynne Cooke
Sam’s Club has named Shopper Events, a third-party marketing company, to run its product sampling and demonstration program.
The new, enhanced demo program, called Tastes and Tips, aims to give Sam’s Club members the chance to discover new items and give store associates a fresh way to serve shoppers.
Shopper Events has an established record within Walmart, the parent company of Sam’s Club, where they manage the “Bright Ideas” in-store demos for Walmart U.S. The new “Tastes and Tips” demo program will include integrated demo stations, signage, uniforms and product selling. It will focus on presenting value and selection food and beverage, products for personal wellness and electronics.
“We spend a lot of time talking to and listening to today’s consumers and our own Club Members,” said President and CEO Brian Cornell in an internal memo to Sam’s Club associates. “We have found that in-club demos, or product sampling, is one of the things they love most about the Club experience. Our demos can be a competitive advantage and we want to take this Member experience to the next level.”
Shopper Events will be replacing the approximately 10,000 demo associates, most of whom are part-time. Cornell noted that the third-party marketing company will be staffing up for the work at Sam’s Club. Current Club demo associates will have the opportunity to apply for the new positions, he said.
Sunflower Pushes Nutrition
Sunflower Farmers Market in Boulder, Colo. is educating its shoppers about nutrition with two new programs – at-shelf nutrition tags and a nutrition microsite on the Web.
The independent grocer’s “Smart Tags Program” is an easy-to-read, color-coded nutrition labeling program formulated by Sunflower’s registered dietician, Maya. The retailer has also created a nutrition-themed microsite designed to help customers to start and stick to a nutrition plan in 2010
For the shelf tags, Maya combined the American Dietetic Association’s dietary recommendations with her personal passion for real food to create criteria for tagging in four areas: orange Smart Celiac tags; red Smart Heart tags; blue Smart Carb tags; and purple Smart Weight tags. For Smart Tag criteria, visit ww.sfmarkets.com/nutrition/smart-tags.
Nutrition Info at Farm Fresh
Shoppers at the 45 stores operated by Farm Fresh, a Supervalu banner, have way to
make more informed food choices at the store shelf via “nutrition iQ,” a nutrition information program.
Nutrition iQ employs color-coded shelf tags, conspicuously hung just below an item’s price tag, to help shoppers quickly identify better-for-you food options. First unveiled by Supervalu in early 2009, the program was developed in collaboration with Joslin Clinic, part of an academic medical center affiliated with Boston’s Harvard Medical School.
