Ingredion Incorporated, a leading global provider of ingredient solutions to the food and beverage manufacturing industry, has recently shared the first-ever research which highlighted the profit potential of clean label formulations. In this study, conducted with global product developers across large and mid-sized food companies, 40% of global manufacturers reported taking price increases, and 58% reported an increase in overall revenue after converting to and making clean label claims.
Daniel Haley, global platform leader for Clean & Simple Ingredients at Ingredion said, “The new research showed that clean labels can generate increased revenue in addition to creating substantial consumer value. Our proprietary ATLAS data showed 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 4 regions reported that at least half of their portfolios have already been converted to clean label formulations and have plans to increase their clean label efforts in the next 2-3 years. The Asia Pacific region reported greater than 50% conversion to clean label formulations across its product portfolios. In the next 2-3 years, an additional 15% of product portfolios are projected to convert to clean labels as well. 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 3 key barriers to clean label development as follows:
- 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 3 in 10 companies experienced difficulty formulating with clean label ingredients due to lack of experience 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. The Asia Pacific region in particular will grow 10% for clean label sweet bakery products, and 9% for clean label savoury products in the next 2-3 years.
Ingredion, which kickstarted the clean label movement 25 years ago with the introduction of NOVATION® and has the broadest portfolio of clean label ingredients of any supplier in the world, conducted this latest global clean label study in August 2021.
Insights from the study, along with Ingredion’s preeminent ATLAS consumer research, last updated in 2020, on ingredient acceptability and awareness, can be found on the company’s website.
Ingredion Incorporated reported annual net sales of US$7 billion and it turns grains, fruits, vegetables and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing and industrial markets.
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