Sometimes the foods you buy are marketed to be healthy, with images of wholesome-looking farm-fresh ingredients right on the package, but then you read the nutritional table, in small print on the side of the box, and it tells a different story.
What would happen if those nutritional labels were required to be right there on the front of the package?
A new Journal of Marketing study explores the impact of moving nutrition labels to the front of the product packages. It’s a small change, but with a lot at stake, says P.K. Kannan, the Dean’s Chair in Marketing Science at the University of Maryland’s Robert H. Smith School of Business.
Kannan co-authored the report with Illinois State University's Joon Ho Lim, North Carolina State University's Rishika Rishika and University of South Carolina's Ramkumar Janakiraman.
Diet-related chronic diseases impose a growing financial and health burden on the U.S. economy by increasing costs of healthcare and widening diet-related health disparities, he says, summarizing his research in a recent article for the American Marketing Association. In the United States, more than one-third of adults and roughly one-fifth of children are considered obese, according to estimates from the Centers for Disease Control and Prevention.
And it’s no wonder. Since the 1970s, the typical American diet has shifted toward foods with higher calorie counts and lower nutritional value.
In recent years, public policy makers, food manufacturers, and grocery retailers have sought to design nutrition labels that can better inform consumers and help them make choices. It’s a key step, the World Health Organization, says, in promoting healthier diets and better health outcomes.
One such initiative is a Front-of-Package (FOP) nutrition label adopted voluntarily by food manufacturers. These labels put nutrient information up front – on the front of food packaging in a clear, easy-to-read format. The FOP labels present a thumbnail of nutritional information – calorie content, for example, and saturated fat, sugar, and sodium per serving.
In their research, Kannan and his co-authors assessed how having the FOP nutrition label in a product category would impact the nutritional quality of food products in that category.
Here’s what they found:
One: They found a significant improvement in the nutritional quality of food products in that product category.
Two: They found that the effect of FOP is stronger for premium, higher-priced brands and brands with a narrower product line breadth.
Three: They found that the FOP adoption effect is stronger for unhealthy categories and categories with a higher competitive intensity.
Four: They found that when FOP was adopted, manufacturers increase the nutritional quality of products by reducing the calorie content and limiting nutrients such as sugar, sodium and saturated fat.
The findings carry implications for a range of individuals – policy makers, food manufacturers, grocery retailers, and customers.
Policymakers, the researchers say, should encourage food manufacturers and retailers to adopt “voluntary, standardized, and transparent labeling programs” and consider options for broadening the information that’s presented in FOP labels. “We believe that policy makers should also invest in educational campaigns that inform consumers about the value of FOP labels and that would further incentivize food manufacturers to offer nutritionally better products,” they say.
The findings suggest that food manufacturers work to innovate across their product lines to stay competitive. Manufacturers in less-healthy and more competitive categories, in particular, could be more strategic and invest in innovation so they are ready to provide better products following FOP adoption.
Grocery retailers, they say, should lean hard into FOP labeling, promoting products with the upfront labels, knowing they can lead to better-quality products for their consumers, and ultimately helping the retailer build its positive brand image in what is a highly competitive sector. The researchers recommend that retailers invest in measures that help track sales of products with FOP labels and provide the data to their manufacturers to help speed the competitive effect of FOP labels.
“For consumers, keep looking for the FOP labeling,” Kannan says. “Our study finds that the brands that adopted FOP labeling offer nutritionally superior products than those that did not adopt the labeling.”
And that’s a good thing to remember when you’re shopping the grocery aisle in a hurry, and looking to buy relatively healthier products.
Read: “Competitive Effects of Front-of-Package Nutrition Labeling Adoption on Nutritional Quality: Evidence from Facts Up Front Style Labels,” in the Journal of Marketing.
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