WHO’S BUYING CLEAN LABEL PRODUCTS?

CONSUMER | 09-11-2017

Myriad aspects inspire consumers to bring brands into their baskets, and those considerations aren’t always fixed. Product labeling, for example, is a relatively standard element of all fast-moving-consumer goods (FMCG). That said, however, the importance of clarity around the attributes listed on package labeling is on the rise, particularly as consumers are increasingly focused on product and label transparency.

In fact, when looking across the store, sales of conventional products are declining, while sales of products that tout being simple, “clean,” sustainable and free of artificial ingredients are on the rise. In addition to fueling sales spikes that are outpacing those of conventional products, the wave of transparent and clean label products is also changing the assortment on store shelves as retailers look to satisfy consumer needs.

Importantly, the growth of clean label isn’t limited to natural and specialty retailers. This is a mainstream movement. In fact, 93% of U.S. households have purchased a clean label product at grocery stores, while 70% have purchased at a mass merchandiser/supercenter and 31% at club stores. And looking across the FMCG space, half of all shopping trips now include the purchase of a clean label product. That said, certain shoppers are more likely to gravitate to clean label products than others.

So who’s driving this shift?

Interest in and purchase behavior vary by both income level and age group. Across generations, Millennials and Generation X consumers are more likely to seek out and purchase products that are labeled organic, free of GMOs (genetically modified organisms), and don’t include added hormones. Comparatively, members of the Greatest Generation place less importance on these claims.

Demographic groups influencing the forward movement of this trend include consumers under the age of 35, those with annual household incomes over $100,000 and families with children. They’re leading the way with respect to buying products they believe are better for them, their families and the planet. They care much more about transparency and clean label than older generations do, and their spending prowess is growing.

In addition, in-store is not the only place to reach the transparency-focused consumer. Data from the June 2017 Nielsen Digital Shoppers survey combined with our NMI consumer segmentation shows that the most health focused households are also the most likely to be engaging with online grocery shopping.

Manufacturers, brands and retailers will need a keen sense of current trends toward product transparency in order to deliver on evolving consumer needs. Clean label is a spectrum, and companies need to know where the shifts are happening. The bottom line is that transparency and clean label are not point-in-time fads. They have gone mainstream and competition for consumers seeking clarity, purity and responsibility is going to continue to increase.