Published on: January 25, 2011by Kevin Coupe
PHOENIX -- The Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA) yesterday revealed details of their voluntary front-of-packaging labeling initiative, called “Nutrition Keys,” that they said was designed to help consumers make more informed decisions while shopping the supermarket. The organizations said that while it is impossible to know the extent to which the industry would adopt the Nutrition Keys program, early reactions indicate a broad likelihood of acceptance, with expectations that consumers will start to see them on CPG products within a few months, and some sort of critical mass reached within a year.
However, some news reports suggested that while the food industry was portraying the move as consumer-friendly and in synch with where the federal government is going, some critics say “the industry is trying a pre-emptive strike so it doesn't have to use a plan being developed by the Food and Drug Administration,” according to USA Today.
The Nutrition Keys program will feature four icons - one each for calories per serving, saturated fat, sodium and sugar, and, according to the industry leaders making the announcement, will be science based and “not interpretive.” In addition, there will be the opportunity for adopters to include “nutrients to encourage” on their labels, or “nutrients needed to build a ‘nutrient-dense’ diet.” These can include potassium, fiber, vitamin A, vitamin C, vitamin D, calcium, iron and protein, but can only be included if they represent more than 10 percent of the minimum daily value per serving, and meet Food and Drug Administration (FDA) standards for being a “good source” of that nutrient.
Pamela Bailey, president/CEO of GMA, said that Nutrition Keys has been developed in concert with both the US Department of Agriculture (USDA) and the Food and Drug Administration (FDA), and reflects the current science espoused by both governmental entities.
According to the New York Times story, “The executives who made the announcement repeatedly invoked the campaign against obesity initiated by Michelle Obama, the first lady, saying they had developed the voluntary labeling plan after she challenged them to help consumers make more healthful food choices.
“But in fact, the industry went its own way after months of talks with the White House and the Food and Drug Administration broke down.
“The Obama administration wanted the package-front labels to emphasize nutrients that consumers might want to avoid, like sodium, calories and fat. But manufacturers insisted that they should also be able to use the labels to highlight beneficial nutrients, including vitamins, minerals and protein.
“The administration concluded that ‘in the end, the label was going to be confusing, because those things would be included out of context, and it could make unhealthy foods appear like they had some redeeming quality,’ said an official who was not authorized to discuss the talks and spoke on condition of anonymity. For example, the official said, ‘ice cream would be deemed healthy because it would have calcium in it.’
“As a result, the industry’s plan received only tepid approval from Mrs. Obama — a stark contrast to her enthusiastic support last week of a healthful eating initiative from Wal-Mart, which pledged to reformulate its store-brand foods and devise an easy-to-understand label showing which foods were more healthful.
“The industry move was widely seen as an attempt to influence the F.D.A.’s continuing effort to establish voluntary guidelines for front-of-package labeling. Once those guidelines are issued, perhaps this year, the industry could come under pressure to change its packaging again. In a statement, the White House said the labeling initiative was ‘a significant first step’ but added that it would ‘look forward to future improvement’ in the system. It said the F.D.A. would closely monitor the effort ‘to evaluate whether the new label is meeting the needs of American consumers’.”
USA Today also reports this morning on brewing controversy about the new labels.
"’Just putting those numbers on the front of packages could be confusing rather than helpful,’ says Kelly Brownell, director of the Rudd Center for Food Policy and Obesity at Yale University. ‘People may not know how to use these numbers in the context of a day's diet.’
“The program has not been tested or approved by an impartial group and doesn't contain a simple color-coding system that would help consumers make sense of the numbers, he says.
“Marion Nestle, professor of nutrition at New York University and author of ‘Food Politics,’ says, ‘It's hard not to be outraged at industry pre-emption of what FDA is trying so hard to do’.”
Gary Rodkin, CEO of ConAgra Foods, said that Nutrition Keys represented a “monumental effort,” and that manufacturers would be investing “substantial resources” to change the face of food labels. He committed his company to putting the new icons on 100 percent of its products.
Ric Jurgens, CEO of Hy-Vee, said that he expected the system also to be embraced by private brand manufacturers, and he said that Nutrition Keys would be seen on Hy-Vee’s own label products “as quickly as we can possibly do it.” In addition, Jurgens said, he believed that the initiative will actually work in a complementary fashion with existing nutrition labeling systems such as NuVal and Guiding Stars, providing greater amounts of specific information that shopper scan use to make decisions.
And Leslie Sarasin, president/CEO of FMI, said that it was her understanding that Walmart - which announced its own healthy eating initiative last week - intends to utilize the Nutrition Keys program as part of its broader effort.
All the parties involved offered credit to First Lady Michelle Obama, who has made a high priority of promoting healthy eating and anti-obesity efforts; the general consensus was that the First Lady’s advocacy pushed GMA and FMI to be aggressive in their development of Nutrition Keys. (Despite the Times story, the engagement with the White House was illustrated when Jurgens was interrupted on the podium by a call on his mobile phone from Sam Kass, a White House chef and policy advisor on nutrition issues.)
“Helping consumers make good decision isn’t just good business,” said Jurgens. “It also is the right thing to do. And when you can do the right thing, you ought to.”
The industry has committed to a $50 million advertising/public relations program supporting Nutrition Keys once it reaches critical mass.
The announcement was made at the Food Marketing Institute (FMI) Midwinter Executive Conference here.
Other notes from the conference...
• In a panel discussion on the subject of “Changing the Thinking on Center Store,” participants agreed that while center store represents 73 percent of total sales and 77 percent of profit, it also has shown slower growth than perimeter fresh food departments because of less attention and innovation. John Lewis, president/CEO, Nielsen Consumer North America, suggested that this represents $23 billion of “lost opportunity” because of consumers going elsewhere to buy products available in the center store of American supermarkets.
Lewis said that in order to regain these sales, retailers need to convert convenience from being an optional approach to standard operating procedure, and do a better job of delivery fully integrated solutions-oriented experiences in the center store.
However, Fred Morganthall, president/CEO of Harris Teeter, underlined the problem with making major changes to the center store, noting that even resets can create customer complaints, and that “scares the tar out of you.” Still, he agreed that the industry needs to be more aggressive about experimentation in this area.
On interesting point of agreement - the sense that understanding “shopper demand” has to be more important than “category management.”
• Author and executive coach Marshall Goldsmith spoke about employee engagement, and noted that getting employees to ask questions and take responsibility is key to making any enterprise work. Senior executives, or “highly intelligent people performing complex tasks need to be questioned more, not less,” he said, urging people to create work environments that thrived on this kind of participation.
• Mark Halperin, senor political analyst at MSNBC as well as an editor and political analyst for Time, underscored the problems that President Obama has in the business community when he asked for a show of hands from people believe that the president “has little or no understanding of how markets work.” Almost every hand in the room went up.
• FMI announced that Fred Morganthall, president of Harris Teeter, will succeed Jurgens as the new chairman in May.
• Fred Ball, chairman of of Ball’s Food Stores, received the Sidney R. Rabb Award, the highest award given by FMI, for his “exceptional service to the community, and strong advocacy on behalf of the supermarket industry.”
• Dean Janeway, president/COO of Wakefern Food Corp.received the Herbert Hoover Award, for “professional excellence in serving the food retail and wholesale industry.”
• Susan Mayo, formerly of Farm Fresh, received the Esther Peterson Consumer Service Award.
- KC's View:
- A few thoughts on Nutrition Keys, if I may...
Credibility and ubiquity will be important factors in whether Nutrition Keys. Credibility, in that the industry has to be sure that it does not end up with a PR nightmare in its hands, as when sugared children’s cereals started carrying labels saying they were a “smart choice” nutritionally. And ubiquity, in the sense that these kinds of initiatives work best when they are embraced by a vast majority of the industry, and everybody seems to be on the same page.
My sense of the announcement is that the retailers and manufacturers committing to the program understand this, and that they also understand that in age of transparency, missteps can undermine their entire effort.
I also don’t think there is necessarily anything wrong with trying to get ahead of the government system. The problem will be if companies abuse the system, or the industry is perceived as trying to confuse consumers - at which point, the industry will be put in a defensive position.
II’m guessing that Nutrition Keys will evolve over time, as new science becomes available and new nutritional priorities are established. But as a template for helping people make intelligent, informed decisions, it strikes me as a good start.