FEBRUARY/MARCH 2016

An Education

   

By Natalie Hammer Noblitt
 Buying what's 'natural' takes knowledge

Deciding to eat healthy may sound simple, but anyone who's read a food label recently knows things get complicated very quickly. As healthy eating guidelines continue to change — and consumers create their own definitions of how healthful foods should be produced — gourmet suppliers, retailers and shoppers find themselves sorting out heaps of information.

Consumers often hold gourmet food retailers and producers in higher esteem than traditional grocery outlets, believing paying more for better ingredients is the best way to find great taste that's better for them. The word "natural" many times is equated with healthy food and ingredients, but there currently is no standard definition in the industry for what natural actually means.

"The consumers we talk to are often confused by the word natural," says Rob Volpe, founder and CEO of Ignite 360, a consumer insights firm in San Francisco with extensive experience in food and packaged goods.

Although there is no labeling law on the use of the term natural, the U.S. Food & Drug Administration (FDA) considers it to mean a food product contains nothing artificial or synthetic (including all color additives regardless of source). However, the agency states this policy was not intended to address food production methods, such as the use of pesticides, or address food processing or manufacturing methods, such as thermal technologies, pasteurization or irradiation. It also does not take into account genetic modification of ingredients or the inclusion of controversial additions like high fructose corn syrup. A product claim of natural also doesn't describe whether the food has any nutritional or other health benefit, the FDA says.

Many consumers believe natural on a label means more than it actually does, according to a recent study by Consumer Reports. Nearly half of the consumers polled by the organization incorrectly believe that natural claims are independently verified. Shoppers in the study also assumed that natural products meant they were free of GMOs, hormones, pesticides, or artificial ingredients, which may or may not be the case.

It's easy to understand why consumers could assume natural products are already regulated. Organic standards have been set by the USDA, which says that products labeled organic must meet environmental and animal treatment criteria, as well be free of GMOs. But gourmet food producers say the organic definition is not clear to even some very educated shoppers, who still ask if GMOs are used in organically certified items.

It's become common practice for food producers and retailers to call out what is not in products, including pronouncements of being free of GMOS or ingredients like high fructose corn syrup. Labels can be cluttered with terms like "made with whole grains," "reduced sodium," "no added sugar" and many other claims.

Another trend for larger established brands is to extend their lines with products titled "simply" or "pure" — both terms imply natural qualities but with even less of a definition than natural. A recent report by the Hartman Group of Bellevue, Wash., indicates this strategy is a way to remove any negative or low-quality food processing reputation these brands might have in order to keep current with the popularity of organic and health-driven products considered premium in today's marketplace.

While labeling with these points can distinguish products with important characteristics, the practice also can lead to more confusion, says Darren Seifer, NPD food and beverage industry analyst. "This may make consumers wonder if a product labeled 'natural' but not 'GMO‐free' truly is 'natural,'" he says, which isn't always a good way to build trust in the industry. "This also supports updating the 'natural' definition to help consumers understand what can or cannot qualify for the label."

Vermont is poised this year to be the first state to enact a GMO labeling law. It would require all products sold in Vermont to disclose if they are produced with genetically engineered ingredients, even partially. This type of regulation would mean a need for change on many levels of the food industry.

"Today's consumers are particularly health sensitive, especially in the gourmet food market," says Shagha Tousi, a products liability partner at Nutter, a law firm in Boston. She has been following the federal court case challenging the law. "Many of these consumers would be disinclined to purchase foods labeled as genetically modified, though the term genetically modified can apply to a practice as simple as cross-breeding different types of potatoes, for instance, to develop a potato breed with optimal taste, shape and coloring."

While providing more information is good for consumers, Tousi, says there could be other complications with enacting the law: Labeling requirements could place high quality foods "further out of reach for many consumers, and potentially create a barrier to the development of technology that could help get quality food to markets that would otherwise lack such options."

A Debate on New Regulations
Even though there are no cohesive assurances about products labeled natural, consumers will pay more for brands that align with their values, including factors like processing. Eighty-seven percent of shoppers polled by Consumer Reports said they would be willing to spend more on items that met all their expectations for what a natural product should be.

Adding to those findings is Acosta's 12th edition of "The Why? Behind The Buy" report, released in 2015. Their study shows 44 percent of people would buy healthy foods even if they were more expensive. The Jacksonville, Fla.-based sales and marketing firm also found American shoppers are becoming less loyal to the products they've always bought and consumers with children are even more interested in purchasing organic foods.

After receiving petitions from citizens asking that natural claims be regulated — and with federal courts looking for help to sort out pending litigation related to the topic — the FDA has decided to take a look at regulating the term natural. Right now the agency is collecting input from consumers, producers and anyone with concerns to try to shape how standards might be put in place. (Visit www.fda.gov for more information.) The agency set a May deadline to receive comments. This process is the first step in determining if natural should be defined, and if so, how it will be used on labels.

A unified definition of natural could make educating consumers easier, say some in the specialty food industry, and keep specialty products at a premium level.

"The FDA's goals should be making foods and food labeling safe and transparent for the consumer public," says Matt Tolnik of Brooklyn, N.Y.-based Lawless Beef Jerky, a small-batch producer with gourmet flavors. "Whatever the definition of natural (the FDA creates), it should have a meaning that is easily and universally understood by consumers. One thing that we have seen in the jerky space is companies using 'all-natural' ingredients including 'beef.' While beef is a naturally occurring food, the process by which it is raised can be anything but natural, and companies can still feature an all-natural claim."

Consumers deserve clear information and have proved they are willing to spend more for assurance, say producers like Tim Millson, CEO of LaLoo's Goat Milk Ice Cream, Frisco, Texas. "People are more than willing to pay more for natural products if they can afford it," he says. "Equally concerning to consumers today is the ethical treatment of the animals. Most consumers are willing to pay more for eggs that came from a chicken that is truly cage free, milk from a cow that has access to a green pasture, etc. I will gladly pay more for the brand that meets my ethical beliefs."

But getting shoppers to spend more may not be enough to make paying for certification attractive to some gourmet food producers.

"Our goal is to produce the cleanest sriracha available," says Jolene (Jojo) Collins, creator of Jojo's Sriracha, a small-batch producer based in Denver. "We go to great lengths to source our ingredients through reputable channels. Once our ingredients are received, we are personally involved at every step of production. We know and stand by what's inside every one of our jars."

Collins has chosen not to label her jars with any formal certifications; as a small producer, she says the overhead associated with getting certified is cost prohibitive. It would impact more than just her business; it would also impact the farmers who must bear costs to be certified and then the consumer who would be charged higher prices.

"The certification in no way improves the quality of our product," Collins says. "We choose to be 100 percent transparent with our process and go to great lengths to personally answer any inquiries from our customers regarding our farmers, ingredients and process. We feel this is the best way to empower consumers in making educated decisions and also establish a genuine relationship with those who choose to support us." 

Sharing Collins' concern is retailer Amy Isabella Chalker, owner of Isabella Gourmet Foods in Santa Barbara, Calif. She finds gourmet retailers like her are in a position to help shoppers better understand the origins of their food. "My shoppers do tend to prefer foods with health properties, including low-glycemic options, vegan products, and gluten-free foods. Of those shoppers, at least a quarter of them are also looking for products that are certified organic and/or non-GMO," she says. "But because my shop retails primarily locally produced small-batch foods, many of my artisans cannot afford the organic certification process. Oftentimes it's enough for my customers to know the food is made by hand in a home kitchen using local, fresh ingredients."

Others think new standards and certifications will help the specialty food business. Having the FDA define natural would be a win for the industry, says Jason McCrea, founder of Boston-based McCrea's candies, which makes handcrafted caramels. "Consumers can then have the choice to buy or not based on a non-ambiguous label claim," he says. "I think it will help specialty food producers who are trying to distinguish themselves from the larger entities who generally focus on processing throughout and shelf-stability instead of quality ingredients."