By Steve Markenson, Director, Research, Food Marketing Institute
“Transparency is an imperative for growing consumer trust and loyalty.” These wise words are offered by FMI’s Doug Baker, vice president, industry relations in assessing The Transparency Imperative research study released in September by FMI, with support from Label Insight. This research looks at product labeling and transparency from the consumer perspective and why brand owners should care. Here are some key questions that this research addresses.
Is Transparency Important?
Yes! More than two-thirds of consumers (69 percent) say it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made. Of course, most consumers say it is important, so our inquiries went further.
How Do Consumers Define Transparency?
Transparency means ingredients and more. Having a complete list of easy-to-read, in plain English ingredients is the clearest indicator for consumers that a brand or manufacturer is being transparent, followed by in-depth nutritional information. In addition, roughly one-third of consumers also value other indicators, including allergen information, details on how products are produced, and information on how ingredients are sourced. The great majority of shoppers (83 percent) say they want more information than appears on product packages. With many feeling they know where to look for this additional information, such as by making use of websites or apps.
Does Transparency Impact Purchase Behavior?
The research findings make a direct connection between transparency and commercial benefit for brands. More than three-quarters of shoppers say they are more likely to buy food products that make available information beyond what appears on a physical label. More than seven in 10 shoppers say they are willing to switch from their usual brand to one that provides more in-depth information beyond what appears on the label. And, more than one-half say they are willing to pay more for products that offer more in-depth product information, beyond what is provided on the physical label.
How Does Transparency Impact Trust and Loyalty?
Transparency from brands has an impact on building consumer trust and boosting loyalty, according to shopper feedback. Eighty-six percent of shoppers agree (the highest level of agreement) that if food manufacturers or retailers provided access to complete and easy to understand definitions for all the ingredients, it results in more trust. Nearly as many shoppers (80 percent) say that they are more likely to be loyal to a brand that provides more in-depth information, beyond what is provided on the physical label.
The findings show that transparency from brands has a direct impact on building consumer trust and boosting loyalty, particularly among those coveted shoppers who spend more, are more educated and have larger families/children. Food retailers and manufacturers should recognize this direct connection and communicate the importance of transparency throughout their organization and to stakeholders.