Last May, the FDA published its final rules for the new Nutrition Facts Label, affecting every packaged food item. The new regulation requires all packaging changes to be completed by July 2018. The recent election result has raised the possibility that the deadline may be extended; however, it’s not going away, and retailers still need to be prepared to act.
I’d like to reflect briefly on some of the broader implications for you and your organization. The good news is that – more likely than not – there will be some very attractive opportunities amidst all the risk assessments, packaging changes and compliance checks.
Responsibility for implementing these Nutrition Facts Label changes will lie primarily with suppliers. However, if they don’t achieve compliance by the stated deadline, products will have to be pulled from shelves, and so retailers must take a keen interest in facilitating the changes to avoid incurring both financial costs and damage to their reputation. All U.S. retailers must ask some key questions:
• What risks do the new FDA rules pose?
• How will we ensure no non-compliant product is bought or sold after the deadline?
For those retailers with private brand products, there is even more at stake. Updated labels could actually make products less attractive to customers, and so formulation changes may have to be considered for certain items. The requirement of updating labels could also put strain on key supplier relationships. And, of course, failure to comply with the new rules could lead to lost sales and damage to the private brand and the reputation of the whole organization.
Because the new FDA rules require different nutritional values to be declared, all products will have to undergo fresh analytical testing. With a new perspective on the nutritional content of food products, previously unnoticed or unmentioned health benefits may come to the fore. These could then be called out on the new packaging and product marketing to boost sales — “no added sugars”, “less than 1g fat per serving”, “rich in essential vitamins.”
Consumers have demonstrated in recent years that transparency around food sourcing and labeling is a significant factor in their purchasing decisions. So, in addition to highlighting health benefits, the requirement for a new kind of label offers retailers the opportunity to make more of the provenance and purity of their ingredients.
Lastly, the requirement to review each and every product also offers private brand retailers the opportunity to identify potential changes that could have a big impact. For example, have customers perhaps been complaining about saltiness or dull packaging that could be easily changed since both formula and packaging are under review anyway? Or has there been a lot of positive feedback about one product that you could use to inform a reformulation of other, less popular items?
Where to begin
Understanding the new FDA labeling rules, it goes without saying, is the crucial first step in making sure that your organization is prepared and equipped to meet the deadline. Only then can you begin to spell out the specific implications for you, including an impact analysis, and start to build an action plan. Time, resource and cost will inevitably be involved in meeting the challenges of the new rules, but this is somewhere you must invest — and investing properly will ensure that your entire product range is not only compliant but stronger than ever by the time the new rules come into effect.
All this will require close collaboration with suppliers. Especially when it comes to private brand products, where retailers are responsible for much of the decision-making involved in the product lifecycle. You will need to collect some key data, communicate with the right people and find a way to keep track of progress so you can spot any roadblocks and take action to ensure you aren’t held up.
Engage with your suppliers
Added to the complexity of correctly implementing the new FDA rules, many supplier organizations will be working with several retailers. And so, an important question will be: What can we do to make sure that your suppliers are prioritizing our products?
The short answer is supplier engagement. In other words, build a close working relationship with your supplier organizations. One where they feel supported by you, where what you ask them to do benefits them as well as you and where you share as much information as you can with them – treating them as both trusted and valuable.
Steven Howell, director of business development North America at S4RB. For more information visit www.s4rb.com.