Image courtesy of fda.gov
The evolution in shopping preferences toward organic, health-focused, sustainable and locally-sourced food and products has had a large part in creating the intensely competitive landscape the retail industry finds itself in today. Policy changes from local public health officials and the FDA—such as the recent “soda tax” laws that have gone into effect across the country—reflect society’s demands, but have put even more strain on CPG manufacturers struggling to keep up. Whether it’s a relatively small change or a big statute overhaul, these kinds of evolutionary rule enforcements can wreak havoc on a company’s go-to-market process.
And change is coming: nutrition info—the serving sizes expressed as what people typically eat—is getting a makeover. With consumers now eating larger portions, a new (May 2016) FDA mandate passed into law will require manufacturers to update their nutrition labeling to reflect today’s portions. Other changes include highlighting calories and servings, and adding “dual column” labels indicating both per-serving and per-package calorie and nutrition information. Which means the calorie count on that late night pint of ice cream might reflect the entire pint, instead of half or one-third of the carton. For the health-conscious consumer and those who advocate for transparency in packaged food ingredients, the FDA’s mandate was a welcome victory.
But for the manufacturers tasked with making numerous changes to massive amounts of products, it was met with pushback. The law was set to go into effect this month for large manufacturers, but in June opponents were able to delay implementation of law indefinitely, giving brands some time to figure out their strategies. In this case the FDA mandate may be on hold, but as shoppers demand more and more transparency when it comes to the foods they consume and the products they buy, it’s not a matter of if these types of changes are going to affect business in some form or another, but when.
Brands need to prepare. How can they reduce the potential negative effects of updating nutrition information? They can begin by embracing the change—as Carol Best, senior vice president, client engagement, SGK told Packaging Digest, “We see the Nutrition Label update as an opportunity to listen to consumers and give them even more of what they want—going beyond simple compliance to deliver a real brand advantage.” Some brands are taking advantage by proactively updating their nutrition labeling—Hershey’s is rolling out new labels for its Hershey’s Kisses Milk Chocolate brand in an effort to promote transparency and give customers an opportunity to make more informed choices.
But for manufacturers who haven’t yet taken any action to update their labels, they can still get ahead of the curve and test ways to communicate nutrition that don’t alienate or turn off shoppers. Virtual store studies are an ideal way to do this efficiently and realistically. Here’s how:
Anticipate change in shopping - before it happens.
Brands and retailers are very concerned with how a mandate like this will affect sales. They should be: if nutrition labels increase in size, with new serving sizes and new calorie counts front and center, will shoppers be less, or more, likely to purchase? What do companies need to do with their packaging to make sure they can (at a minimum) maintain sales? Are there new consumers they need to attract? By creating new packaging in virtual stores and then testing them with real shoppers they can learn: what do the shoppers take away from the current design? What needs to change? This evaluation can help determine if a new packaging design along with the new label is necessary, or if the new label is all that needs updating. It can also help brands learn how shoppers are affected by the change, ultimately getting a good read on the risk—or reward—of a new package design in order to allocate spending where it’s needed.
Implement changes more efficiently.
One of the biggest reasons many brands are protesting the FDA’s ruling is the fact that change is never cheap. Whether the new nutrition labels impact sales one way or the other is a result of the change, true, but the actual implementation to redesign, print, and distribute millions of labels is expensive and no easy feat. Which means brands need to cut corners where they can.
If the monetary impact and ROI of new packaging is determined to be worth a redesign, the new look might mean new shelf placement. VR can help here as well. Brands can efficiently work on figuring out the in-store arrangements and assortments in a virtual environment, and then communicate the new rollout with retail partners through VR images and videos.
Determine if it makes sense to implement new health-oriented products.
Some companies, like, PepsiCo, are looking ahead, shifting their focus to premium offerings that tend to be healthier, and other brands are following suit. Instead of having to physically create brand new products and then test them with shopalongs, focus groups and surveys, virtual simulations allow teams to visualize and evaluate new product offerings first. By learning how a new product will resonate with shoppers and how it will affect sales of flagship products, companies can make better decisions on how to move forward.
People are becoming much more cognizant of what they are eating and how it affects their health and well being. Changes in the nutrition label is just one way that trend is changing the retail landscape, and there will surely be more changes to come. Innovative technologies like virtual reality help keep transitions like these smooth and as painless as possible.