The health-food sector in the past few years has witnessed a pronounced inclination to clean-label foods. Clean label foods have easy to recognize ingredients that are natural, non-GMO, are unprocessed and contain no synthetic chemicals. Health food brands and companies address this concept through their offerings, products, and ethos. These companies are well aware of the fact that the modern-day consumer does not want to consume artificial ingredients and is aware of their negative impact.
A ‘Trends in Food Science & Technology’ study, with over 82,000 participants, indicates that food naturalness is crucial for the majority of consumers. They are keen to know more about how the food was grown, the steps in its production, and the properties of the final product. Consumers are willing to pay a premium to experience the benefits associated with clean-label ingredients. The increase in demand for clean-label foods is accelerating their growth in the market quite visibly in the Global Clean Label Ingredients Market Trends and Forecasts 2019-2024 report. According to its forecast, the global clean-label ingredients market will reach a valuation of US$ 51.14 billion (approximately Rs 3.5 lakh crore) by 2024, at a CAGR of 6.75%.
Asia Pacific leads clean-label growth
The Asia Pacific clean label market has registered an increase of 7.4%, making it the fastest-growing clean label market in the world. The primary reason for this steady growth is the presence of people of heterogenous economic backgrounds in Asian countries. In this region, the living standards of consumers have improved, along with an increase in their purchasing power. They want the luxury of multiple choices so that they can make informed decisions. In addition, 93% of consumers believe in the importance of detailed information regarding ingredients according to the Transparency Imperative 2018 study. Remarkably, 74% of the consumers interviewed say that they will switch brands if they get in-depth information about the product.
The demand for clean labels in India is also influenced by the growth of the organic, non-GMO, and natural food movements that are taking place in other parts of the world. For example, in the US, 91% of consumers believe that food and beverages with recognizable ingredients are healthier. Socio-economic factors also play a role in increasing the demand for easy to understand ingredients in food and beverages. Eating clean has become an aspirational lifestyle, and Indian consumers are now on the lookout for products that provide them with more significant health benefits. They are also actively seeking nutraceuticals that give them additional nutrition such as natural protein powders and superfood blends, amongst other such products.
Clean-label 2.0 is coming
As per a Morgan Stanley report, consumers are twice as likely to check the packaging of a product to ensure that if it is sustainable and environment-friendly. Due to the worsening environmental conditions, millennials want accountability from the brands they are associated with.
When consumers make the switch to clean labels, they do so wholeheartedly. If a person is switching to natural plant-based protein powder, he or she is likely to incorporate that powder in their breakfast, lunch, and dinner. Switching in itself leads to scaling in the increased demand for clean labels. A 2017 Nielsen report states that small manufacturers sold 40% of clean label products as compared to 60% of their conventional products. All these factors have led us to enter what experts are calling Clean Label 2.0, where consumers will require complete end-to-end clarity about the food they are consuming.
Shivam Hingorani is a founder of Ace Blend (Natural Protein & Superfoods Nourisher)