Overview — Nutrition Labelling
Nutrition labelling is a requirement from the FDA on most beverages and packaged foods. These labels, also called the Nutrition Facts label, show the nutrient content of a food product to consumers, and guide them in food selection. This labelling process has been around since 1913, but for a different purpose, which is consumer protection. The law at that time required food manufacturers to list their ingredients on every package.The Nutrition Labelling and Education Act of 1990 also expanded the concept by requiring the listing of nutrient information. Nutrition labels now serve the following purposes:
- Provide information to help consumers make healthy choices.
- List nutrition facts that affect common health issues, such as diabetes and weight control.
- Serve as a guide for those on a specific diet.
The FDA also gives regular guidance to businesses in the food industry for any changes in labelling.Nutrition labels display the amount of energy (calories and kilojoules) and the amount of fat, saturated fat, carbohydrates, sugars, proteins and salt (all expressed in grams) present in 100g (or 100 ml) of the food. In addition to the mandatory requirements above, nutrition information may also be expressed per portion provided the number of portions present in the pack is quoted. As per FDA’s directive, the menu labelling requirements apply to restaurants and similar retail food establishments that are part of a chain with 20 or more locations. As part of the menu labelling requirements, restaurants are required to provide calorie and nutrition information of their food. Third-party ordering websites were not covered in the ACA language, so they are not required to comply with these menu labelling requirements. Improved nutrition can reduce healthcare costs. Obesity results in medical costs of $209.7 bn every year. $18 bn can be saved in healthcare costs just by reducing sodium intake to the daily recommended value.
The Value of Nutrition Labelling
Nutrition labelling is an essential component in running a business in the food industry. The U.S. Food and Drug Administration (FDA) requires proper food labelling. However, compliance with regulations is not the only goal of nutrition labelling.
With detailed nutrition information, business builds trust among consumers. The transparency provided with these labels shows the company’s honesty. Besides,it also helps protect business. For instance if a person is allergic to one of the ingredients in the product, labels help the customer be well informed about the ingredients of the product beforehand.
Nutritional Labelling Apps
Nutrition Labelling mobile apps provides a simple and efficient user experience by displaying the necessary information about a food product. The labels are key to provide the customers right and accurate nutritional information about the product.
The labels are captured as images and displayed in the mobile app along with the other relevant information for the product. This is displayed for a wide range of categories of food products, classified in general as ‘Ready to Eat’ and ‘Ready to Cook’. Further sub classifications are also done based on vegetarian and non-vegetarian products.
Customers are provided with a range of information including the fat content, sugar levels and energy levels and also the additives and allergens present in the food product which helps the customers to choose their food product wisely and according to their health needs.
Market Overview — Health conscious consumers and Nutritional Menu Labelling
- An average American eats out 4 to 5 times per week
- According to L.E.K. Consulting’s 2018 food and beverage survey, 93% of consumers want to eat healthy at least some of the time, with 63% trying to eat healthy most or all of the time
- According to Nielsen, about 75 percent of Millennials are altering their buying habits with the environment in mind. Nielsen’s 2017 global sustainability found that 67% of American consumers want to know everything that goes into the food they buy
- 61% of restaurant operators plan to offer more light or low-calorie dishes
- The US Food and Drug Administration (FDA)’s Food Safety and Nutrition Survey (FSANS) has revealed that 87 percent of US adults have looked at the Nutrition Facts label on food packages.
- The top four items that consumers look for are calories, total sugar, sodium and serving size.
- According to the US Food and Drug Administration (FDA)’s Food Safety and Nutrition Survey (FSANS), 70% Americans read nutritional labels on food items with sugar, calories, fat, sodium and carbohydrates being the most important nutritional figures.
- American consumers say their top three considerations for choosing a healthy restaurant are local and fresh ingredients, low-calorie options, and the ability to view nutritional information from the menu.
Current Solution: Use of Diet and Nutrition Tracking Apps
90% of consumers across different age groups read food labels.Of those who read labels, only a third checked nutrition information and ingredients. Nutrient information on labels was not often read because most consumers either lacked nutrition knowledge or found the information too technical to understand.
- Consumers typically use calorie tracking apps to monitor their calorific and nutritional intake
- These applications allow users to input their current weight and target weight and recommend how many calories the user should consume and burn daily
- These apps go on to also recommend the proportion of different nutrients based on the user’s diet goals
Market Size
- Revenue in the Online Food Delivery market is projected to reach US$0.77tn in 2022.
- Revenue in the Restaurant-to-Consumer Delivery segment is projected to reach US$108.90bn in 2022.
- At the same time, revenue in the Nutrition Apps segment is projected to reach US$0.63bn in 2022.
Customer Segmentation
Advantages of Nutrition Labelling
Aside from complying with FDA regulations, nutrition facts on product afford businesses with several advantages:
- Professionalism: Without a nutrition information label on a product, the company will appear unprofessional to consumers. They may even doubt a product’s effectiveness and instead choose competitors’ products that have detailed labels on them.
- Transparency: Food labels help improve brand loyalty, especially with millennial consumers. Sales may decrease if the business doesn’t have nutrition information on the product.
- Marketing: Most health-conscious consumers read the information present on the nutrition label. If the consumers find that the product has a sufficient amount of nutrients they need, they’ll buy it and most likely recommend the product to their friends and family.
Challenges to Menu Labelling of Nutrition
- Ensuring accuracy of the menu labels of food from restaurants is a time-consuming and iterative process.
- 53% Americans feel food labels are misleading and vague, with over 82% Americans feeling tricked by them.
- 43% Americans believe brands mislead consumers to sell products while 44% Americans distrust the health claims on food labels
- Restaurants keep changing their menu frequently which makes it difficult to monitor their nutritional content.
- Restaurants aren’t too keen to label their food if they don’t provide healthy eating options.
- Various research studies have been inconclusive about menu labelling to be an effective means to make people eat healthy
- The main challenge after menu labelling is to connect customers to the restaurants with the options that best suit their individual needs.
Psychographic-based Use Cases for Menu Labelling
- Health conscious people — May want to eat seasonal, organic and fresh food. They may as well be shopping for seasonal and fresh groceries from local markets
- Weight conscious people — Prefer outside food which is low in calories to help them maintain or lose weight but at the same time is a treat for their taste buds
- People on special diet — Growing segment of people looking for specific food like vegan, gluten free or low-carb food or food without certain ingredients to which they are allergic to or may have certain health issues
SWOT Analysis
