Earlier in the month, the U.S. Food and Drug Administration (FDA) issued long overdue guidelines targeted at cutting the daily salt content for both packaged food products as well as restaurant meals. When implemented, such guidelines are obviously going to impact food related supply chains, but a proactive approach could lead to both business and market opportunities.
The voluntary FDA proposal is directed at reducing the daily salt intake of consumers from the current average of about 3400 milligrams per day to a level of 2300 milligrams per day over the next decade. The new guidelines are an effort by the Obama administration to influence the food industry toward reducing the amount of ingredients such as sugar and fats within prepared foods in order to improve overall consumer health and consequently reduce medical costs.
These guidelines, as proposed, give food producers two years to begin cutting sodium levels in products, and up to ten years to make further cuts. The impact is expected to fall primarily on prepared-foods supply chain ecosystems.
As our food industry readers well know, salt is a fundamental ingredient in food, serving as both a form of a preservative as well as an enhancer of taste. Regarding the latter, taste preferences vary across the globe, within specific ethnic groups and within certain geographic regions.
In order to ascertain some industry perspectives on these guidelines, Supply Chain Matters had the opportunity to recently speak with Anton and Dagan Xavier, co-founders of product information dissemination provider Label Insight, a Chicago-based cloud-data start-up whose clients include the FDA.
Both of those gentlemen reminded us that previous efforts directed at reducing certain fat content of foods has led to some added augmentation with salt. One example is low-fat yogurts which both some perspectives, two-thirds of brands have high sodium content. Many readers are probably very aware of the high salt content that current exists in fast-food and other restaurant chains.
Never-the-less, reductions in sodium levels are happening around the world, with the United Kingdom leading in these efforts almost a decade ago. There have been many successes and from the lens of both Anton and Dagan, it all boils down to being transparent and open as much as possible. Actually, according to Dagan, it is broader than sodium and more about supply chain transparency.
An analogy that came to mind regarding Label Insight’s efforts in this area is that this provider provides performs something similar to an underwriter’s laboratory form of certification service. Founded in 2008, this provider’s tag line is that: “We are the brains behind grocery data” collecting, managing and transforming product information for food producers and consumers. While knowledge of product composition exists with food producers, other knowledge resides with farmers and suppliers. Label Insights analyzes products beyond just the label, to include generating over 15,000 attributes – such as nutrients and allergens – per product. These attributes come together to create a deep understanding of a product and can be customized to meet data views requested by retail, government and industry initiatives.
Both noted that consumers are seeking far more transparency in food ingredients, a requirement that manufacturers, retailers and food service providers have to respond to.
Our discussion further touched upon legacy global brands vs. new, more nimble brands that are now catering to global consumer’s desires for healthier foods, broader supply chain transparency and information dissemination. These up and coming brands have the advantage of setting the benchmark in more-timely product formulation innovation and information dissemination. However, bigger more global packaged and bulk consumer product goods producers have the experience in global distribution at-scale.
Moving forward, call for far healthier foods with great taste will come from a combination of efforts addressing higher sensitivity to consumer needs, more agile product formulation, and supply chain transparency. Those producers who cannot adapt will likely find themselves at a disadvantage to nimbler brands and product producers who recognize a fundamental change in consumer and regulatory preferences, and who can meet such needs in market-share growth.
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