Recap: Surviving the Shelves Seminar, on packaging and labeling
What’s the perfect look for a label? What do you want to show, what can you show and what do you have to show? And does it all fit on the label? These are major issues for consumer goods producers. Over 170 food professionals got informed by Unilever and Go-Tan and shared their own experiences on the seminar “Surviving the Shelves”, organized by Kneppelhout & Korthals. What does the future look like? Bing Go, CEO of Go-Tan, explains: “I hope it doesn’t get to our heads too much”.
Little impression? Here’s a small recap (in Dutch):
“Did you ever take a look at the label back in the days?”, asked seminar host Gert van ‘t Hof (host of Studio Sport, a Dutch sports show) to his mother, to which she replied that she did not. The importance of labels is playing an increasing role these days as people try to live more conscious. Product labels are required to have information on ingredients, nutritional values and allergies. Space that’s left is filled with claims like words, images and symbols, that allow the producer to tell the consumer something about the product. However, not every claim is allowed. During the seminar, representatives of Unilever and Go-Tan explained how they dealt with such claims. Explanation from a legal point of view was provided by our lawyers Eric Janssen (Competition) and Thera Adam (Food & Health).
Equal rules please
Delivering clear, straightforward and fair communication is the main reason to use food claims according to Simone Pelkmans, responsible for food labeling in Europe at Unilever. “We would like to comply with existing legislation, but not all legislation is clear”, she states. “The current legislation has many open ends, which increases a possibility of misinterpretation”. As Pelkmans elaborates, “the laws for claims are an instrument to determine whether certain food and health claims can be made in the first place. And if so, which ones can be made? A claim that focuses on the pace or extend of weight loss, both written and visualized, are not allowed. The claim that can be made is determined per ingredient”.
According to Pelkmans, the tricky part lies in the fact that individuals have room to make certain claims on food. An example from Dutch food blogger Rens Kroes is provided, in which the food blogger makes certain claims in a widely-read Dutch newspaper, while she states the opposite of her claims in the widely-read magazine from Albert Heijn, the largest Dutch supermarket chain. Furthermore, if certain positive features of food have been proven scientifically, consumer goods producers are not allowed to make these claims right away. Pelkmans advocates for equal rules for everybody. “As an industry, we should takes measures to ensure that all brands are treated equally”, she states.
To have more clarity on what can be claimed and what cannot be claimed, Unilever sometimes deliberately pushes boundaries on food claiming legislation. “When Unilever launched a bites and snack comparator, we knew that it would attract certain responses. And indeed, we have been challenged. Our defense was already prepared and was handed to the opponent right away. Eventually we did not get any reply and we were not challenged in court”.
What about competition?
Claims are necessary to distinguish yourself from competitors. But why do so many claims exist for one product? Eric Janssen, competition lawyer, explains using a clip from “Moscow on the Hudson”, in which the main character, a refugee from the Soviet Union, asks where the line for coffee is. As a result of competition, many producers are competing for the attention of the consumer. The question is not whether we want 10 or 30 varieties of coffee, but rather the choice of all these producers who offer many varieties. Or just one single producer. As we saw in the Soviet Union, we all know what will happen if we have just one producer. Coffee was not always available, and if coffee was available, you had to wait in line to get the coffee. Moreover, the coffee was low-quality and rather expensive.
Competition is surely not a bad thing. Janssen explains how companies deal with the intense competition in the so-called “supply chain funnel”. “Particularly producers of primary agricultural goods are facing many challenges. Sometimes they try to make certain pricing agreements to ensure that the price does not fall below a certain limit. Usually, the antitrust regulators respond with a large fine. For example, producers of pickled onions have tried to agree on pricing levels to have a certain stability within the market. However, and unfortunately, it is tough to get such agreements through the antitrust regulators. It’s not impossible though. Two companies can merge into one to get more concentration in the market. The recent merger of Netherlands-based Royal Ahold and Belgium-based Delhaize can be taken as an example. Another example could be the creation of a cooperative; crop growers can be a member of some agricultural cooperative. The Dutch antitrust regulators consider Versdirect as such cooperative. If the cooperative is acknowledged, the cooperative can plan the production, bundle the supply and sell the products from members based on European agricultural legislation. Coforta is an example of such cooperative in the Netherlands.
Certain branded varieties like Pink Lady apples or Tasty Tom tomatoes allow producers to distinguish themselves, for which they could potentially charge a higher price for these products. Production planning, supply bundling and sales have to comply with the antitrust rules. Reality clearly shows that this is possible.
When does it become misleading?
Lawyer Thera Adam elaborates further on where Unilever’s Simone Pelkmans’ story ends. What is mandatory to mention regarding nutritional values on labels. Do these rules also apply for single-use sachets of chocolate paste or honey? The answer is yes. According to a recent ruling of the 22nd of September 2016, labels of single-use products need to contain information on nutritional value. The question that arises then is how to use the limited space on single-use products to mention all this information. Another thing to mention is that misleading advertising is not allowed. But when does advertising become misleading? That’s a case for the judge or the Advertising Standards Authority (Reclame Code Commissie in Dutch). If a consumer or producer of a competing product considers a certain claim to be false, a complaint can be filed at one of these two institutions. The Advertising Standards Authority can give certain recommendations or alerts, while a judge can enforce a ban (including a penalty), a recall or a rectification. Overall, a minor decision to file a complaint can have major consequences. The case of Leev-marmalade in the Netherlands can be taken as an example. The company claimed that the marmalade consisted of 98% of fruit. As some of the fruit was concentrate, the claim was factually false, which resulted in a ban of sale of products that had this claim. Considering that the claim was written on every jar of marmalade, the company faced a major burden in this product recall.
The Teekanne-arrest of June 2015 is an important ruling. Prior to the ruling, it was widely considered that an interested consumer will look into the ingredients list of the product. But the Teekanne-case shows showing images of raspberries and vanilla blossoms accompanied with captions like “fruit tea with natural flavors” and “fruit tea with natural flavors, vanilla-raspberry flavor” are not allowed when the product does not contain any flavor derived from vanilla or raspberry. Same thing goes for crab salad, that contains more surimi than crab. Supermarkets have to sell this as surimi-crab salad.
Adam advises her clients to use claims that you can support. “Ensure that your support of the claim is ready. Ensure that marketeers and legal professionals work together. And: disclaimers can make up big time. A clear claim with a small caption that clarify or put things in perspective work very well!”
Go-Tan: whoever knows can tell us
Go-Tan, a family-owned business with a record history, does not use health claims for its products. Bing Go, CEO of Go-Tan, explains: “We care more about whether it’s tasty, hence health claims do not apply to us. Personally, I don’t have much on with healthy, organic, sustainable… however, we’d consider ourselves to be organic and sustainable as the consumer asks for such products. Healthy or unhealthy does not exist, only healthy and unhealthy doses do. For most Western consumers, the best improvement of health is to eat less with more variety”.
Bing Go worries that an exaggerated attention to food safety has a negative effect on public health, as producers would produce with less variation as a result. “Less raw materials in your products is one way to reduce the chance of a recall”. In reality, Go-Tan knows that recalls cannot be prevented after the company had to recall a type of wok sauce after it was contaminated with gluten. “The only truth is the fact that the products could contain anything. You cannot check all your suppliers or work in airtight sealed areas. Just one complaint of a consumer has to appear to cause a major problem”, he states. The question is how to deal with it properly. Plenty of ideas, but neither Bing Go knows the best solution. Therefore his call: whoever knows, can tell us!
RTL 7 Reportage
Journalists of the renowned Dutch TV station RTL 7 were also present. Watch the reportage (with English subtitles) here: