Food for thought: Online food retail's future depends on label standardisation

Every six months or so, the cycle of food labelling rumours re-surface, with reports that the FSA are once again suggesting a change in food labelling. The most recent of these was the suggestion of including traffic light labelling on products, a proposal which has since been dropped.

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The proposal however, won't be the last of its kind and has fuelled debate on the future of product labelling. Rob Tarrant, Managing Director of Brandbank, discusses the implications that increased product information has for eCommerce retailers and suppliers:  

Ensuring a label is up-to-date and correct when run off in a factory and attached straight to the food product is not hard. Online, however, things are not so simple. According to a recent GS1 Report, many grocery retailers such as Asda or Tesco carry over 100,000 product lines, each with a lifecycle of 2.3 years. That's an average of 40,000 products changing and churning each year. Ensuring that every single product listed has the correct product information can be incredibly time consuming.

Saturated suppliers

Major grocery retailers like Sainsbury's or Asda deal with thousands of suppliers, from the big ones like Unilever right down to the independent providers of one or two products. Imagine the time and patience it takes to contact the right people in every supplier company and ensure that they all continue to send updated product information for every single one of their products each time it is listed.

The suppliers themselves are faced with a similarly nightmarish proposition. The GS1 report predicts that the number of attributes that grocery retailers are required to hold for individual products will rise from 66 to 250 in the next five years. This will compromise of product information, ingredients, promotional and pricing attributes, handling instructions, health and wellbeing information, environmental and ethical recommendations, tracking data, and traceability attributes, to name but a few.  With requirements constantly changing, suppliers will have to be continually on the ball to update all of the different retailers with the correct information for each of their products.

The bottom line is, retailers and suppliers need to be prepared. Inaccurate product data can stop consumers repeating purchases, not to mention the serious legal implications of false advertising, especially when it comes to food allergies.

Don't get me wrong, there are definitely positive implications that come from increasing the detail of product data. Especially for consumers. First, given that obesity (and its related diseases) is the fastest growing medical issue in the UK, surely the UK authorities owe it to our food consumers to create an accurate and informative system by which foods can be compared?

Secondly, product labelling in its current form is simply being used as a marketing tool. Lack of standards, along with variations in the values used for food labelling, mean that, in most cases, it is impossible for customers to make an informed choice.

The future of food

Think of how different the online grocery shopping experience could be, for the consumer, with really detailed and standardised information. Customers could receive a personalised dietary journey via grocery retailers online. Consumers would easily be able to drill down to get more information than is available on the back of a pack in a supermarket and we may well see a bigger trend towards online food shopping because of this. With a bigger demand for healthy foods and socially and environmentally conscious brands, consumers will ultimately have the power to determine, more effectively, the ingredients or sourcing of the products they buy. All of the product data will be available for consumers to compare between brands so companies will no longer be able to gloss over the health-levels of their ingredients or the ethical nature of their company.

This is a real differentiator for online grocery shopping and something that retailers and suppliers should be pursuing. Yes, initially putting systems in place to collate all of this extra data is a pain; however make no mistake, the first retailer to complete this process will make a killing, offering a service which is streaks ahead of its competitors.

More detailed legislation may not yet have been introduced, but in the meantime this information is held in an indexed and searchable form by Brandbank, who supply this information to every online website selling grocery products. There is an opportunity for online retailers and suppliers to stay one step ahead of their competitors by using this data even more extensively. Rather than a chore, the call for extensive data labelling presents one of the most exciting opportunities for innovation the grocery sector has seen.

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