Food Labeling Gets Further Federal Backing/Wal-Mart Institutes New Food Label Program, Business and Industry Trends Analysis

Food labels have undergone heavy scrutiny in recent years.  Starting in January 2006, U.S. labels have been required to include the amount of trans fat present, and they must list any of the following potential allergens if present:  milk, eggs, peanuts, tree nuts, fish, shellfish, soy and wheat.  Food labels include total calories per package in addition to serving sizes and calories per serving.  Calorie counts are listed in bold type that is often larger than that used for other information.  The change prompted food companies to spend billions of dollars to reformulate food products to reduce or remove trans fats and allergens and revamp labels.

In the U.S. and other nations, consumer demand, often fueled by special interest groups, will continue to drive changes in food labeling legislation.  In recent years, large numbers of class action lawsuits have challenged claims made on food labels.  The FDA bears the burden in the U.S. of enforcing proper food labeling and playing watchdog over nutritional claims on product packaging.  Claims must be carefully worded, however, and may need to be backed up by information gathered in proven clinical studies.

Grocers are also involved in labeling with nutrition values sometimes printed on price labels that adorn store shelves below each product.  Kroger Co. uses a scoring system that ranks food with regard to nutritional value.  The scale is from 1 (lowest in nutrition) to 100 (the highest).  For example, Kellogg’s Special K cereal scores a 23 while Post Shredded Wheat scores a 91.  Called the NuVal System, it was developed by a panel of nutrition and medical experts.  Kroger and other retailers such as Hy-Vee, Inc., Price Chopper Supermarkets and Raley’s pay a licensing fee to NuVal LLC.

Wal-Mart launched a broad new labeling initiative called “Great for You.”  Unlike NuVal’s labels which appear on store shelves, the Wal-Mart labels appear on food packaging.  The labels appeared, starting in the spring of 2012, on foods that are low in saturated and trans fats, added sugar and sodium.  The information is basically the same as that found in the federally-mandated nutrition labels found on the back of all food packaging, but the company believes that highlighting healthy foods on the front will make a difference in consumers’ food choices.  Wal-Mart is making the decisions as to which foods will have the labels.

Meanwhile, federal regulations now require that all restaurant chains with at least 20 locations post nutritional values for their menu items.  The Food, Conservation and Energy Act (also known as the 2008 Farm Bill) expanded a previous Farm Bill from 2002 that required the country of origin to appear on labeling for beef, lamb pork, fish, perishable agricultural commodities and peanuts.  The latest act expands the list to include chicken, goat meat, ginseng, pecans and macadamia nuts.  This may be good news for consumers, but it places a burden on retailers.  The USDA estimates that grocery stores and other food retailers will spend about $247 million per year to keep additional records.  A technology company called YottaMark developed a system called HarvestMark to offer sourcing information linked to bar codes on food labels.  A consumer can use a cell phone camera to take a digital picture of a bar code.  Then, the consumer can email the photo to YottaMark’s servers.  YottaMark then sends vital data back to the cell phone, including the authenticity of the bar code, and content, expiration or place of origin information about the product.  GPS manufacturer Trimble acquired HarvestMark from YottaMark in April 2015, seizing an opportunity to boost Trimble’s line of agricultural and supply chain technologies.

A labeling initiative in the U.S. relates to genetically engineered crops.  The Non-GMO Project is a nonprofit collaboration that is authenticating labels to certify foods that contain no genetically modified content whatsoever.  As of early 2018, the organization had verified more than 43,000 products.  U.S. sales of non-GMO products have soared.

Austin, Texas-based Whole Foods Market, a natural and organic supermarket chain, announced in early 2013 that it will require labeling of all foods and packages containing genetically modified products by 2018 in its 300+ stores in the U.S., and Canada.  Such labeling is already required in the EU and practiced at Whole Foods’ stores located in the UK.

On the global front, the World Health Organization (WHO) also promotes improvements in food labels, proposing more nutrition and serving size information.  The EU revamped its labeling laws for food and adopted new standards in 2011.  The laws include mandatory nutrition information, country of origin for meats, allergen presence, nano-ingredient presence, and specific origin of vegetable oils.  In late 2014, WHO called for a complete ban of trans fats throughout Europe.

In late 2015, the Grocery Manufacturers Association announced the formation of the SmartLabel transparency initiative, a group of 30 food companies including General Mills, Inc., Hershey Co. and PepsiCo, Inc.  The initiative hoped for the use of smartphone scanning technology for SmartLabels on 34,000 products by the end of 2017.  Scan the label, and the app displays detailed information about the product’s ingredients.  SmartLabels allows, but does not require food companies to reveal GMO ingredients.  The labels use Quick Response (QR) codes that links to the manufacturer’s web site.