Natural Foods Merchandiser
Sales of third party-certified products explode

Sales of third party-certified products explode

Consumer demand for certification labels beyond organic is on the rise. New data from Schaumburg, Ill.-based market research firm SPINS shows that in 2010 non-GMO, fair trade and whole grain led the way.

Consumer demand for certification labels beyond organic is on the rise. New data from Schaumburg, Ill.-based market research firm SPINS shows that in 2010, sales in the combined natural and conventional retail channels rose 13.3 percent for Whole Grain Council-certified products, 16.6 percent for Fair Trade USA-certified goods and a stunning 25.3 percent for Non-GMO Project-verified products.

The growth was not as significant in the naturals channel—15 percent for Non-GMO-labeled products, for example—largely because environmental and health concerns that were once the provenance of committed naturals shoppers have now gone mainstream. Here’s a label-by-label look at what each certification means, and how retailers can drive sales through education.

Non-GMO takes off

“[Non-GMO Project Verified] is growing faster than any other label, and retailers would be foolish not to pay attention to it,” says Trudy Bialic, director of public affairs for PCC Natural Markets, based in Seattle, which supports mandatory labeling on products containing genetically modified ingredients. “Government and industry polls show anywhere from the high 80 [percent] to the mid 90s in terms of public support for mandatory labels.”

Bialic sees the Non-GMO verification program as a perfect partner to organic, which forbids use of GM seed but does not require mandatory testing. To earn the Non-GMO seal, manufacturers must follow rigorous “best practices,” including traceability, segregation and testing of high-risk ingredients. Those tests must show that ingredients contain 0.9 percent or fewer GMOs, in line with European Union standards. “Some people think non-GMO means GMO free, and unfortunately that’s not the case,” says Jeffrey Smith, founder of the Institute for Responsible Technology, based in Fairfield, Iowa, which worked with the Non-GMO Project to create the Non-GMO Shopping Guide for consumers (nongmoshopping guide.com). “Contamination is real.”

Fair trade hits its stride

Since the introduction of the first fair trade label in the U.S. in 1988, this certification has shown steady growth. Now, increased consumer understanding of the label has spiked sales to new heights. “Awareness of fair trade is only about 34 percent right now,” says Katie Barrow, spokeswoman for Fair Trade USA, based in Oakland, Calif., which oversees the Fair Trade certified label. “But once consumers know about it, eight in 10 say they’ll purchase [fair-trade goods]. That’s a huge conversion rate.” 

With fair trade-certified product sales up 15.2 percent in the naturals channel last year and 17 percent in mass, according to SPINS, it seems more shoppers are learning what the label means: environmental standards for land stewardship (more than 50 percent of products with Fair Trade USA’s seal are also organic), living wages for farmers and
a ban on GM ingredients.

Fair Trade USA is a member of Fair Trade Labelling Organizations International and is by far the largest and best known organization offering certification in the U.S. However, in the past year retailers have encountered a new label, Fair for Life, certified by the Swiss-based Institute for Marketecology. The organization not only certifies individual farmers and cooperatives, but the entire supply chain as well.

Whole grains grow

Sales of products with the Whole Grains Council’s two labels also showed double-digit growth in the past year. The basic Whole Grains Council stamp requires that a product have at least 8 grams of whole grains per serving, while the 100% Whole Grain label requires 16 grams per serving, plus all grains in the product must be whole grains.

The Whole Grains seal, though, is not a guarantee of healthiness. “Look for the label, but always read the ingredient deck,” says Seth Braun, a Boulder, Colo.-based nutritionist and author of Healthy, Fast and Cheap (Cookbook Resources, 2008). “There are a few labels with veracity, including Non-GMO and Fair Trade, from groups that really care, but in general, labels are not a reliable way to make healthy decisions.” Braun suggests retailers encourage customers to check for sugars, artificial colors, preservatives and other ingredients in all products, including those with the Whole Grains seal.

Selling customers on labels

The numbers don’t lie—customers are looking for third-party certifications. But education is key to these certifications’ continued success. Retailers can use tools like shelf talkers, information centers and continuing education classes­ to make the most of growing demand.

“Some co-ops have actually removed all products that contain genentically modified organisms, and others are requiring that all new products be Non-GMO Project verified,” says Smith. “[Distributor] UNFI provides Non-GMO shopping guides that we’ve created, and we encourage retailers to place these guides in prominent places to help shoppers navigate the store.” UNFI also provides shelf talkers designating Non-GMO-verified products.

Barrow agrees on the need for education. “Simply having products with the label isn’t enough,” she says. “Retailers hugely impact what consumers purchase, so they need to stock Fair Trade certified products and educate customers about their benefits.”

Sales of certified products

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish