By Len Monheit
Calls for 'full disclosure' and 'truth' are ringing through supplement, food, beverage and even associations over the past few weeks, as first, The Council for Responsible Nutrition submits a complaint to the Federal Trade Commission over the business practices, name and marketing of Consumerlab.com Filed Complaint: http://www.crnusa.org/pdfs/CRNFTC_ConsumerLabs011205.pdf and then US-based functional beverage company V-Net Beverage, Inc. launched its "Truth in Ginseng" urging industry-wide full disclosure on ginseng labeling, including a stringent testing and authentication program, and education to consumers.
These most recent calls for truth, or at least the elimination of the potential to mislead (probably a more practical objective) are the end product of:
- Frustration at the inability to communicate differential value,
- Frustration that messages (sometimes, or most often, the wrong ones) are taken completely at face value despite the fact that they defy logic or common sense,
- Suggestive and manipulative marketing practices, and perhaps most pervasively,
- An inability to educate the target market on 'what really matters'.
The link between disclosure and truth is a tenuous one. The principle of disclosure (at least in this context) seeks to create a more level playing field and a higher baseline awareness of certain recognized or understood (and presumably valued) precepts. The higher baseline 'awareness' and the value concept, both pre-suppose massive education programs amidst a storm of information (and misinformation), making it a very challenging and ambitious prospect. Does that mean that these efforts should be discouraged? Certainly not, since it is only through these efforts, that differentiating efficacious from non-efficacious products, and products and companies that do in fact 'make the grade' from those that do not, will ever be possible.
I find it interesting to note a release issued by Netherlands-based branded ingredient company Acatris this week. In the release, the company issued a 'High Lignan consumer Alert' urging consumers to recognize and seek products that list the actual amount of flax lignans on the label, as opposed that merely claim 'high lignan' content without specifying the amount. In a similar vein to that proposed by V-Net, the company is trying to raise awareness that not all products are equal and trying to identify at least one aspect that consumers should investigate as a piece of information to allow them to make better buying decisions. And CRN's complaint against Consumerlab.com seeks, among other things, to make Consumerlab.com specify names of companies whose products both pass and fail Consumerlab.com's Voluntary Certification Program (not presently the case hence an argument that the presented results are misleading, as well as creating an uneven playing field). Under the current system, companies that pay for the Voluntary Program need not fear that failing results will be disclosed - and so the consumer will never know.
The concepts of leveling a playing field and providing information that allows better buying decisions will define the industry and its products in years to come. It doesn't matter whether we're talking about business to business or business to consumer, it doesn't matter whether we're talking supplements, natural health products, functional foods and beverages or cosmeceuticals, starting with a level playing field and empowering buyers are key success factors for industry and its various sectors.
A level playing field implies (as it must) a higher baseline awareness and knowledge base constructed by communication, education and consistent messaging. This messaging must raise the bar while still allowing product and company differentiation. Are all omega-3 and vitamin E products equal? How do we build category awareness, set up for growth and yet allow differentiation, all the while keeping messaging simple? Are there industry-wide steps that can be taken to raise the bar? What other information allows better buying decisions?
And one question important question which must be asked at a certain point is "are your customers ready for and interested in this information? if you agree that the above is beneficial, then doesn't it become your responsibility to help your customers get ready for or get interested in this type of information.
What does it mean to belong to a trade association? Do different associations stand for different things? Many companies in our industry are involved with third party quality, certification or compliance programs, (either at the company or specific product level) and most, but not all, have rigorous Quality Assurance practices in place, some of which include supplier selection and validation. Is there any mechanism and format, and ultimately a communication vehicle and commitment, to effectively present this information so that it helps to raise the baseline, and provide the platform for value differentiation? We've talked in the past about industry 'outliers' causing many of the product quality, safety or efficacy concerns - Are there any ways to differentiate these outliers? Perhaps even by redefining industry commitment and participation?
I know for a fact that there are customer segments who are actively seeking this information from us.
It's a tough route to navigate and some customers might just not care. I think we can sense this pressure for more disclosure. While it might not empirically lead to 'truth', it should be several steps in the right direction. And taking this one step further – is enhanced value chain transparency practical, and most importantly, valuable? Only you – and your customers, know that for sure.