The packaged food industry today issued a tame public response to the federal government's proposal to overhaul nutritional labeling. But the changes could prove costly for marketers, potentially leading to reformulations and new packaging formats, industry experts and lawyers say.
The proposal, outlined today by the U.S. Food and Drug Administration, represents the biggest change to the Nutrition Facts label since it was created in 1993. The uniform black-and-white label, which outlines calories and nutritional content, is affixed to nearly every food item sold at stores and is read by nearly two-thirds of all shoppers, according to the Food Marketing Institute.
The FDA's proposal would mandate several key changes, including putting calorie contents in larger, bolder type. Marketers would have to list "added sugars," rather than today's "sugars" listing, which includes added and naturally occurring sugar. Brands would also update serving sizes to "reflect the amounts people currently eat," according to the FDA. For instance, today the serving size for ice cream amounts to about a half a cup, but under the proposal it could be changed to a full cup. So the listed calories per-serving might jump to 400 calories from 200 calories, according to an example given by the FDA.
Also, some packages that are typically eaten in one sitting but split into multiple servings on the label would have to include information for a "single serving" of the entire package, such as 20-ounce soda or a 15-ounce can of soup. Other changes include listing Vitamin D and potassium contents, which are not on today's labels.
Meanwhile, the FDA plans to revise the daily values of several nutrients, including sodium, which would fall from 2,400 mg to 2,300 mg. So the labeled percent daily value of sodium contained in the serving size of a soup brand, for instance, could display as a higher amount. The agency stopped short of recommending a daily value for added sugars, which health advocates have urged.
Food makers must pay for the label changes. They also might have to alter other communications in advertising and on their own packaging claims so they align with the the new nutritional label, industry experts said.
"Undoubtedly this is going to increase costs. How significantly? Significantly," said John Feldman, an advertising lawyer with Reed Smith.
The Obama administration estimates the Nutrition Facts label changes could cost the industry $2 billion, but would lead to up to $30 billion in benefits over time. The proposal "incorporates the latest in nutrition science as more has been learned about the connection between what we eat and the development of serious chronic diseases impacting millions of Americans." FDA Commissioner Margaret Hamburg said in a statement.
The FDA is accepting public comment on the proposal for 90 days. The label changes are not likely to reach store shelves for a while, whatever form they ultimately take..
The Grocery Manufacturers Association, which represents more than 300 food, beverage and consumer product companies, issued a statement praising First Lady Michelle Obama, who announced the changes today. The trade group pledged to work with FDA on rulemaking. "For 20 years, the Nutrition Facts panel has been an invaluable tool to help consumers build more healthful diets for themselves and their families, and the time is right for an update," the organization stated.
But one ad lawyer who represents food companies said there will likely be some concern among marketers, especially from makers of unhealthier foods fearing the label changes could hurt sales.
"There is no question that there are people in the industry who are going to be very angry about this and are first going to try to fight it," said the lawyer, who requested anonymity because of client sensitivities. "But at the end of the day, the food companies are in the business of responding to consumer demand." And as consumer demand "is trending toward healthier choices," then ultimately "the food industry is going to adapt to that and alter the content of the food," this person said.
Rick Shea, a former packaged-food marketing executive and president of Shea Marketing Inc., said the changes, including listing added sugar and revamped serving sizes, could mean "more trouble for the soda manufacturers and some snacks and sweet goods." He predicted that it could lead to the use of more alternative sweeteners and "continued growth in single-serve packaging."
Coincidentally, Pepsi is debuting new advertising for its "mini cans" during Academy Awards on ABC this Sunday. The 7.5-ounce cans, which contain 100 calories compared with 150 calories in a 12-ounce Pepsi, have "attracted lapsed soda drinkers," Seth Kaufman, VP-marketing for colas at PepsiCo, told Ad Age.