Lentis/Marketing of Natural Foods

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Comparison of original, organic, and natural Tostitos chips. Original costs $3.46 for 13 oz. Organic costs $3.79 for 9 oz. Natural costs $3.99 for 9 oz.

Introduction[edit]

Recent years have seen an increasing trend in natural and organic food consumption. Many consumers perceive natural and organic food as healthy and beneficial to the environment, but do not fully understand regulatory differences between the two. In the United States, consumers have spent more than $40 billion annually on natural-labeled foods. 51% of Americans search for all-natural products when shopping. However, consumers are confused by the term's meaning and only 47% view the claim as trustworthy. Recent attempts to establish a standard in the absence of the government regulation, concludes that natural food labels are more likely to be abandoned by food manufacturers than it is to be defined in a uniform and enforceable manner. Without proper definitions and regulations, producers can continue mislabeling natural foods and profiting from them. [1]

Regulatory Standards[edit]

The three primary regulators of organic and natural foods are FDA, USDA, and Congress. FDA is responsible for advancing the public health. They provide accurate, science-based information for foods to maintain and improve health. They designate nutrition labels and regulate majority of foods. USDA mainly oversees meat, poultry, and eggs. They are responsible for defining organic. Congress passes legislation that affects how FDA and USDA can regulate food labeling.

Natural Food Labeling[edit]

FDA does not regulate "all natural" foods labels. [2][3] The FDA has considered the term "natural" to mean that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in that food. By definition, food products containing ingredients produced using genetic engineering or foods containing high fructose corn syrup may be labeled as "natural". FDA has consistently rejected the idea of defining the term "natural" for foods. Their reasoning was that most food products have already been processed and are no longer natural. [1]

High Fructose Corn Syrup[edit]

Products containing high fructose corn syrup may still market themselves as natural because high fructose corn syrup is derived from corn which is a natural ingredient, and no synthetic agents are in contact during manufacturing. The FDA explicitly stated that it would not restrict the use of the term "natural" except on foods that contain added color, synthetic substances, and flavors.

Organic Food Labeling[edit]

USDA verifies foods as USDA organic. Organic operations must demonstrate that they are protecting natural resources, conserving biodiversity, and using only approved substances. [4] The specific regulations can be found here. [5] "Organic” is a labeling term for food or agricultural products (“food, feed, or fiber”) that have been produced according to USDA organic regulations, which define standards that “integrate cultural, biological, and mechanical practices that foster cycling of resources, promote ecological balance, and conserve biodiversity.” USDA standards recognize four types of organic production:

  1. Crops: “Plants that are grown to be harvested as food, livestock feed, or fiber used to add nutrients to the field.”
  2. Livestock: “Animals that can be used in the production of food, fiber, or feed.”
  3. Processed/multi-ingredient products: “Items that have been handled and packaged (e.g. chopped carrots) or combined, processed, and packaged (e.g. bread or soup).”
  4. Wild crops: “Plants from a growing site that is not cultivated.”

Congress[edit]

The U.S. Congress is responsible for making laws related to natural foods, powers of the food industry, and role of the FDA in defining standards of food safety. For example, in July 2016, the Congress passed the National Bioengineered Food Disclosure Standard which required labels to identify genetically engineered food. While some labels were mandated, other foods were labeled by the manufacturers. This can be misleading for consumers. Similarly, in 1990, the Congress passed the Organic Foods Production Act to regulate and define organic food. However, organic labels were accepted in the range from 20% to 100% organically grown ingredients. With a loose definition, even the most sophisticated consumers were unsure of the exact definition of organic foods. It was only after years of various laws that properly defined and regulated organic foods. Natural foods will also most likely suffer this delay, especially due to FDA's refusal in defining the term "natural". [1]

Marketing Strategies[edit]

In the interest of generating revenues, producers have taken to natural food marketing practices that some have characterized as misleading, with a number of class action lawsuits seeking to end these tactics. [6]

Pricing Origins[edit]

The markup on natural foods can be traced to more justifiably expensive organic foods.

Organic Foods[edit]

The price premium of organic foods over conventional foods is explained by the cost of supporting investments. [7] Strict regulations require that producers follow additional procedures. Registration and certification carries an upfront cost; land must comply with minimum organic standards for three years, an expensive process given that food produced under such standards cannot yet be sold as organic during this period. [8] During certified production, if a requirement is violated, such as by cross-contamination with non-organic products or other means, the product is rendered legally non-organic and efforts involved are wasted. This risk scales with larger production batches, and so producers must take precautions to avoid it.

Despite these difficulties, producers have found success in marketing the benefits of organic foods. In 2016, sales saw 7.1% growth amidst decline in non-organic sales. [9]

Natural-Organic Connection[edit]

For producers, natural foods represent an ideal middle ground between organic and non-organic foods, owing to reduced costs and favorable public perception. Looser regulations for natural foods imply fewer investments necessary for government approval. The lack of minimum land compliance time alone indicates a much lower barrier to entry. In addition, studies found that consumers generally regard natural labeled foods nearly as highly as organic labeled foods despite significant regulatory differences. The Hartman Group observed that "organic" carries a connotation of lacking undesirable ingredients, while "natural" evokes more positive associations. [10] Prices for natural foods in America were found to be around 15% lower than organic foods, but still higher than conventional foods. [11]

Because natural foods can be priced nearly as high as organic foods while costing disproportionately less to produce, they represent a strong value proposition for producers.

Strategies[edit]

Lax regulation enables not only lower production costs, but also greater marketing liberties by exploiting technicalities and consumer preconceptions. For example, a consumer could be lead to believe that a hot dog labeled "contains 100% all-natural beef" contains only beef, but may in fact comprise other meats as well - it's only guaranteed that the beef used was raised using natural methods. Additionally, this consumer may incorrectly assume improved environmental practices and animal welfare. [12] Issues also stem from the fact that "natural" can be used as an adjective outside of regulated contexts. Claims to nature such as "contains natural goodness" are essentially meaningless, and serve only to further cloud consumer understanding of this term. [13]

Consumer Perspective[edit]

Many consumers remain unaware that the term "natural" is currently unregulated and undefined in the food industry. Due to an altruistic attitude towards natural food consumption, consumers believe natural foods are more virtuous. [14] Consumers expect that a "natural" label means that the processed food does not contain any artificial ingredients and are pure, clean, and healthy. [15]

Perceived Benefits[edit]

Despite higher prices, some consumers choose specially labeled foods for certain perceived benefits.

Quality[edit]

Consumers believe that cost is linked to food quality. Price tags seemed to awaken expectations that were sufficient to influence the resulting overall taste experience similar to a Placebo Effect. Therefore, food that cost more such as natural foods result in a more pure and rich taste.[16]

Health[edit]

Consumers who consider future consequences are more likely to consume organic food. [17]

For example, Kiczorowska et. al. surveyed a group of pregnant women and found that a majority purchase organic food infrequently. "The main motive behind buying organic food was their wish to take special care of their health during the pregnancy period and the need to take care of the family." However, they found a majority to also lack sufficient knowledge about what organic labeling entails, with 60% defining it as "natural." [18]

Environmental[edit]

Consumers believe that organic foods are better for the environment because synthetic pesticides are not used. [19]

Conventional farming not only destroys top soils and pollutes our waters, but it also emits more potent greenhouse gases such as nitrous oxide. Organic farming, on the other hand, utilizes natural ways of farming (as shown in the table below) and provides benefits to soil health and quality. Lori et al. stated that organic farming has 32% to 84% greater microbial biomass carbon, nitrogen, and fatty-acids than conventional farming. Rich microbial biomass is necessary for the health and quality of soil. Despite organic farming having 20% less yield than conventional farming, it is more beneficial for the environment. [20]

Organic vs Conventional Farming
Organic Farming Conventional Farming
Grown with natural fertilizers (manure,compost) Grown with synthetic or chemical fertilizers
Weeds are controlled naturally (crop rotation, hand weeding, and mulching) Weeds are controlled with chemical herbicides
Pests are controlled using natural methods and naturally-derived pesticides Pests are controlled with synthetic pesticides

[21]

Consumer Pushback on "Natural" Food[edit]

American adults are making marked attempts to “eat better...consume fewer calories coming from fat and saturated fat, and consume less " than they were 10 years ago. [22] Growing movements claim that the FDA should create formal definitions of "natural" which are supported by scientific backing, as opposed to allowing for the use of what many in these movement deem as misleading and/or ambiguous. The FDA and USDA are statutorily mandated to protect consumer interests in prohibiting false and misleading labeling, however both agencies have refused to formally define the term "natural". [23] FDA also refuses to determine if GMO foods should be permitted to be labeled as "natural". [24] Others assert that if the FDA cannot settle on a definition and regulatory mandate for "natural," then companies should be barred from using the term altogether. Consumers have taken it upon themselves to take action against the use of "natural" in courts or petitions if they cannot rely on the oversight of regulatory agencies to provide food manufacturers with clear and concise regulations.

TakePart[edit]

In 2015, a TakePart petition titled “Stop Confusing Consumers: Ban the ‘Natural’ Label” received over 33,000 signatures. In it, respondents urged both the FDA and the USDA to ban and/or restrict its use on food products. [25]

Court Action[edit]

Consumers hope to change the natural foods landscape by increasing the literacy about natural foods in a tangible way. However, results from court action against corporations have been mixed. Several courts have dismissed claims or "stayed the case to seek clarification from the FDA, even though the Agency repeatedly declines to intervene or further define the term". However, there have been some notable wins for consumers. In 2008, Williams vs Gerber case found that Gerber's fruit snacks which are marketed as natural likely deceived consumers by having pictures of different fruits on their packaging. This could potentially lead consumers to believe that the product contain those natural fruits and flavors. [26]

Conclusion[edit]

Viewed through the lens of balances of power, natural-labeled foods skew the consumer-producer relationship towards the latter participant. While consumers are paying nearly as much for natural labels as organic labels, the benefit received is less than expected. Lax regulations and public misconceptions allow producers to increase profits. However, growing numbers of opposing litigation point to growing awareness of these marketing tactics and return of consumer power. How regulatory agencies will respond to this movement remains to be seen, which will play a significant part in where this balance will fall.

Further work may help shed light on additional marketing techniques, as well as identify more research that focuses solely on natural foods.

References[edit]

  1. a b c Negowetti, N. E. (2014). Defining Natural Foods: The Search for a Natural Law. Regent University Law Review, 26(2), 329-365.
  2. Food and Drug Administration (2016). "Natural" on Food Labeling.
  3. MacDonald, C. (2018). Not "All Natural": Modernizing Privity to Allow Breach of Contract Claims for Mislabeled Food Products. Iowa Law Review, 103(2), 785-816.
  4. United States Department of Agriculture (2018). Organic Standards.
  5. U.S. Congress (2018). Organic Certification.
  6. Thompson S. (2014). Artificially “Natural”: Class Action Lawsuits Attack Misleading “Natural” Claims in FDA’s Absence. Indiana Law Review, 47(3), 893-918.
  7. Buck, D., Getz, C., Guthman, J. (2002, December 17). From Farm to Table: The Organic Vegetable Commodity Chain of Northern California. European Society for Rural Sociology, 37(1), 3-20.
  8. USDA. (2016, November). Making the Transition to Organic Production and Handling.
  9. Soil Association. (2017). Organic Market 2017.
  10. The Hartman Group. (2014). Organic and Natural 2014.
  11. McFadden, J. R., Huffman, W. E. (2017). Willingness-to-pay for natural, organic, and conventional foods: The effects of information and meaningful labels. Food Policy, 68, 214-232.
  12. Dominick, S. R., Fullerton, C., Widmar, N. J. O., & Wang, H. (2018). Consumer Associations with the “All Natural” Food Label. Journal of Food Products Marketing, 24(3), 249-262.
  13. Davies, M.A.P., & Wright, L.T. (1994). The Importance of Labelling Examined in Food Marketing. European Journal of Marketing, 28(2), 57-67.
  14. Taylor, Z., & Stevenson, R. J. (2018). People Believe and Behave as if Consumers of Natural Foods Are Especially Virtuous. Frontiers in Psychology, 9.
  15. Weaver, A. (2014). "Natural" Foods: Inherently Confusing. Journal of Corporation Law, 39(3), 657-674.
  16. Plassmann, H., Odoherty, J., Shiv, B., & Rangel, A. (2008). Marketing actions can modulate neural representations of experienced pleasantness. Proceedings of the National Academy of Sciences, 105(3), 1050-1054.
  17. Giudici, K. V., Baudry, J., Méjean, C., Lairon, D., Bénard, M., Hercberg, S., & Péneau, S. (2018). Association between time perspective and organic food consumption in a large sample of adults. Nutrition Journal, 17, 1-10.
  18. Kiczorowska, B., Samolinska, W., Klebaniuk, R., Kowalczuk-Vasilev, E., & Wojcik, I. (2017). Pregnant women’s attitudes towards organic food. Polish Journal of Public Health, 127(4), 159-163.
  19. Aertsens, J., Buysse, J., Huylenbroeck, G.V., Mondelaers, K., & Verbeke, W. (2011). The influence of subjective and objective knowledge on attitude, motivations and consumption of organic food. British Food Journal, 113(11), 1353-1378.
  20. Lori, M., Symnaczik, S., Mäder, P., Deyn, G. D., & Gattinger, A. (2017). Organic farming enhances soil microbial abundance and activity—A meta-analysis and meta-regression. Plos One, 12(7), 1-25.
  21. Robinson, L., Segal, J., & Segal, R. (2018, September). Organic Foods: What You Need to Know.
  22. U.S. Department of Agriculture's Economic Research Service. (2014). American Adults are Choosing Healthier Foods, Consuming Healthier Diets.
  23. Negowetti, N. E. (2014). Food Labeling Litigation: Exposing Gaps in the FDA's Resources and Regulatory Authority. Governance Studies at Brookings, 26
  24. Kux, L. (2014). Letter to Judges Gonzalez Rogers, White, and McNulty.
  25. Consumer Reports (2015). Stop Confusing Consumers: Ban the 'Natural' Label. Takeaction.takepart.com
  26. Pomeranz J. L. (2015). Litigation To Address Misleading Food Label Claims And The Role Of The State Attorneys.Center for Obesity Research and Education, Temple University}}