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Produce Business

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American Food & Ag Exporter

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WHAT IS IN A LABEL?
Does Promoting No-GMOs Impact Perception Of The Rest Of The Department? 
Would A Positive Message Smell As Sweet?
St. Joe’s John Stanton To Address The London Produce Show And Conference

Jim Prevor’s Perishable Pundit, June 6, 2016

Among those at The London Produce Show and Conference for the third year in a row will be Jim Allen, President/CEO of The New York Apple Association and is the vice chairman of the US Apple Export Council (USAEC) after having served three times as chairman.  Maybe he keeps coming back because he finds it helpful in his drive to help New York and the USA to sell more apples overseas, but surely it also helps that we have quite the speaker program.

It was way back before the first edition of The New York Produce Show and Conference when we ran a piece announcing that Dr. John Stanton of Saint Joseph University would be presenting. Almost immediately Jim Allen sent us this note:

With great excitement and anticipation, I await The New York Produce Show and Conference and the presentation on Local Preference Versus Organic, by Dr. Stanton.

John Stanton, undoubtedly in my book, is one of the best, if not the best authority on consumer behavior when it comes to purchasing foods and produce.

He continues to “Delight” his audiences with thought-provoking data, information and advice on how to reach consumers in a way that will influence their purchase decisions. Time after time, Dr. Stanton has identified consumer traits that if properly applied in marketing, will end in success!

His presence, along with the other outstanding presenters at the New York Produce Show, is certainly worth the registration fee alone, while the excitement of the show will be a bonus!

— Jim Allen
President
New York Apple Association, Inc.
Fishers, New York

John Stanton has often spoken at The New York Produce Show and Conference and The London Produce Show and Conference, giving presentations we previewed with pieces such as these:

Research To Be Unveiled At The New York Produce Show And Conference Shows ‘Local’ Preference Versus Organic

Pundit Mailbag — Professor John Stanton’s Presentation At New York Produce Show And Conference ‘Worth The Registration Fee Alone’

Branding And In-Store Marketing: Perfect Together... St. Joseph’s Superstar Professor John Stanton To Present At London Produce Show And Conference 

Bringing Produce To New Markets: Opportunities And Obstacles In The New Retail Environment... St. Joseph Food Marketing Guru John Stanton Gives Featured Presentation At The New York Produce Show And Conference

Now he is ready to unveil the results of his latest research into labeling, with a twist: What happens to consumer perception when we start adding negatives to our labels — things such as “No GMOs” — does that make consumers think better of the product or worse? How does it impact perception of the rest of the products in the category, department or store?

We asked Pundit Investigator and Special Projects Editor Mira Slott to find out more:

Dr. John Stanton
Professor and Chairman
Food Marketing Department
Saint Joseph’s University
Philadelphia, Pennsylvania

Q: Every year, whether you are presenting at The New York Produce Show or The London Produce Show, your lively, engaging speaking style and fascinating research keep attendees on the edges of their seats. Your 2015 London talk on Branding and In-Store Marketing sparked the best interactive Q&A session. You never shy away from industry “tough love” when your study results show areas in need of industry improvement.  Will this year’s talk continue in that vein?

A: My talk will examine how different packaging statements and label claims significantly impact consumer purchase decisions. An important finding in the research shows that when companies put negative label claims, such as no pesticides, or no GMO’s on certain products, it negatively effects consumer perceptions of the whole category and adversely influences the intention to buy.  

Q: Isn’t that a trend occurring across many food categories in marketing and packaging to differentiate items on retail shelves?

A: I believe the food industry is shooting itself in the foot when they insist on ‘no this’ and ‘no that’ in our foods. Consumers don’t seem sophisticated enough to evaluate the negatives.  

Q: OK. That confirms this year’s session will continue in your thought-provoking, ‘tell it like it is’ genre. What triggered your study?

A: The research was prompted while I was studying the category of milk. The category has been declining for years, and we were trying to analyze the reasons why.  The manufacturers and processors were putting more and more negative labels on milk compared to positive ones, such as “no hormones” versus “builds strong bones.” This phenomenon appeared to be happening in other food categories as well. In the case of produce, “no pesticides” versus “high in a vitamin or mineral,” for instance. 

The project came about because we wanted to explore the difference in people’s perceptions of these labeling strategies in aided and unaided environments. Unaided means we simply ask study participants to just talk to us about different products; milk was the main one, and apples and tomatoes secondary.

We said to people, ‘Tell us about milk or apples or tomatoes,’ and when they sat there and actually talked about the products, most everything they said was positive. We then wanted to see what would happen if we introduced product labels with negative claims.  It’s kind of important to know, we followed a specific scientific method.  We created labels both of the positive and negative claims using a technique called discrete choice experimentation.

Q: How does discrete choice experimentation work?

A: This method systematically places combinations of claims on a variety of labels asking consumers to choose which of the labels is most likely to increase their intention to buy. From this data, we can calculate how much influence each of the claims has on the intention to buy.

Q: And what did you glean from that?

A: The results showed that negative claims had the most significant impact on intention to buy when placed on a label. However, when consumers are in an unaided situation, these negative claims are hardly ever mentioned.  A hypothesis is people are really concerned about these negative claims -- pesticides, herbicides, GMOs, etc. In order to test whether the concern is just simply a negative statement about the product or really the negative claim, we did two additional tests.

One, we created labels that had no relationship to the product in the test. For example, when doing the test with dairy, we said the product had no acrylamides.  Acrylamides have no association to dairy at all. However, given a similar test, the products that had “no acrylamides” labels had a negative effect on consumers’ intention to buy.

Q:  What are acrylamides?

A: That’s the whole point!  We did another test with an invented chemical sounding name with no meaning whatsoever, and placed it on the label with a negative claim. It was a made up word, and again we found those non-existing chemicals also had a negative impact on intention to buy.

Q: Would that steer them to another milk brand, or outside of the category to a milk substitute like soy milk or juice?

A: We didn’t ask them those questions because they were just picking labels.  Let me tell you what we did do, and this was just for milk.  Milk was on a steady decline going down. However, in the year they introduced on the label ‘no hormones,’ the change in the slope became much steeper.

Milk sales are going down for a lot of reasons, so we would expect no matter what we put on the label, milk sales would continue to decrease; people are not eating cereal in the morning, they’re not eating breakfast at all, etc.  But in the year they started putting on the no-hormones label, the sales started decreasing even faster.

Our hypothesis is: You walk in the store to the milk section and some milk has hormones and some doesn’t. I think I’ll buy the almond milk. We think when you have two products and tell consumers this product has none of these things in it, the implication is all your other products have it.

Q: That sounds problematic then when major manufacturers are jumping on the no this, no that, bandwagon…

A: When General Mills came out with no GMOS in Cheerios, and they made it a big deal, they must have thought GMOs were bad or why put that on the label. So in doing that, what does it say about all the other foods they make? They are demeaning the very products that make the most money for them.

One more example… there’s a small business called Tasty Baking Company, in Philadelphia, Pennsylvania, with the brand TastyKake.  They wanted to jump into the health market, so they made a sweet snack cake that apparently was supposed to be healthier for you. They called this new line the Sensables. Did that mean the rest of their product lines were non-sensible?  That’s the idea about shooting yourself in the foot.

Q: Could you translate this problem to the produce industry? For instance, could organic fresh fruit and vegetable claims imply dangers in their conventional counterparts and denigrate the whole produce category?

A: I think it’s absolutely parallel. Any time you speak of parts of your product line as better because it doesn’t have something in it, it demeans the other products. What else can a consumer think? This is pesticide-free, so does that mean the other products are all filled with pesticides?

The thing that’s not logical for the food industry is it’s my opinion that most of these concerns -- no pesticides, no-GMOs, etc. — are not calls from the major part of the market. They’re calls from a very loud niche part of the market, and because those segments are growing faster, all the food industries get distracted by the growth and lose track of doing a great job of marketing the product categories that generate the most sales. For instance, organic produce is a relatively small percentage of the total produce market in the U.S., and it is even smaller in the UK…

At another time, we did some research on apples. The study looked at consumer perceptions of local versus organic. We created scenarios using this discrete choice experimentation. Local beat organic by five times.

Q:  Yet consumer perceptions of local and organic often are not based on the facts. Doesn’t this connect back to the consumer confusion you discovered with negative labeling claims?

A: No doubt about that.  Part of our labeling study was quantitative, but we also did some focus groups. One of those areas was on GMOs, and the participants had no idea what that means. But as soon as you put on your label no GMOs or GMO-free, which is the equivalent, they must not be good for you. I don’t know what they are, but why would the company go to so much trouble to tell me it isn’t in there if it doesn’t mean anything? I don’t need to know what it is to have that claim or chemical… whatever it is will affect me.  

Q: What labeling strategies and messaging work best? What is the right thing to do?

A: One of the things we have to do is admit to ourselves that produce and our food products in general, are some of the most nutritious, tastiest, cheapest and healthiest food in the world. And we have to stop pandering to a small group of people who pick at many of the issues that don’t seem to be in the public interest or public awareness level. We have to keep talking about how good our product is, not the negative things about our product.

As part of the label experiment, a variety of claims were included in the analysis. These claims included sustainability, nutrient content, production, quality/ freshness, structure/function, health and taste. Let me give you the method. It’s really complicated... If you have 20 different claims you want to put on a label, you have to create thousands of labels, because each label has to have every possible combination of claims. Part of the method allows you to only show each consumer a very small number of those labels and by following this method, each person only has to evaluate three or four labels but in reality you get to measure the impact as it relates to all the people.

Q: How many people participated in the study?

A: Roughly 2,000 people. In order to use this technique you need a lot of people. We used an online panel.

Q: What types of labels had the greatest influence on consumers’ intent to buy?

A: For milk, building strong bones had a more positive impact on intention to buy than the specification of the nutrient itself such as high in calcium. I’ve done all sorts of research over years, which reinforces this point. I studied it in mushrooms, unrelated to this labeling research, so I don’t want to get the audience confused. But it may be of interest.

One of the things we discovered five years ago is that the more a nutrient is known and recognized, like Vitamin C, the less important it is to give the attributes. However, as you get the nutrients that are not well recognized, it’s much more important to specify what the benefits are.  Mushrooms are high in mineral called selenium, but very few people know what selenium is. If you say mushrooms are high in selenium, in at least half of the cases, that was viewed as negative. Instead, it’s better to say, rich in the nutrients that reduce cancer. It has to do with the better well-known the nutrient, the less important it is to specify.  Everyone knows bananas are high in potassium and that’s related to blood pressure.

Q: What’s your critique of produce department labeling?  

A: In general, I really chide the produce industry for not using signage and labels effectively. The only sign you’ll see with the asparagus is a sign that says asparagus. You use this valuable space to tell consumers the one thing they already know.  

Let’s just say you highlight that asparagus is very rich in a particular nutrient to help build your immune system. Eventually you will create a positive response to asparagus in addition to how good it tastes. You don’t have to have the person buy the asparagus every time, but they keep walking by that labeling and the message sinks in. The thing amazing to me is all the processed foods manufacturers spend millions and millions of dollars creating packaging and labeling so they must think it works.  

Q: Now there is such a deluge of product claims, it can be perplexing. What is your view of the increased push for legislation on GMO ingredient labeling?  

A: That’s independent of this. Whatever the regulation, you have to comply with the law. As companies put more and more negative things on labels that aren’t legislated like no GMO’s, you’re suddenly going to have states like Vermont getting involved in this.  As soon as General Mills started placing GMO-free on its boxes of Cheerios, it raised the question: what does it mean for a product to be GMO-free, does every product need to be GMO-free? Does five percent of the product need to be GMO free? When making ice cream, does the half of a percent of vanilla bean you use need to be GMO-free?  Can you imagine if no one put anything on their label about GMOs? You would probably have a small group of people complaining about GMOs, and it wouldn’t be worth it for the government to be concerned about it.

Q: I seem to have side-tracked you from the focus of your talk!

A: That’s OK. These issues all connect. For my talk, the key discoveries I’ll be sharing are:

1) In an unaided setting, consumers generally think positively of our foods.

2) When presented with labels with negative claims, those negative claims have more impact on the consumer than the positive beliefs.

3) Not only can the negative claims influence the specific product but they can also cast dispersion on the entire category.

Q: How important is the specific phrasing of the statement on the label?

A: Very important when you put on the label what the product is really about. For example, ‘all natural’ basically means no artificial ingredients. But when you put no artificial ingredients on the label, it has a much more negative impact than if you put all natural, even though it basically means the same thing. When you state something in the negative, it has a bigger negative impact.

Our test was ‘all natural’ versus ‘no artificial ingredients.’  When you place it in the form of a no, it has negative impact on intention to buy. When you put ‘all natural,’ on it, it has a positive intention to buy, but the no artificial ingredients has a much greater negative effect than the all natural’s positive effect. It’s because we’re telling people we have bad things in our products.

Q: It seems like a relatively easy problem to fix-- just by changing the phrasing of a label, you could significantly impact consumers’ intent to buy your product, and also influence the perception of the category. Extrapolated, you could boost sales of the entire produce department…

A:  The produce department needs to start using labels to talk positively about our products.  

Q: Do you think your study results would differ if you conducted the research in the UK or other countries?

A: We have no reason to believe there would be a significant difference with UK or European consumers. It could be interesting to expand our research internationally. I’m not a research house, and we use graduate students, so it’s worth noting we could do this fairly inexpensively if there is interest. 

*****

It is an axiom of marketing that one sells benefits, not features. So even positive declarations, such a being rich in a particular nutrient, are not likely to be as effective as positive benefit claims, such as the ability to reduce the risk of heart disease. However, there are a lot of legal restrictions as to what kind of health claims can actually be made.

This study points to an important lesson, though, which is that most supermarkets do not do the kind of research to allow them to really evaluate the impact of their own promotional decisions.

We ran a piece: WHERE'S THE SCIENCE? Wegmans Asserts Organic Produce Tastes Better Than Conventional.... Doesn’t This Imply Disparagement Of Most Of The Produce Wegmans Sells? In this, we questioned whether it was appropriate for a retailer to disparage most of the products sold in its store by making claims for which there was no real evidence about organics. Now Professor Stanton raises the ante and finds that doing so may not even help your business.

It will be quite a robust discussion in London!

Join us at The London Produce Show and Conference; you can register here.

And book a hotel room here.

For more information on the event, check out the website here.

Be part of the debate or, as we say, join the conversation, #CelebrateFresh!

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