Kalsec tracks consumer label preferences as they relate to the macro trend for clean label. In 2017, Kalsec conducted U.S.-based research to better understand consumer opinions about perceived differences between ingredients on labels.1 We found that naturally sourced ingredients are increasing in popularity when compared to more chemically derived ingredients. Given the increase in expectation of transparency in food processes, we predicted that these trends would continue while the number of individuals with a preference would increase.
In 2018, we expanded our research to a global audience that included Asia-Pacific and European regions.2 This research can help food manufacturers better understand their target audience and the nuanced definitions of clean label through consumer ingredient preferences. Clean label attributes are often expected in many food categories, while clear label attributes are becoming an aspiration for some consumers. Read the full research and learn about the evolution from clean label expectations to clear label aspirations here.
Millennial vs. Baby Boomer
Food production in the U.S. is over a $1 trillion industry as of 2018.3 The millennial generation has assimilated into the workforce and is continuing to gain financial independence, so purchase decisions on both the consumer and commercial level are shifting. The number of millennials is projected to have surpassed that of baby boomers; however, the peak of millennial buying power is expected around 20364, which is still over a decade away. This means that it is crucial for food manufacturers to understand this consumer segment as they continue to gain market share without ignoring preferences of the Generation X and baby boomer generations.
Per the end of year 2018 Consumer Expenditure Survey, millennial-aged consumers were about 23.5% of the buying power within the food industry, a gain of 3% share since 2015. The baby boomer generation accounted for over 33% of aggregated food expenditures, about equal to the Gen X share.
Percentage Distribution of $1 Trillion Expenditures
Source: Consumer Expenditures Survey (CEX)
For food manufacturers, understanding labeling preferences based upon target audience is key. Overall, naturally sourced ingredients are preferred for both baby boomers and millennials, while millennials are progressing towards more transparency and specific ingredient descriptions.
Naturally Sourced vs. Synthetic Ingredient Labeling
Tertiary Butylhydroquinone, or TBHQ, is a chemical preservative used in food products to extend shelf life. In 2017, Kalsec conducted a survey asking consumers their ingredient label preference between ‘natural flavor’ or ‘TBHQ.’ Half of consumers indicated a preference for a particular ingredient. Of those stating a preference, nine out of 10 chose ‘natural flavor’ over ‘TBHQ.’ Since such a large percentage of consumers have a preference, it is important to note that a strong opinion base may significantly sway purchasing trends.
While most consumers preferred naturally sourced options versus having no preference, the millennial generation significantly exceeded the average, forecasting a future growth of these sentiments.5
Rosemary Extract vs. Natural Flavor
Understanding that all other factors being equal, consumers prefer labels with less complicated and chemical-sounding ingredients. We wanted to explore the importance of ingredient naming and transparency on a label from a consumer’s perspective.
In our 2017 survey, consumers were asked their labeling preference for the same ingredient, ‘rosemary extract’ or ‘natural flavor.’ Of millennial consumers who have a preference, almost two-thirds selected ‘rosemary extract’ over ‘natural flavor’ as the desired ingredient label. Millennials were the only generation for whom ‘rosemary extract’ dominated over the ‘no-preference’ option.
While all other generations selected ‘no preference’ most frequently in 2017, the selection of ‘rosemary extract’ was higher than that of ‘natural flavor’ for those stating a preference. However, our 2018 research found that all generations were more similar with each other in their preferences, showing alignment between generations.
In 2018, we also found that there is a higher preference for natural flavor rather than rosemary extract within the U.S. Globally, three out of four consumers preferred rosemary extract over natural flavor. These strong sentiments indicate that label preferences depend largely on the consumer and their perception.
1. Kalsec conducted online surveys in 2017 of over 2,000 U.S. consumers ages 18 and over.
2. Kalsec conducted online surveys in 2018 in Australia, Brazil, Canada, China, France, Germany, India, Italy, Mexico, Thailand, the United Kingdom and the United States with 500 consumers from each country ages 18 and over.
3. Consumer Expenditures Survey (CEX). (2019, September 10). Retrieved from https://www.bls.gov/cex/tables.htm For CEX data, Millennials are defined as born in 1981 or later, Gen X are defined as born between 1965-1980, Baby Boomers are defined as born between 1946-1964, and the Silent Generation as data combined for consumers born in 1945 or earlier. As of 2018, the Millennial definition includes some Gen Z data. However, as Gen Z is generally referred to as anyone born in or after 1996, the oldest Gen Z consumers were 22 years old and therefore a minor influence on the aggregated expenditures.
4. Fry, R. (2018, March 1). Millennials expected to outnumber Boomers in 2019. Retrieved from https://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/
5. For Kalsec consumer research results, we assumed Millennials refers to U.S. consumers, ages 18-34 at the time of the survey. Gen X refers to consumers ages 35-54, and Baby Boomers refers to the 55 and older ages.