CPGmatters: Nutritional Labeling Provides CPGs, Retailers with Unique Competitive Edge
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Manufacturers can gain a competitive advantage by working with nutritional ranking systems, especially those that provide information to shoppers at the point of purchase. The new systems seek to simplify this data, while maintaining the credibility of sound fact-based nutritional advice.
NuVal ranks supermarket products on a 1 to 100 scale based on nutritional information presented in on-pack labels, and after a proprietary analysis. The NuVal score is presented on the shelf label next to the price in retailer chains paying a licensing fee. The higher the score, the more nutritious the food. Competitive programs are Guiding Stars and Smart Choices.
NuVal, LLC is a joint venture formed in 2008 by supermarket cooperative Topco Associates, Skokie, Ill., and Griffin Hospital of Derby, Conn., a non-profit community hospital, and home to the Yale-Griffin Prevention Research Center. While NuVal is still a new company - it started in 2008, and went into its first two chains, Price Chopper and Hy-Vee, in January 2009 - manufacturer acceptance has been good, says Robert Keane, spokesman for NuVal in Braintree, Mass. It added Meijer later in 2009, and will launch in United Supermarkets (Lubbock, Texas) this month.
In most cases, NuVal obtains the information it needs to evaluate products on store shelves from nutrition fact panels and nutrition labels, "the way everybody else does," he notes. "The manufacturers aren't sending us anything. Part of what makes NuVal important is we are independent of food manufacturers."
Late last month, the American Journal of Clinical Nutrition published a study endorsing key parts of NuVal scoring. For example, the study found that higher-scored items in the NuVal system correspond to the DASH, or Dietary Approaches to Stop Hypertension diet. The study also found that NuVal's 100-point scale was preferred to other four-tier systems by a ratio of three to one.
The company has set scores on over 41,000 items so far in about 160 categories.
"The way scoring happens, we take down all the information - the nutrition fact panels, and the nutrition labels - to make sure we get an absolutely accurate score. At that point we inform all manufacturers of the scores their products have received and sometimes they will have questions. There have been times where some manufacturers have sought to increase their score," Mr. Keane says.
After signing a non-disclosure agreement to protect NuVal's proprietary ONQI algorithm, "we can go through with them and explain why their product scored the way it did." This may result in a change in ingredients or formulation, and the products are then re-scored.
"But the score itself is done completely independently, which we think is important to gain customer trust," Mr. Keane adds.
The recent news that the U.S. Food and Drug Administration (FDA) is devising its own on-pack nutritional labeling has poured cold water on some programs like this. But NuVal is proceeding, while keeping an eye on what FDA comes up with.
"If anything, [the FDA plan] brings the whole idea of nutritional labeling into the spotlight. It shows that people are really looking for this kind of guidance," he adds.
Discussion Questions: Should food retailers be investing in independently-run nutritional ranking systems like NuVal rather than those being run by the industry or the government? Do you think consumers will respond better to a 100-point scale versus a four-tier nutrition ranking system?