Authored by Natasha Telles D’Costa, APAC Director of Strategy, F&B at Veeva
Emily Dickinson famously wrote “Tell the truth but let it slant”. This seems to be the prevailing strategy for advertising and product claims in today’s food industry.
It’s been a hard few years for the world, and the APAC region has been no exception. Between an already nutrient-deficit population, supply chain challenges, and limited access to food, over 50 million people have been pushed into poverty in the region.
Food safety and security continue to be pipe dreams as the region struggles with contamination scandals such as the recent seafood mislabelling fraud in Singapore. And as the industry tries to find a solution to food fraud, a problem that is costing an estimated $15B a year, a new concern is gaining ground.
Move over deliberate food adulteration and contamination, because another form of fraud is here to polarise the sector and burden already anxious consumers – greenwashing.
In 2021 the EU commission conducted a screening exercise to reveal that 42% of claims examined were exaggerated, false or deceptive. This has led to the introduction of “green claims” regulation. Further legislation will be forthcoming across the world as regulatory bodies aim to rein in vague claims that confuse consumers and even lead to fraud as organisations begin to procure green loans on the basis of these claims.
It is therefore imperative that food organisations begin to invest in claims management and assurance. These are important both in terms of protecting their brand equity and reputations, but also as a risk mitigation strategy as omnichannel business models continue to thrive.
As global supply chains continue to get more complex and formats and distribution models go omnichannel, managing an organisation’s claims and their credibility is a mammoth task. But while complicated, it has never been more important to ensure its robustness and gain consumer trust, especially in a rising cost of living crisis. Consumers today are investing in every item in their grocery basket and products need to earn the privilege to be in there.
Greenwashing: A troubling history of misleading claims
In a region riddled with the double challenge of food insecurity and inflation, the need to ensure the safety of its food has never been more pressing. Greenwashing is a broad-brush term for implying via different marketing channels that a product is healthy or environmentally friendly. The product may be neither.
With the rise of green and blue financing options tied to sustainability goals within the food industry, the stakes are now the highest they have ever been. This poses a worrying precedent as not only will greenwashing erode consumer trust, but it threatens to undermine genuine sustainability efforts within the industry.
Product and advertising claims that fall under greenwashing usually include implications rather than direct claims that would require substantiation. Broadly these fit into three major categories:
Selling the green dream: This includes the use of idyllic and deceptive nature or natural-related elements and images. The slow global progress to effectively regulate health claims has allowed brands to use phrases such as ‘natural’, ‘green’ ‘eco-friendly’ etc. few if any limits. These words have little substantiation and mislead consumers. Global research suggests that over a third of the environmental claims currently being made cannot be verified. Another angle is to use ‘green’ packaging to indicate a healthier option. Indeed the use of less glossy packaging for potato chips creating the impression that the contents were healthier has been a long standing neuromarketing technique.
Selling the illusion of a scientific approach: Another example is using scientific names to describe common ingredients designed to impress and confuse consumers. At best these strategies confuse and at worst they fabricate facts. For instance, brands could choose to put a picture of a heart on a product rather than invest in research that proves it is heart healthy.
The story of the “lesser evil “: As climate change evidence becomes prolific and consumers face information overload, brands are choosing to use the narrative of lesser evils. For instance, the term organic and sustainable are often used interchangeably when this is incorrect. Organic farming systems themselves generate significant plastic waste and have a much larger production footprint due to the inefficiency created by a lack of chemical use. Sustainable production systems (agricultural production without harm to environment, biodiversity, and crop quality) are therefore a much more holistic way of evaluating a food’s environmental impact, as opposed to just an expensive organic tag.
Three investments F&B market leaders are making to avoid greenwashing (and preserve consumer trust)
Growing legislative requirements like the EU deforestation law, Singapore’s newly instated beverage grading laws, and Thailand’s potential salt reduction targets, will drive further sophistication in this space. However, as was the case with food safety and quality in the region, industry will have to lead governments.
The need for credibility has never been more pressing as food crime rates soar. In 2022 the WHO estimated that US$ 110 billion is lost each year in productivity and medical expenses resulting from unsafe food in low- and middle-income countries, which make up the bulk of the APAC region. There are however key investments market leaders are making to assure wary consumers that they are being truthful in their green claims.
- Invest in certifications: Sustainable palm oil, organic, and fair trade certifications, are examples of recognised third party certifications that companies are investing in to gain credibility with consumers. Because these certifications are often expensive and capital intensive for small holders, this is an area where large global suppliers and manufacturers can help advance the industry by providing access and support to small holders and bring them on the journey towards more sustainable food systems.
- Invest in information, not illusion: A little knowledge is a dangerous thing. This strongly resonates in agrifood sectors, where manufactures have been vilified based on partial information. Combatting this narrative will take a combination of a change of process, upskilling suppliers on better practices, as well as changing the narrative to better inform consumers about the choices at hand. The dairy sector is a particular example as it aims to create more value from shrinking milk pools – the focus needs to be on developing the sustainability of the dairy process rather than vilification of the product.
- Traceability for all: Consumers are no longer willing to allow brands to get away with “passing the buck”. Food manufacturers need to maintain and own their supply chains to ensure that ingredient claims are substantiated and credible. Traceability will drive food safety and become synonymous with a trusted safe supply network. This is especially true in countries like China, where consumers have been found to be willing to pay up to 20 per cent more for the peace of mind that comes with assurance of the traceability, and thereby safety, of their food.
Misconceptions, misinformation and dare we say it – even disinformation – thrive in vacuums. Manufacturers will need to not just provide buzz words but credibility for their advertising and product claims if consumer trust and premium value are the goal.
Taking action: Modernising claims management
Safe food is a privilege and one that is not taken lightly – words to live by in APAC! Manufacturers need to align their supply chains to ensure that claims management is robust and transparent. As sustainability and health claims begin to overlap, it will be increasingly important to ensure that these processes are interlinked and verifiable.
Now is the time to find solution partners with access to agile, innovative and culturally competent technologies that can be co-innovated with to access across the supply chain. Enterprise solutions have the power to manage operational risks, but also provide insight into claims placing, success and ingredient access to name a few. Such insight will not only inform the regulatory arms of corporations but also marketing and innovation departments.
Contact Veeva to discuss how our claims solution can ensure management and assurance of your product claims and statements, and enable relevant sustainability conversations to happen at a truly organisational level.
About the Author
Natasha Telles D’costa is the APAC director of strategy for F&B at Veeva Systems. D’costa has spent the majority of her career advocating for a food and fibre industry that is insight driven as opposed to trend based. She is a strong advocate of the belief that ” consumers buy concepts not products” and that cultural competence is a key factor in APAC markets to drive these narratives. Indeed, the APAC region is uniquely positioned to capitalise on this to drive innovation, as long as we invest in the right forms of assurance and credibility.
Prior to Veeva D’costa headed the APAC Nutrition consulting arm of a management consulting firm and also held senior roles in the New Zealand government.