What attributes like “clean label” and “responsibly sourced” should mean to small CPG manufacturers

By Chelsea Stone

8 min read

July 28, 2021

How small CPG manufacturers can win over today’s conscious consumers with the product labels they’re looking for

There’s no doubt that today’s consumers are scrutinizing labels more than ever before. Shoppers are more educated about their well-being, their family’s well-being, and the well-being of the world, and they want to spend their dollars in support of sustaining that. Savvy CPG manufacturers caught wind of this years ago. Already, whole new categories have sprouted up (like greek yogurt and non-dairy milks). New retailers have proliferated to meet the demands of an increasingly demanding generation of consumers. 

 

The tide of “conscious consumption” won’t turn any time soon, so small CPG manufacturers need to take advantage of their natural proclivity for innovation and, well, innovate. So, if you’re a CPG manufacturer looking to meet your shoppers where they are: What budding product attributes should you incorporate into your next innovation cycle

 

All data from this report was compiled using the Byzzer by NielsenIQ suite of Total Wellness reports, pulled for the last 52 weeks ending 7-10-21, covering all NielsenIQ Total FMCG retailers.

 

Small brands should know: Velocity is a key metric for small CPG brands because it indicates how well a product sells where it is available. That’s why you will see velocity used as a measure of success throughout this article.

 

“Clean label” in beauty and personal care

Ten years ago, most consumers had never heard the word “parabens” or “phthalates”. But thanks to consumer education, those days are over. “Clean label” beauty is already a billion dollar industry – one online e-commerce platform for clean skincare and cosmetics, Beautycounter, was valued at $1 billion in April 2021.

 

 

What exactly does “clean label” mean? There’s no governing body that administers certifications, but what it usually refers to is the removal of certain ingredients that used to be commonplace in the cosmetics industry, such as artificial colors, ingredients, fragrances, preservatives, parabens, phthalates, sulfates, GMO ingredients, and even aluminum (yikes!). 

 

Clearly there’s a demand for cleaner products in the beauty and personal care space as this already maturing industry continues to grow at full steam. Last year saw the triumph of Tik Tok viral star indie beauty brand Urban Skin Rx, which saw a 131% increase in velocity over the past year. Likewise Ambi skin care saw an even more impressive 246% change in velocity as consumers have grown not only more educated about the health of their skin, but have also chosen to consume with greater social responsibility, in support of CPG brands founded by Black entrepreneurs (Ambi was founded by a pharmacist in Zimbabwe).  

 

Food as medicine: Sugar and casein-free diets, diabetes support and natural ingredients

We’ve already seen the explosive growth of “natural” products. Whether it’s “gentle formula” baby care, non-toxic “all natural” household cleaning products, or more humane ingredients in pet food, it’s clear that many CPG manufacturers are already finding ways to help consumers protect their health and the health of their families as thoughtfully and thoroughly as possible. 

 

Over the course of the last year, several small, healthful brands have stood out for their growth. Fresh meatless alternatives like Sweet Earth, for example, a California startup with plenty of plant-based products has seen an 81% increase in velocity since last year. Another standout is GluteNull, a line of treats that has gone above and beyond organic, vegan, gluten-free and non-GMO – they’ve satisfied niches like keto-friendly and casein-free, too. Clearly their efforts have paid off: Their casein-free product in particular grew 134% in velocity over the past year.

Excerpt from Total Wellness Report

 

So if you’re a CPG manufacturer wondering where to start with all the healthy product attributes available to you, consider this snippet from Byzzer by NielsenIQ’s Product Insight Price Impact report. In this example above, we looked at prepackaged cookies, pies and cakes to see which attribute had the largest positive impact on price. Even out of those attributes that vary little in terms of actual product ingredients – ketogenic, low carbohydrate, low and no sugar diets – the impact on price is dramatically different. Keto far out-prices (5.5%) low (2.1%) and no (2.0%) sugar diets, once again proving that the label a CPG manufacturer chooses matters – a lot.

 

Responsibly & sustainably sourced for humane, cruelty-free products

As climate change and adjacent issues like overfishing reach a mainstream audience, consumer habits change. Frozen fish as a consumption category has changed significantly, with a 20% increase in “sustainably sourced” products in this category alone. Seafood brand Regal Springs has grown an incredible 1000%+ in velocity over the past year, while premium sustainable frozen seafood retailer and brand Wixter has seen an impressive 565% increase in velocity in their sustainably sourced frozen fish products.

 

While fish may be the obvious category when it comes to sustainability and environmental responsibility, it’s interesting to observe the ways that consumers’ growing concern over sustainability has influenced other categories. While labels like “humane” and “cruelty-free” may not directly impact the quality of a product, increasingly conscious consumers want to buy products they can trust are low-impact and caused no harm in their making.

 

Innovative up-and-comer LA Colors topped the charts in our recent Indie Beauty Brands report

 

Facial cosmetics, for example, may have taken a dip thanks to the pandemic, but since February we can see the bouncing back of those brands boasting a humane certification. LA Colors is one such indie beauty brand that has captured the hearts of Gen Z consumers around the country, proudly claiming the title of “100% cruelty-free” – and their strategy is clearly working as the brand tops the ranks of indie beauty brands.

 

Recycled packaging, zero waste and carbon zero consumption

The desire to avoid plastic packaging and achieve a “zero waste” or “carbon neutral” lifestyle is not new – it’s been a hot topic among CPG manufacturers for many years already. The difference is: more and more of today’s consumers are demanding sustainability in their product packaging. 

 

Excerpt from Total Wellness report

 

The popularity of sustainable packaging has not spread at an even rate around the country, though. That’s why we took a look at Byzzer by NielsenIQ’s Product Insight by Regional Demand report to see how consumer preferences vary across markets.

 

In the example above, we can see that Midwest is leading the country in eco-conscious consumers – attributes like Plastic Free, 100% Recycled, Eco Friendly, and Reusable Packaging are selling strong in Midwest FMCG retailers.  

 

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This is a mere fraction of the options available to CPG manufacturers looking to incorporate more healthful, conscious, or environmentally-friendly features into their next innovation cycle. 

 

With so many options to consider, narrow down your options using straightforward data. Byzzer by NielsenIQ’s suite of 5 simple reports will tell you:

  • Which attributes command the highest everyday price
  • Which brands are succeeding for particular attributes
  • Which attributes are growing the fastest
  • How the sales of products with particular attributes vary by market, region and state

 

You’ll get the full picture of the category so you can make an informed decision – and you don’t have to be an analyst to run or read these reports. Just get the metrics you need to build the product you want – and your consumers will love.

 

 

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