The FDA has finalized changes to the Nutrition Facts label (NFL) which will have a sweeping impact on every single food manufacturer, retailer and distributor in the US. Food imported will also need to meet these requirements. Every package of food sold in the US, regardless of distribution channel, will require a new Nutrition Facts label.
The new format is driving fundamental changes to the way in which nutritional information is being conveyed to consumers. These are the most dramatic changes to nutrition policy in over 20 years. The changes come at a time when health and wellness is evolving as a driver of consumer purchasing decisions with demand increasing for more transparency.
Major stipulations of the finalized regulations include the following:
- Revised format which highlights calories and servings
- Focus on serving size that better reflects amounts that people commonly consume
- “Dual column” labels for packages containing products that could be consumed in one sitting or multiple sittings to indicate both “per serving” and “per package” calorie and nutrition information
- Added sugars to be included with the percent Daily Value (%DV)
- Updated Daily Values for several nutrients including fat, carbohydrate, sodium and dietary fiber
- Actual gram amount for calcium, iron, vitamin D and potassium in addition to %DV
- Listing vitamins A and C is no longer mandatory but can be included voluntarily
- Listing “Calories from Fat” is no longer permitted
- Revised footnote to better explain the %DV
The new format can be implemented as early as July 26, 2016. All affected food product labels must be 100% compliant no later than July 26, 2018. Manufacturers with less than $10 million in annual food sales have until July 26, 2019 to comply.
How do the changes to the Nutrition Facts label impact on private brands?
The new Nutrition Facts label regulations will have widespread impact across the private label industry and will require retailers who own and manage these products to evaluate their formulas and packaging to plan for compliance.
The addition of added sugars, vitamin D and potassium along with revised Daily Values for fat, carbohydrate, sodium, dietary fiber and several other nutrients calls for a completely new nutrition analysis for every product – even if the formula and serving size remain the same. Format changes are also required to meet the new label specifications.
What is the impact if label changes are not acted upon?
The FDA required changes to the NFL are mandatory and time sensitive. Non-compliance by the stated deadline will require removal of products from shelf which will result in:
- Cost for removing products
- Loss of sales
- Damage to brand reputation
- Loss of brand equity
- Acquisition cost to bring consumers back to the brand
Where to begin within a portfolio of private brand products?
For retailers, the top priority should be to quickly identify what is required to drive change required by the new NFL rules, allowing them to:
- Implement change effectively while successfully scaling this initiative
- Implement change within the required timeline
- Minimize cost
- Identify the resource required to comply
- Reduce risk of non-compliance
The process of compliance within this very limited implementation window will require a thorough execution plan. The plan should include decision making criteria, resource needed, and the technology required in order to control complexity and cost. In addition, it is imperative that the plan should aim to utilize supply chain partners using effective engagement processes.
The ideal process will only touch each package once with the goal being to execute one design change for each package. Every touch point must count.
In order to plan and execute label transition decisions, retailers need to understand the scale of risk within their entire portfolio of private brand products.
The first step in preparing for the transition is to conduct an impact analysis.
1. What is the impact of the new NFL requirements on each product relating to:
- Label size
- Nutrient declarations
- Nutrient content claims
- Serving size
- Amount of added sugars
- Dual column format
2. How do the changes impact the current source of supply?
3. What behavioral changes might the new NFLs cause among consumers that purchase the brand?
Carrying out an impact analysis will provide the facts needed to create a phased transition plan across an entire line of products. This categorical approach will highlight missing information, a process which is essential for planning the execution of changes and scheduling any re-labeling, re-packaging and reformulating efforts.
We experienced similar challenges in Europe with changes to FIR – the Food Information Regulation - which required all suppliers to have understood the regulation and updated their product information and packaging accordingly – or the products would be removed from the shelves.
These changes were material in a way similar to those required for NFL and they required the packaging on almost all private brand products to be overhauled. Supplier engagement was key to supporting retailers to effect this change.
Do you need assistance to ensure you reach compliance with 100% accurate labels? We can help with the full process towards label compliance or simply support you to access the information that you require via our data collection solution.
In summary, the proposed changes to the Nutrition Facts label should be a strategic priority for private brand retailers. Waiting to start this initiative is not an option.