Eco-Labels: Are They Right for You?

Consumers look to eco-labels to provide them with product information. In today's retailing, we are finding more and more savvy shoppers who have individual concerns about the type and source of food products that they purchase. They want to know where the product came from and whether it's organic, irradiated, genetically modified, natural, tested on animals. They are educated and astute enough to ask plenty of questions. How might eco-labels fit into your store, and how might they assist your customers?

Store brands

Many stores are creating their own brand name labels. These may be used on specific items or lines of products that are packaged or processed on site or that may be processed at another facility. Such labels offer consumers the choice of buying a brand that has name recognition and a direct relationship with the store. This sort of label should be meaningful, especially to retail cooperative members, since it identifies a product with which the member feels ownership. Retail stores may market their own brands by indicating that they offer a way for consumers to identify products that reflect the business' principles as well as their own. Store brand labels might include labels on canned or otherwise processed foods as well as deli and bakery items. Today's pesto may be "locally grown and organic," the salsa "made fresh in the store from local farm produce," and the canned green beans may carry a store brand label.

Informative labels

Some eco-labels are created to provide information about the production and handling of the product itself. This kind of label may offer "positive" or "negative" claims. Consumers find this kind of label to be helpful, especially if they have specific individual needs or concerns regarding the products they buy. These labels need to be truthful, since there are labeling laws in most states that will address fraud quite actively.

Examples of positive label claims include: "Environmentally Sound," "Humane Treatment of Animals," "Socially Just (e.g., "living wage" or "fair trade")," "Promotes Health" "Locally Grown." Negative label claims include: " No BGH (or MSG or GMOs)," "Not Tested on Animals," or any label that points out the lack of a material or practice in a product.

Eco-labels will become more important as questions arise about production methods, social justice, and product composition.

Another example of an informative label is the "organic" label. The term "organic" on a product attests to the methods of production and handling used. Although its legal definition is broad, the organic label is widely recognized and a fine model of a regulated label. Most consumers have a general idea of what organic means even if they haven't read the entire regulation.

All that said, it is always wise to be sure consumers are educated about what the labels mean. Since there is not much room on labels, this can be done effectively with point of purchase information ranging from displays, brochures and handouts to samples and recipe ideas. The better customers understand what a label represents, the more likely they are to purchase the product.

Once you have decided on an eco-label, there are a several questions to ask before proceeding with placing them on a product:

  • Have you met the legal requirements for using the label on a product?
  • Do you have consistent guidelines for your label claims?
  • Is the information and benefit to consumers clearly stated, understandable and available?
  • How much will generating and using the label cost?
  • Does this label reward you and your consumers for "doing the right thing"?
  • Does your eco-label benefit both you and your customer?

Benefits for you and your consumers

Eco-labels will undoubtedly become more important as our food supply comes from farther and farther away and as questions arise about production methods, social justice, and product composition. In some cases, eco-labels provide the details that assist consumers in avoiding foods or ingredients that cause them to suffer allergic reactions. In others, they may help provide an informed choice for someone who is following a religious belief or a special diet as recommended by a physician. For most consumers, eco-labels are simply important because they offer specific information on how the product was produced and handled. "Vegan," "vegetarian," "dolphin safe," "low-fat," "salt free," and "free range" are all examples of labels that are frequently sought by consumers.

Recent events concerning the requirement for organic feed (for more information see part 1 of "Eco-Labels" in the previous issue of CG) have generated even more interest in eco-labeling. Depending on the outcome of the Organic Restoration Act (the bill proposed by Sen. Leahy that would repeal Section 771 of the Omnibus Bill), we may see even more eco-labels on livestock products. (The bill was approved in early April-ed.) It is important to keep in mind, however, that livestock labels are regulated. Be sure that any labels you consider for use on meat are legal.

What are the benefits of participating in a labeling campaign? A good eco-label should communicate with consumers. It should actually tell them something that differentiates your product from the others and establishes viable and visible brand identity. By getting to know and understanding your clientele and/or membership and offering them product information that reflects their desires and concerns, a store can use eco-labels in many beneficial ways. In most cases, this may bring product premiums that help your profit margin.

More information on eco-labels:

Visit: www.eco-label.org. This site, developed by Consumers Union, provides basic information, definitions of eco-labels, regulations, contacts, and "report cards" on various labels and organizations who use these labels.

For more information on organic feed and the Organic Restoration Act:

Liana Hoodes
National Campaign for Sustainable Agriculture
3540 Route 52
Pine Bush, New York 12566
Phone and Fax: 845-744-2304
www.sustainableagriculture.net
[email protected]
and/or:
Organic Trade Association at www.ota.com

Cissy Bowman manages Hoosier Organic Marketing Education, a non-profit educational organization in Indiana (317/539-4317 or [email protected]).

See other articles from this issue: #106 May - June - 2003