U.S. food suppliers make claims about their production processes on food packaging that highlight attributes some consumers want while charging a higher price than for unlabeled products. Some labels use such claims as “USDA Organic” and “raised without antibiotics,” which require different and more expensive production techniques than conventional agriculture. However, food suppliers can use the label that claims the food is “natural” at a relatively low cost because regulatory agencies treat the claim as meaning nothing artificial was added and the product was minimally processed. Numerous consumer food choice studies concluded that consumers equate the natural label on food with healthier food choices and more costly production practices that signify environmental stewardship. Informed by these previous studies’ findings, the authors of this report estimate the frequency with which food suppliers make the natural claim on food packaging labels. Estimates are based on scanner data and comprehensive label data. Across all foods in 2018, 16.3 percent of retail food expenditures and 16.9 percent of all items purchased (unit sales) were for foods labeled natural, whereas 11.0 percent of Universal Product Codes (UPC) in stores were labeled natural on the packaging. Expenditures for food labeled natural were larger than expenditures for foods labeled USDA Organic. Natural labels were found predominately on processed products. For example, 95.6 percent of expenditures for vitamins and meal supplements were for products labeled natural, compared with 0.5 percent of expenditures for potatoes.
Details
Title
The Prevalence of the “Natural” Claim on Food Product Packaging
Record Identifier
https://ageconsearch.umn.edu/record/340804
Language
English
Total Pages
14
Note
To estimate the retail market shares of natural-labeled products, the authors of this report used proprietary IRI InfoScan retail scanner data and Label Insight (acquired later by NielsenIQ) data. IRI InfoScan retail scanner data comprise a dataset of retail food sales, whereas Label Insight provides a dataset of product attributes. Product information from both IRI and Label Insight were combined to identify food products with natural label claims, and InfoScan sales data were used to estimate the shares of sales, shares of units sold, and shares of Universal Product Codes (UPCs) that were labeled as natural. Calculations were made for all food and major food groups, which are defined by USDA’s Economic Research Service (ERS) Food Purchase Groups (Muth et al., 2022). The data and food definitions were from 2018, which was the most recent year available at the time of this report’s publication. Relying on 2018 data provided a snapshot of the retail food market a year before food supply disruptions caused by the Coronavirus (COVID-19) pandemic. The authors aggregated dollar sales, quantities, and counts of UPCs across all stores in the InfoScan data and calculated the shares attributed to products with and without natural labels. Sales of random weight and perishable products were included in the totals to capture the most complete picture of the retail food market, although natural claims are most typically found on pre-packaged products. A total of 64,372 UPCs, representing 11.0 percent of food products sold across all IRI stores in 2018, included a natural claim on the product packaging (table 1).
