Clean-label products driving retail sales, Acosta Group study finds

Acosta Group has released the results of its recent Clean Label Insights Study with its proprietary Shopper Community in advance of Expo West, providing brands and retailers insights into the growing value shoppers place on clean label in purchasing decisions as well as their attitudes on regulations pertaining to product ingredients, including the California Food Safety Act of 2023.

Acosta Group's deeper dive into clean label comes shortly after the release of its five retail  predictions for 2024, one of which stated that consumers will prioritize what's not in their products.

While all consumers may not be aware of recent regulatory legislation, 83% of shoppers are already knowledgeable about clean label products or have heard the term. Not officially defined, clean label products are described in the industry as having as few ingredients as possible, easy-to-recognize ingredients and no artificial ingredients or synthetic chemicals.

[Read more: HRG’s five notable products from May 2023]

"Our research further defines shopper priorities, preferences and generational differences around clean label products," said Kathy Risch, senior vice president of thought leadership and shopper insights at Acosta Group. "It's clear that shoppers consider the absence of negatives, or an emphasis on what's not in the products, to be the most important attribute in their clean label purchasing choices."

When informed of the term, shoppers say clean label is important or very important for their purchasing decisions, with nearly eight in 10 shoppers believing the products are better for them/their families and for the environment. 

Shopper attitude is reflected at checkout, with clean label sales outperforming total store sales by a compound annual growth rate of 8% versus 6% respectively over four years, according to NIQ. 

Acosta noted that without a doubt, legislation is accelerating the clean label trend as it forces significant changes be made to foods that are consumed every day. Brands are reinventing the classics and taking steps to remove chemicals, but more can be done based on product changes that have occurred abroad. Specific to food and/or beverage, 55% of all shoppers believe more regulations are needed. That number increases to 72% for Gen Z, and 62% for clean label buyers.

The biggest challenge to clean label purchases is cost, with some shoppers saying the products are "too expensive" or that they "don't believe the hype." When prices are higher, 40% of men are willing to pay for clean label products, compared to 28% of women, according to the recent study.

Over the past six months, most consumers knowledgeable about clean label purchased some of these products, led by plant-based milk, plant-based meat and baby food sales. But clean label products skew younger overall, with Gen Z and Millennials stating that they expect to buy more of these products in the future, positioning them as clean label's strongest advocates.

For younger consumers, clean label purchasing decisions are distinctly driven by health benefits for themselves and their families. In the case of Gen Z and Millennials, a higher value is placed on natural or Certified Organic products. 

[Read more: REX Awards 2023: Beauty]

The Acosta Group study revealed that today, younger buyers are more likely to notice clean label brands or retailer-led clean label programs, both online and in-store, at the retailers they shop most frequently. 

Importantly, 57% of shoppers trust retailers' clean label efforts, with that number rising to 77% for households with kids, according to the Acosta Group study. In addition, 70% of all shoppers want retailers to help them understand clean label products.

“We know that many consumers – especially younger consumers – care about clean label, support legislation and trust retailers to offer them true clean label products as they also inform them about these products," the company said. "This lays a solid foundation for ongoing sales growth, supported by savvy, integrated and strategic programming to continue to build consumer trust, allay cost concerns and educate shoppers about these better-for-you products.”

"It's essential that clean label programming meets consumers as they shop seamlessly in-store and online, through digital and social media campaigns and retail media, in addition to packaging, signage and shelf management," said Andrew Fleming, senior vice president of natural at Acosta Group.  Understanding the differences in key label attributes is valuable to building campaigns, and retailers should leverage AI to provide shoppers with recommended products based on the absence of ingredients, a differentiating attribute we know is key." 

Shopper research was conducted Jan. 19-22, 2024, with 1,257 U.S. shoppers, members of the company's proprietary Shopper Community. The Acosta Group Shopper Community is comprised of over 40,000 demographically diverse shoppers across the U.S. and is the company's proprietary community for survey engagement. 

Acosta Group also announced that Mike Burrington, president of OeP, an Acosta Group agency, and Andy Burger, chief commercial officer of Acosta Group Digital Commerce Services, will lead workshops at the Natural Products Business School on Tuesday, March 12, from 9 am to 2 pm PST. Attendees will learn what to consider when building and evaluating their digital/omnichannel plan from the perspective of their client, their own financial viability and the financial benefit to Amazon and other c-commerce partners.

Participants also will learn how to break down the components of financial viability and how to review opportunities and simplify their decision-making, applying Acosta Group's proprietary Facts framework: financial viability, availability, correct set-up, traffic and sales.