Bakeries armed with a comprehensive understanding of processes, from sourcing to final product, are poised to capitalize on natural claims and shorter ingredient lists.
Whether the benefits are real or perceived, consumers are demanding natural products with simpler ingredient lists. Such products are inexorably linked with the overarching health and wellness trend in the food industry.
“The cleaner label trend goes hand in glove with healthy eating in general. You can't benefit from healthful claims, such as whole grains, if you have a label littered with chemical information,” says Marc Green, senior marketing manager at National Starch, Bridgewater, N.J. “It's contradictory, and you lose credibility. What we see is the convergence of two trends, healthier eating and more natural life styles. You can't disassociate the terminology from the claim and the position.”
According to a 2007 study by the American Bakers Association, healthy ingredients were the fourth most important issue to consumers when asked about their bread. Forty-one percent said that healthy ingredients were very important to them. Only 3 percent said health was not at all important. A 2008 study by market research firm Mintel showed that 47 percent of bread consumers value nutrition more than price, and 42 percent of bread consumers read nutritional panels before buying. More specifically, today's educated consumers are seeking clean labels on nutrition panels. Perhaps most notably, the company recently forecasted sales in the natural and organic segment to grow by nearly 20 percent between 2010 and 2012.
Open to interpretation
Despite the uptick in consumer demand, natural ingredients and all-natural claims remain a sort of Wild West of health claims.
“The term ‘natural’ is still open to interpretation, according to some in the industry, so what one person might consider natural, another may not,” says Kim Silva, operations team leader at Fairytale Brownies, Phoenix. “An example is regular bleached flour. Some consider it natural because the actual ingredients are the same as the unbleached product, but it is the process the flour goes through that some consider unnatural. So, sometimes defining what natural actually entails can be difficult.”
The question of perception versus reality among consumers also exists. When it comes to labels, citric acid or sodium bicarbonate may have a nefarious ring to some consumers, whereas their common names, apple vinegar and baking soda, sound homespun and natural. But the object isn't to trick consumers. In fact, honesty in labeling is another facet of clean labeling.
“People want clarity, they don't want to be deceived,” Green says. “People just want the truth, want manufacturers to be upfront about the products they make and what's in them.”
Currently, manufacturers are free to set their own definitions of natural. Consider PepsiCo.'s upcoming Pepsi Natural soda variety. How natural can soda be? The lack of strict regulation on what constitutes natural gives bakers substantial latitude when it comes to adding new lines or reformulating existing ones.
“Since the FDA has not defined natural as a regulated claim like they have for kosher, for example, a well-maintained plant can effectively bake their natural product on the same line as other products,” says Jeff Rootring, vice president of technical and training for St. Louis-based AB Mauri Fleischmann's. Bakers are thus able to modify their products to carry fewer ingredients or simpler ingredient ledgers without necessitating dedicated facilities, major equipment or labor alterations.
But that's not to say the process is simple. Bakers know that ingredient substitution is rarely a simple 1:1 proposition, and individual ingredient reduction can be treacherous because results depend on the interaction between ingredients, not just their sum. According to Emily Jack, marketing assistant at the National Honey Board, there are two issues bakers have to analyze as they seek to simplify their product labels.
“The first issue is visual,” she says. “Consumers are increasingly becoming label readers, and they want to see an ingredient listing with familiar names that connote positive reactions.”
This visual shift extends to both the packaging and the product itself, Green adds. “We have seen a lot of changes in the look and feel of the product, with a lot more emphasis on ideas like ‘raw’ and ‘wholesomeness.’ Also, more neutral colors are used instead of bright, synthetic or unnatural colors,” he says. “And we're seeing more front-of-package claims, too. It seems everyone has to have a package claim-even Cheetos has a natural claim.”
The second issue bakers face when simplifying or shortening an ingredient list is ensuring they are not removing functionalities while removing ingredients.
“Honey is a solution to this problem as it performs multiple functions in bakery foods, including extending shelf life, enhancing color, improving mouthfeel and keeping products moist for a longer period of time,” Jack says.
Justify higher costs with higher profits
Fairytale Brownies started using unbleached flour earlier this year. The mail order company began transitioning certain brownie flavors to unbleached flour in 2009, when Arizona's Whole Foods stores started selling the product. Already known for using natural ingredients, such as real butter, farm fresh-eggs and no artificial ingredients or preservatives in its gourmet brownies, Fairytale saw that switching to unbleached flour was the next logical step toward its goal of being all natural.
But unbleached flour, like other natural ingredients, tends to be more expensive than flour whitened by bleaching agents. This expense can be compounded if process changes are required. If a bakery produces a variety of product lines, for example, and some do not use all-natural ingredients, they may want to implement internal processes keeping lines separate to avoid cross-contamination.
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Bakeries aren't legally obligated to enact such changes simply for a natural claim, which is part of the gray area, but if they choose to do so, it can present additional costs.
Eileen Spitalny, Fairytale's founder, explained process changes requiring equipment, extra labor or new lines are expensive, and that cost has to be passed along to the consumer in the price of the product.
Although a granular assessment of increased ingredient and production costs may appear daunting initially, it doesn't paint the entire picture. The organic category has grown 5 percent during the past year, despite the recession. People are willing to pay for natural products with simple ingredients.
“When looking to clean up ingredient lists, as a rule of thumb, a very comprehensive view is needed,” says Alejandro Perez, associate of snack applications, customer solutions and product innovations at National Starch. “A baker cannot just look at the pound-by-pound price of the new ingredient. You can't just look at how much it sells for. You have to look at it in a holistic way; not just one data point, but all data points combined. The processing, the ingredient costs, functionality, commercial side of things; all of these factors need to be considered together.”
Dedicated lines aren't usually necessary, but they can be marketed to consumers willing to pay a premium for products from bakers who have gone the extra mile.
According to Green, profitability is a factor bakers must consider comprehensively; otherwise, potential profits could be left on the table. He cited one company that, because of new health claims, was able to sell bread to people who previously didn't buy bread. Even factoring in the cost of more expensive ingredients, the company's gross profits increased. Every company has to manage its own profits, but cleaner labels and simpler ingredient lists, along with natural claims and “no-negative” claims (no preservatives, etc.) can help a company move up the ladder of consumer perception and differentiate itself, allowing for higher margins.
And as more ingredient companies recognize consumer demand for natural products, availability increases. This puts pressure on ingredient companies to keep prices in league with those of traditional products. “Sourcing ingredients is one of the most important factors to consider when producing a natural bakery food line. As this category continues to grow, more and more natural ingredients have entered the marketplace,” Jack says.
Lean on suppliers when reformulating
Bakers face reformulation challenges when moving toward clean labels as well. For example, beet juice used as an all-natural red dye can sometimes impart the flavor of beets. According to Spitalny, food science is a major factor when redeveloping formulas with new ingredients, as product may become too thin, runny or may have textural changes. Product quality and consistency are crucial for best practices and success for a bakery business or any other retail business.
Once a more label-friendly option is identified, the next step is to adjust the levels of all ingredients to account for the product as a whole. Flexibility is key in the trial and error process of reformulation, research and development, but bakers ought to keep in mind ingredient manufacturers and suppliers may already have solutions in place.
“That's our job, to be working with suppliers and innovating. Some of the big processors have the technologies already in place,” Green adds. “Bakers are never on their own, and they can rely heavily on suppliers to augment their internal research when reformulating.”
According to Rootring, AB Mauri Fleischmann's provides solutions to create consistent products by partnering with its customers. This philosophy holds true for natural solutions. Shelf life, for example, is a common concern for bakers seeking more natural product profiles.
Natural products and cleaner lables are gaining traction among consumers, and bakeries are uniquely positioned to take advantage of the market with only limited changes to existing product lines. Ingredient costs and reformulation challenges are the primary hurdles to be cleared, but by a holistic approach that accounts for everything from ingredients, to processes to finished product, bakers may be surprised with the opportunities available with cleaner labeling.