Clean Label in Consumer Goods – Thematic Intelligence

Clean Label in Consumer Goods Thematic Report Overview

Clean labels are consumer-friendly with products comprised of natural ingredients and fewer additives and artificial chemicals, as well as sustainable and ethical sourcing and production. Additionally, the clean label theme is part of the broader health and wellness movement which is gaining popularity. A greater number of consumers in both mature and emerging economies are becoming increasingly conscious about leading healthier lifestyles and the impact of what they are consuming. The connection between the ingredient content of consumer goods products and health has been heightened by the pandemic, which renewed concerns around safety and hygiene—specifically regarding the nutritional value of food and beverages and their ability to build immunity. Consumer goods companies will have to increase investment in this theme over the next few years to stay engaged and build trust with their consumer base

The Clean Label in Consumer Goods thematic intelligence report assesses how clean labels can be used across the consumer goods value chain. It provides an overview of the current landscape along with key trends and key players while highlighting case studies related to the theme. The report provides an industry-specific analysis based on GlobalData databases and surveys.

Clean Label in Consumer Goods – Key Trends

The main trends shaping the clean label in consumer goods theme over the next 12 to 24 months are technology, macroeconomic, regulatory, and industry trends.

• Technology trends: The key technology trends impacting the theme are blockchain, infrared (IR), radio frequency identification (RFID), AI, the impact of social media and disinformation, and new tech.
• Macroeconomic trends: The macroeconomic trends impacting the theme are inflation, supply chain management, COVID-19, geopolitics, and resource scarcity.
• Regulatory trends: Regulations against unsubstantiated sustainability claims, EU farm-to-fork strategy, nutritional labeling and nutrient profile models (NPM), and animal testing laws are some of the regulatory trends impacting the theme.
• Industry trends: The industry trends impacting the theme are allergen-free products, professional certifications, cultural understandings of different claims, and plant-based/veganism.

Clean Label in Consumer Goods – Industry Analysis

Investment in the clean label theme requires a strong market with steady supplies and stable sales. Since the pandemic, the consumer goods industry has seen its fair share of macroeconomic issues including supply chain disruptions, shortages, and high inflation impacting consumer spending. All consumer goods have a positive performance outlook, but some will grow faster than others in the next few years, creating greater opportunities for clean-label innovation in certain sectors. Food has the highest volume CAGR during 2022-2027. Beverages are an ideal target for clean label investment as consumers are willing to pay more for beverage formulations with improved health and wellness and sustainability and ethics credentials. Cosmetics & toiletries and pet care are both close behind food and beverages in terms of industry performance.

The Clean Label in Consumer Goods Industry Analysis also covers:

• Case studies
• Timeline

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Clean Label - Value Chain Analysis

The clean label value chain is split into four sections that include the processes at the supplier stage of the supply chain, the manufacturing stage, the consumer drivers, and key sub-trends.

Supplier and Manufacture Stage: The supplier stage consists of organic farming, regenerative farming, and fair labor practices. Supply chain management in consumer goods is the management of the procurement of raw materials which is offered by the supplier through the manufacture and distribution of finished goods. From end-to-end of this process in clean label products, there are multiple touch points and processes to ensure everything is managed smoothly and safely. The role of improving supply chain management in most organizations is to optimize efficiencies and maximize cost-effectiveness.

Clean Label Value Chain Analysis

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Leading Public Companies

Some of the leading listed players associated with this theme are:

• AB InBev
• British American Tobacco
• Coca-Cola

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Consumer Sector Scorecard

At GlobalData, we use a scorecard approach to predict tomorrow’s leading companies within each sector. Our sector scorecard has three screens: a thematic screen, a valuation screen, and a risk screen.

The thematic screen ranks companies based on overall leadership in the 10 themes that matter most to their industry, generating a leading indicator of future performance.

The valuation screen ranks our universe of companies within a sector based on selected valuation metrics.

The risk screen ranks companies within a particular sector based on overall investment risk.

Consumer Sector Scorecard – Thematic Screen

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Scope

• Since the pandemic investment in the clean label theme has taken a back seat as issues such as supply chain disruption, resource scarcity, and
  

  inflation have made it difficult to produce clean label products that rely on selective ingredients and typically involve complex logistical requirements compared to more processed products.

• Consumer goods companies will have to increase investment in this theme over the next few years to stay engaged and build trust with their consumer base.
• Health and wellness is now a priority for most consumers and clean labels can tap into a variety of aspects of this trend and offer greater sustainability and ethics and increased transparency.
• The parameters of what constitutes a clean label product are subjective and there is no legal definition, meaning that brands must interpret what the most important attributes are for their specific products, in line with consumer expectations.

Reasons to Buy

• Gain insight into the latest sub-trends around clean label.
• Identify how consumer goods companies are implementing clean label features and innovations in their businesses.
• Discover how new consumer behaviors will influence clean label in the years ahead.