Do Labels Matter? Yes, They Do

Non GMO Project Verified LogoUSDA Organic, Fair Trade, B Corp, LEED Certified Non-GMO Project Verified…

There are hundreds of labels, certifications, and seals in the marketplace. The Ecolabel index lists 459 ecolabels alone.

It can be time-consuming and sometimes expensive to get your product, company, or organization certified. Does certification matter? Will it have any impact on your bottom line? Should you bother pursuing certification?

In a word, yes. And here’s why.

Consumers and Buyers Like Labels

Good Egg Marketing Hit logoThe Sustainable Business Network of Massachusetts hosted a panel of food industry experts at its 2015 Buy Local Trade Show to talk about labels and certification. Although the panelists expressed concerns about the limitations of labels, they agreed that labels are important to both consumers and store buyers.

Cambridge Naturals logo“Labels are an easy way for customers to vet the product as they pick it up,” said Cambridge Naturals co-owner, Emily Kanter. “Some products have as many as 12 labels.”

Certified B Corporations logoIn addition to offering their customers as much information as possible about the products they sell, Cambridge Naturals undertook the arduous process of becoming a Certified B Corp last year, so customers would have third-party verification that they are a sustainable business with doing good at its core. A growing number of companies are using B Corp certification to demonstrate their interest in social mission, according to the New York Times.

Health Care Without Harm logo“It’s hard for large institutions like hospitals that purchase millions of dollars of food a year to ‘know your farmer, know your certification,’” noted panelist John Stoddard, Healthy Food in Health Care Coordinator for Health Care Without Harm. “Labels and third party certifications help them find products that meet their values.”

Certified Products Sell

Non GMO Project Verified LogoSales of some certified products are brisk. Domestic sales of certified organic products grew 11% to over $39 billion in 2014, according to the Organic Trade Association. And sales of Non-GMO Project verified products jumped to $8.5 billion in 2014, up from $3 billion in 2013. The Non-GMO Project is currently backlogged and manufacturers are adding statements such as “not made with genetically modified ingredients” to their packages without any verification.

Chappaqua Crunch GranolaDebbie Waugh, creator of Chappaqua Crunch Granola, has pursued a variety of seals, but has gotten the most feedback on their Non-GMO Project certification. “We use non-GMO canola oil in our granola. It’s very hard to get canola oil that doesn’t contain GMOs,” says Waugh. “When people hear that our products are non-GMO, it gives all of our claims more credibility.”

Doing the necessary legwork for pursuing the certifications convinced Waugh of their value. “I meet other producers who say, ‘We don’t have any GMOs in our products, so why do we need to get certified?’” She added, “But you can’t make a claim without verifying it. There are lots of foods with GMOs that you’d never expect. For example, we had to switch to organic honey in order to get non-GMO verified, because conventional honey can contain GMOs.”

Not Everything Can Be Certified

USDA Know Your Farmer, Know Your Food logoCertifications, or even a common definition, are not yet available for some of the attributes that are most important to consumers. For example, demand for products with locally sourced ingredients is now outpacing organic in many situations, yet criteria for what’s considered local varies from “my backyard” to “100 miles” to even “the entire East coast.” Many states offer some form of seal or marketing program for local products, but most consumers and buyers must rely on “knowing their farmer,” or at least knowing their food distributor, to be sure they’re buying local.

“Natural” is another attribute that is in high demand, yet there’s no certification for it. The USDA does regulate use of the term “natural” for meat, poultry and egg products, but the FDA has no definition for natural, so manufacturers can get away with calling almost anything natural. According to a 2012 Nielsen survey, consumers are highly skeptical of vague claims that a product is fresh, all natural, or heart-healthy, yet slapping the word natural on a label helps sell $40 billion worth of food in the US every year.

Shifting Standards

Good Egg Marketing Miss logoWhile certifications can be helpful for both consumers and the companies getting certified, if you’re pursuing certification, be sure to investigate how certification standards are set and whether those standards will be adjusted over time. For example, Fair Trade certification standards have changed, but not in a good way.Equal Exchange Community Sales Manager Virginia Berman, another Trade Show panelist, pointed out that Equal Exchange began business as a Fair Trade company without any certification, because it was founded before TransFair USA began offering the first Fair Trade certification, but became 100% Fair Trade certified as soon as it was possible.Equal Exchange logo“Equal Exchange has always focused on trading directly with small scale farmer organizations,” Berman said. In recent years, however, TransFair changed its name to Fair Trade USA, eliminated farmers from their governance model, and began certifying large-scale plantations that produce coffee and other commodities. Equal Exchange believes that this goes against the principles of Fair Trade.Equal Exchange hasn’t abandoned Fair Trade certification, but it’s urging consumers to support “Authentic Fair Trade” by only buying Fair Trade products produced by small farmers. “We’d feel better about seals if more consumers were alert and attentive and looking beyond the seal,” Berman said.

The bottom line? Certification is no substitute for honesty, transparency, communication, and education. But it can be a great starting point for those actions to take place.