The last year has seen a major shift within the F&F regulatory landscape, including the recent passing of California SB 258 (Cleaning Product Right to Know) and the successful industry initiative towards preventing the banning of coumarin.
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The last year has seen a major shift within the F&F regulatory landscape, including the recent passing of California SB 258 (Cleaning Product Right to Know) and the successful industry initiative towards preventing the banning of coumarin.
The most recent Women in Flavor and Fragrance Commerce (WFFC) fall seminar addressed this topic from a variety of value chain perspectives: regulatory, flavor development, sourcing and product development. Members, current and new, assembled at the Saddle Brook Marriott in Saddle Brook, New Jersey on November 15, 2017.
The Transparency Push
“As an industry, we must be more active in regards to transparency with all of the stakeholders throughout this process,” said Cynthia Reichard, executive vice president director of client services, Arylessence, Inc. Reichard presented a broad overview of how the fragrance industry is impacted by the push for transparency; particularly California SB 258.
California’s impact on the industry indicates the dynamic influence states will have on transparency in the coming years. “Consumer perception is that fragrances are not highly regulated,” Reichard explained. The layers between global, federal, state and company requirements are growing in complexity. The IFRA Code of Practice, for example, is preparing for its largest update, the 48th amendment, which will impact many companies producing F&F products in the personal care categories.
“We’re going to have to find a way to interact with consumers.” - Tony Moore, chief flavorist and chief operating office, Flavor Producers
Launched in February 2017 and sponsored by Senator Ricardo Lara, the bill is intended to disclose ingredients in consumer and commercial cleaning products. If the bill had passed in its original form, the number of manufacturers producing these products would decrease substantially. This launched a series of meetings between the industry and stakeholders, including the American Cleaning Institute, IFRA NA, SC Johnson, Seventh Generation, Honest Company, 3E and Givaudan among others. Additionally, non-government organizations (NGOs), domestic workers and steel workers were equally represented
The industry’s strongest driver is education. Recent meetings with IFRA NA & EPA, for example, are showing significant progress. Industry-promoted compliance programs, such as the Smart Label program, are indicators that the complexity of the regulatory trend is going to continue.
“We expect more activity at the state level,” said Reichard. She explained that currently, 15 states are enacting product label laws, like California, Alaska, Washington, Montana, Rhode Island, New York, North Carolina, Massachusetts, Montana and Vermont among others
“Product labels are crowded real estate,” Reichard said. As sustainability continues to evolve, the package gets smaller, as fragrance ingredients can add more than 25 materials on the label. Reichard adds the industry must work more closely with stakeholders to reach solutions in meeting consumer desire for transparency while balancing intellectual property needs.
The Cleaning Products Right to Know Act was introduced as a preamble linking cleaning products to causing cancer, asthma and other negative health impacts. It also required a pictogram to indicate the presence of hazardous materials placed on the label of cleaning products.
Some of the updated legislation’s preamble now states:
- Company business intelligence (CBI) can be claimed in accordance with the Uniform Trade Secrets Act;
- A list of COC’s can be narrowed down to 34 specific materials of concern, if present, of approximately 100 ppm/10 ppm 1.4 Dioxane;
- or if the material is found on one of the designated trait lists, then the list is expanded to approximately 70 fragrance materials;
- no pictogram
Reichard noted that in regards that fragrance ingredient disclosure and other cleaning product ingredient disclosure are distinct from one another, as the former are intentionally added. Additionally, fragrance ingredients on a designated list cannot be claimed as CBI. However, there are two options for online label disclosure:
- Fragrance ingredient’s function online can be listed as “fragrance ingredient”
- Listing all fragrance allergens or include allergen statement, and providing subsequent updates to allergen regulations
So what does this all mean for the company?
“Transparency initiatives will be driving label and website changes,” Reichard noted, “Programs will need to be written to calculate each new standard.” Reichard added that it’s critical to help stakeholders implement meaningful, streamlined and less complex programs and to allow current disclosure mechanisms. In sum, any newly added element is going to take tremendous effort for compliance.
“Participation makes all the difference,” she explained. “We need to be open to understanding what consumers are truly concerned about to meet these needs.”
Reichard stressed the importance of industry participation in active states. “Be aware of upcoming legislation and volunteer to lend your expertise to your company’s voice to the discussion…each company has an individual perspective that is a valuable part of the discussion.”
The “Essence” of Flavors
How do these regulations impact the flavor world? Asked Tony Moore, chief flavorist and chief operating office, Flavor Producers.
“Clean label is an industry buzz word, and cannot be clearly defined. [So] we have to make the definition ourselves." - Tony Moore
The Food and Drug Administration’s (FDA) Everything Added to Food in the United States (EAFUS) list, contains 3,968 substances. The Flavor Extract and Manufacturers Association (FEMA) list contains 4,878 materials. When a customer asks for clean labeling requirements in a brief (no artificial flavors/ingredients, no allergens, no GMO, USDA organic, etc.), this limits the flavorist’s palette significantly, Moore explained. Additionally, the customer perception of clean label does not include flavors.
“Clean label is an industry buzz word,” Moore said, “and cannot be clearly defined. [So] we have to make the definition ourselves.” According to Mintel, 75% of consumers claim they read nutrition labels, with expectation of the label waning, and the desire for more authenticity growing.
The clean label definition can vary from company to company, but they are all based on the consumer’s needs. Flavor developers are challenged with creating alternative solutions to interacting with their consumers on the label. Some companies are avoiding using “flavor” altogether and replacing with terms like “natural essences.”
“We’re going to have to find a way to interact with consumers,” Moore said. "Like it or not, our customers are consumers. Maybe, we’re going to have to start disclosing.”
Clean Label Sourcing: A Buyer’s Perspective
How is clean label defined at the procurement level? Gladys Gabriel, vice president of global procurement at International Flavors & Fragrances (IFF) presented on a variety of different perspectives from buyers within her company.
Based on an internal survey she sent to her team how they define clean label, the distinction between fragrance and flavor buys indicates what they’re projects are. Flavor buys were found to provide more feedback, recommendations and insights; whereas fragrance buyers showed limited experience with clean label.
“There is an evolving clean label definition. It’s not set across geographies and applications." - Gladys Gabriel
Buyers’ definition of clean label is complex— based on the ingredient, manufacturing processes and health and wellness; as well as responsible sourcing. All of these elements influence the procurement strategy along the value chain.
“There is an evolving clean label definition,” explained Gabriel. “It’s not set across geographies and applications. Europe and North America have not agreed on naturals. So it comes to the buyer, who is responsible for knowing where the customer is from. The more strict the regulation, the more expensive it is. It would be great if we could have one that we agree on.”
The more we set up the definition, Gabriel said, the clearer the interaction between customer and supplier. She explained that the opportunities that build resilient sourcing include a partner collaboration based in trusted and proven traceability; as well as a implementing a strategy that promote market expansion. “It’s not about negotiating the best deal,” she said, “[but] engaging the cross-functions across the supply chain.”
Striking a Balance
Shanna Cullinane, fragrance coordinator and senior research chemist, Seventh Generation, shared a consumer goods’ perspective on the benefits and drawbacks of full disclosure. This involves riding a fine line between protecting intellectual property and arming the consumer with knowledge.
“The label may not be as consumer friendly,” Cullinane said, “but we are trying to strike a balance between transparency and disclosure, while having compassion for how overwhelming this can be for the consumer.”
But how much disclosure is too much? It poses a bit of a business risk, Cullinane explained, because if consumers see this level of disclosure (which includes ingredient function on Seventh Generation labels), consumers may question whether these ingredients appear safe.
According to Mintel 50% of consumers are inundated with health information, and it fuels confusion and distrust of brands that claim to be healthy. Yet, companies are willingly disclosing ingredients to the public. Unilever announced its voluntary disclosure to the 0.01% of the formulation, along with scent descriptors to the individual fragrance materials provide to the product. The company’s online search tool allows for consumers to find allergen-free products. Procter & Gamble is sharing its fragrance ingredients to 0.01% of the formulation. Honest also disclosed its fragrance ingredients on the packaging along with CAS numbers.
“We are not perfect,” Cullinane said. “As we dig into supplier information of raw materials, we find things that may not be disclosed as properly as we originally thought; but we are absolutely pushing for full transparency.”
These disclosure initiatives are with the consumer in mind. “We feel we need to let the consumers decide,” she said. “We must decide on how to remain truly authentic, while delivering on consumer expectations.
Clean label is undefined, which gives rise to a variety of interpretations on the consumer and industry level. “What it means depends on who and were you are,” said Richard Andrew, senior director of research and development, BeachBody.
He explained that although there is no harmonized definition of clean label, the key to meeting consumer expectations is “to be authentic to what your company stands for.” He cited developing a company-wide consumer feedback program as a way to stay updated on consumer preferences.
From the Perimeter back to the Center
The perimeter of the store has been a major source of inspiration for the center of the grocery store. Consumers are looking for familiarity, quality, affordability and accessibility.
Campbell Soup Co.’s Lisa Thorsten, director of global regulatory affairs, and Lisa Schipsi, senior program manager, product development, co-presented on creating packaged foods that are shifting the center of the store away from the traditional lineup.
“We are on the perimeter,” Thorsten said. “We’re in the center, we’re shifting our portfolio away from the center and to other parts of the store, and you see that reflected in businesses that are newer to Campbell.”
Aside from asking consumers to define “real food,” the conversation sparked an internal discussion and challenged the company to create its own definition. “Real food is familiar and a desirable ingredient,” Thorsten explained, “And this means different things for different businesses…consumers will tell us the direction and what should go or stay. It’s a journey and consumers understand that.”
The co-presenters shared four different case studies on a variety of products that start with a culinary vision based on consumer-focus groups and flavors that are familiar, and products that are accessible. “It was all a big question of what do consumers want to see and how important is it to create a label, and what ingredients do we use?” Schipsi explained.
The company’s portfolio consists of a variety of different products, some including flavors, some without. “There’s a perception that we’re taking our flavors out of these products,” Thorsten said. “We need them. How the ingredients are explained to consumers is really important…We are voluntarily labeling our GMO products, not because we want to get out of it, but we really feel that these products are safe and acceptable way of plant breeding. We took a little bit of a leap of faith on that to bring consumers along with us.”
