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Smart Labeling of Food: IoT and Foodtech for Consumer Empowerment


Last updated: 15.05.18
Ansprüche an Qualität und Nachhaltigkeit von Lebensmitteln können sich von bloßen Marketing-Gags zu Standards entwickeln.

Widespread adoption of consumer-centered smart labeling of food products will potentially allow us to finally understand what we are eating.

 

According to a global survey by Nielsen in 2011 with respondents from 56 countries, 59 % of consumers around the world indicate difficulty understanding nutritional labels on food packaging.

In the US, 53 % of consumers read labels of food products, yet a recent study by Label Insight showed that 67 % find it challenging to understand the information on a product’s package, and nearly 50 % claim they aren’t informed after reading its label. The same study found that 74 % of participants went online to research information about a product that was not clear from the packaging itself.

These data reveals that there is a strong demand for clear labeling of food products yet to be met. As concern for food safety and consumer involvement increase, will smart labeling of food evolve to play a key role in consumer empowerment and become an industry standard in foodtech?

 

Smart labeling of food for consumers

Smart labeling, also called e-labeling or electronic labeling, is the practice of using a screen as a means to display the characteristics of a product. This process is already being largely used for production purposes, yet its use for the consumer end use remains marginal.

In the case of food and beverage items within fast-moving consumer goods (FMCG), smart labeling provides a digital source of nutrition, ingredient, allergen and additional information to consumers that may or may not be present on the physical label printed on the packaging or attached to the product itself.

This means that consumers will be able to access product characteristics through a device with a screen, typically their own smartphone, and there are mainly two technologies enabling this new form of communication between brands and their potential buyers.

RFID chips are conquering the foodtech market and being used for smart labeling and augmented reality.

 

How does smart labeling work?

Smart labeling is essentially designed for physical closeness to a product, nonetheless it also bears clear opportunities to provide additional information for online buyers. Through smart labeling consumers are able to access product information by means of an electronic device such as their smartphone, their tablet computer or an interactive screen device installed at the point of sale itself.

One of the main technologies in this field, QR code, can already be seen in some product packaging, mainly wine and spirits, for marketing purposes. It involves printing a code on the packaging that will be scanned by shoppers at a grocery store through any of the scanning apps universally available for smartphones. This code will lead them to a web page or app screen containing the smart label for that product.

The second and perhaps more promising technology is near field communication (NFC). Just tapping a smartphone to a product containing an RFID inlay, typically within a distance of 10 cm or less, will trigger access to the smart label on the screen. This solution presumably implies less restrictions to package design or shelf appeal than QR codes, as the NFC coding can be hidden inside the packaging. This technology is already largely used at the production level but still has not reached critical mass in consumer distribution.

 

Opportunities of smart labeling for consumers and society

From a consumer standpoint, the opportunities of smart labeling are truly manifold. A handpicked selection is presented here in order to address two fundamental goals: increasing both the number of consumers reading labels and the understandability of those labels.

 

More transparency through voluntary early adopters

A centralized database in the world wide web containing information straight from the source is a big step towards transparency and availability of product information.

Although this aspect will not be a major influence in the foreseeable future, I do believe that by becoming more transparent, some inconsistencies in marketing messages of brands will be exposed and, once relieved from spatial constraints, much of the regulatory effort will be simplified by manufacturers themselves taking care of the truthfulness and completeness of information on the label.

As more companies are joining programs such as Smart Label® in the US, they disclose more details that transcend those that can be shown on a physical label due to sheer lack of space. Product labels in this platform contain information on allergens and include claims such as calories per serving, as well as certifications from independent organizations on product composition, environmental protection and/or social justice.

All in all, this increase in transparency, even if voluntary and only coming from selected companies, will set an example of the needs and demands of consumers.

This on-package QR code is spreading some digital fairy dust for marketing purposes.

Increasing nutritional knowledge through connectivity and multimedia content

The capabilities of links, images and videos will prove very helpful in making the public become more familiarized with the definition of nutrition values and ingredients, production processes, the origin of the listed ingredients and their usage in recipes.

 

Customer interaction with manufacturers

Including social interaction features in smart labels could become key in alleviating one of the most fundamental problems of food labeling altogether, by not only increasing the number of people reading labels but also providing feedback on what consumers actually want to know about food and beverage products.

Public social interaction between consumers and manufacturers or retailers is still mostly confined to social networks, with only large distributors like Amazon offering a space for public questions and answers at the product level. Questions and answers of products should be easily submitted and attached to the smart label, thus creating a forum for customers and brands where there is an official source providing the answers.

As landing pages, product cards can also be easily used for multiple marketing purposes, such as sharing food recommendations. When marketed right, consumers should be able to reach their local distributor or online vendor for a particular product via the manufacturer’s product card available from the smart label card within a few clicks. The world’s leading smart labeling provider, Smart Label®, already includes social sharing buttons for every product in its website and app.

 

Market profitability and further applications

I have shown a brief glimpse of the possibilities around smart labeling. Numerous additional benefits can arise when adding human-centered design, integration with web applications, regulation, internationalization, marketing analytics, big data, animal welfare, fair trade, accessibility for the visually impaired, food safety, traceability and sustainability to the mix.

There is certainly much power to be gained by consumers and many millions to be made by manufacturers and retailers in the race towards labels that go far beyond the incomprehensible microscopic lists and one-way communication that we are used to. And it will help everyone of us to make more informed and better food choices along the way.


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