Powering

profit
The next frontier
of clean label
formulation

1
Introduction
In a first-of-its kind study, the Ingredion Global
Clean Label Manufacturer study (2021) found that
most food and beverage manufacturers consider
clean label an important part of their business
strategies and expect to increase the percent of
clean label offerings over the next two to three
years (see Figure 1 and Figure 2).1 While this may
be viewed as table stakes to remain relevant
and protect existing category share, the switch
to clean label has the power to positively impact
brand perception and increase profits, which far
outweighs any subtle increase in ingredient cost.
Data from the study shows that 40% of global
manufacturers report that they have increased
pricing, and 58% have reported an increase in
overall revenue as a result of converting to clean
label products (see Figure 3).1
markets and claims– articulates the consumer
perspective of clean label. Ingredion’s early
consumer insights uncovered the link between
ingredient recognition and acceptability, as
well as the relationship between ingredients
and packaging claims and their impact on
consumer purchase intent. This view of consumer
preferences presented by Ingredion became the
new standard for processed foods and widely
accepted by the industry as the definition for
clean label. Over the years clean and simple labels
have come to signal product quality, resulting in
consumer willingness to pay more.2 Results from
the 2020 ATLAS data shows that 69% of global
consumers report a willingness to pay more for
claims that are important to them, with one-fifth
of all respondents open to a 30% premium.2

Defining clean labels Because consumers equate clean label ingredients

and products with quality and value, misusing
Ingredion’s primary research database, ATLAS– the term “clean label” and associated claims
which began in 2011 and has been redeployed can weaken the value for both consumers and
numerous times to include additional ingredients, manufacturers.

FIGURE 1

Importance of offering clean label foods Importance of ingredient supplier

or beverages to your company’s overall offering clean label options
business strategy
Don’t Don’t
know know

Globally 5% 8% 11% 24% 52% <1% Globally 2% 6% 14% 25% 51% 2%

North 6% 2%10% 81% 0% North 4% 5% 15% 75% 1%

America America

Mexico 4% 20% 24% 52% 0% Mexico 12% 4% 24% 48% 12%

South South
America 7% 11% 35% 47% 0% America 7% 13% 31% 49% 0%

Europe 8% 12% 16% 28% 36% 0% Europe 2% 7% 23% 24% 43% 1%

APAC 8% 8% 10% 28% 44% 1% APAC 2% 8% 15% 33% 39% 2%

Not at all Not Somewhat Very Extremely

important (1-2) important (3-4) important (5-6) important (7-8) important (9-10)

2
 FIGURE 2
Percentage of clean label product portfolio, by region

NORTH AMERICA MEXICO SOUTH AMERICA EUROPE APAC

Entire 4% 12%
portfolio 14% 9% 8%

Part of 86% 96% 91% 92% 88%

portfolio

81%
79% 78% 80%
76% 73% 71%
72% 71%
66% 69%
64%
54% 56%
52%

Average %

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Powering profits
As the importance of health and wellness grows, Usually, the decision to formulate for clean
expected demand for clean label will continue label is made between an R&D, marketing and
to rise. In fact, the global clean label market is procurement leader.3 Each of the three functions
projected to grow at a compound annual growth has distinct business objectives and barriers of
rate of 6.75% (2021-2026).5 Product developers their own that they must overcome.
clearly note three barriers to converting additional
products to clean labels: ingredient cost, FIGURE 3
perception of decreased shelf life in the finished Global business impact of
product, and lack of formulation expertise with clean label conversion
clean label ingredients on their teams.
Product
pricing 41% 56% 3%
Manufacturer perception of cost associated with
clean labels can act as a barrier in advancing a
clean label strategy. In our research, 75% of North
Margins 50% 44% 6%
American manufacturers reported an increase
in overall revenue as a result of clean label
conversion compared to 58% of manufacturers Overall
revenue 58% 38% 4%
globally — results driven by an increase in overall
revenue and margin because of the inherent
quality/value proposition of clean label (see Figure Increased Stayed the Decreased
same
3 and Figure 4).1
North American manufacturers report that clean label is
associated with high quality products and a positive brand
reputation. Globally, other top reasons include associations with
being healthier, more sustainable and having a better taste/flavor.

3
 FIGURE 4
Business impact of clean label conversion, by region
Three-fourths of North American manufacturers reported
revenue growth as a result of clean label conversion; in other Increased
Stayed the
same Decreased
markets, around half of manufacturers reported overall
revenue increases.

NORTH AMERICA MEXICO SOUTH AMERICA

Product Product Product
pricing 46% 53% 1% pricing 36% 52% 12% pricing 46% 52% 2%

Margins 68% 31% 1% Margins 64% 28% 8% Margins 41% 48% 11%

Overall 75% 24% 1% Overall 44% 56% Overall 56% 35% 9%

revenue revenue revenue

EUROPE APAC
Product Product
pricing 37% 58% 5% pricing 40% 59% 1%

Margins 42% 52% 6% Margins 45% 48% 6%

Overall 52% 42% 6% Overall 54% 45% 1%

revenue revenue

What are the business barriers

to clean label conversion?
Cost
Ingredient cost is the number one barrier to
accelerated product development, and one-
third (34%) of manufacturers globally attribute
the cost of clean label ingredients as an obstacle
for reformulation.1 There are additional costs as
well, including those associated with benchtop
development and scale-up (i.e., R&D hours) and
printing new packaging. Finding the right partner is
about more than just expertise, R&D resources and
speed to market. It’s about working with an insights-
savvy strategic partner who can help guide the
best product development strategy for your brand,
maximizing consumer perceived value and pricing
decisions to drive brand loyalty and market share.
In fact, according to the manufacturer study data,
40% of global manufacturers report that they have
increased pricing as a result of clean label products
and 58% have reported an increase in overall
revenue (see Figure 3).1
Shelf life
A second key barrier reported was concern about
decreased shelf life of clean label products. In
bakery, the functionality of clean label ingredients
is especially challenging. For both frozen and
ambient products, gums and functional starches
are incredibly important in providing shelf stability.
When moving toward a clean label, some of
those stabilizers may be removed, impacting the
texture and taste. These attributes are generally
considered of high importance for consumers and
especially critical in specialty products like gluten-
free bread. Finding a partner who has clean label
expertise and works across a variety of categories
and temperature states can help maximize
product taste, texture and shelf stability. They use
ingredient-specific insights to take the guess work
out of formula change.

4

Lack of formulation expertise
Nearly one-third of respondents noted either
“lack of expertise in using clean label ingredients
(29%)” or “difficulty formulating with clean label
ingredients (28%)” as a top challenge (see Figure
5).1 Inexperience with clean label ingredients,
complexities in reformulation and limited internal
resources could contribute to this statistic.
Finding partners with formulation expertise who
are skilled in overcoming these challenges is critical
to commercial success.
Which categories?
Which ingredients?
While opportunities exist across all categories,
two categories have been identified as having the
greatest rates of planned conversion:
Bakery products
• Sweet
• Savory
Beverages
• Carbonated soft drinks,
energy drinks, flavored
waters and juices
• Alcoholic beverages
• Nutritional beverages
FIGURE 5
Challenged in converting
to clean label
28% 29%
Difficulty formulating Lack of expertise
with clean label in using clean label
ingredients ingredients
Target ingredients and
categories
Product developers feel confident in making the
transition to clean label when it involves a select
set of ingredients, including those most often
currently converted to clean label: sweeteners,
nutritional ingredients and artificial flavors.
Nutritional ingredients and high fructose corn
syrup are most likely to be converted in the next
24-36 months, according to manufacturer study
data (see Figure 6).1
Manufacturers identified several categories
targeted for conversion to clean label, including
Bakery and Beverage (see Figure 7). Clean label
product development was projected to increase in
in some instances by as much as 26 pts depending
on the region and category.1
Not surprisingly, ingredients and categories
targeted for clean label activities in 2-3 years
versus currently underway varied by region.
5
 FIGURE 6
Ingredients targeted for clean label replacement

Near-term
targets

+12% +13% +14%

Artificial
Starches Preservatives
colors

Mid-term
targets

+12% +13% +14%

High fructose Emulsifiers Maltodextrin
corn syrup

FIGURE 7
Product category conversion to clean label

Anticipated percentage
Current percentage of
of category’s clean label
category’s clean label
conversion in 2-3 years
conversion (in %)
(in %)

Bakery Bakery Beverages

Sweet Savory nutritional, meal replacement

33 35 35
31 34 33
28 30 30 30
28 28 26 27
26 26 24 25
24 23 22
22 20 21 20 21
20 19 20 20
18

12 12
8 8
6

l l l
NA EX SA EU AC ob
a NA EX SA EU AC ob
a NA EX SA EU AC ob
a
M AP Gl
M AP Gl
M AP Gl

6
Why should busting these
barriers be a priority for
today’s food company?
Consumers are continuing to demand
cleaner, simpler labels and healthier,
better-tasting products. According to
ATLAS research, consumers reported
increasing spend on products with claims
they believe to be important.2 Addressing
the barriers to entry (ingredient cost,
shelf life and formulation expertise)
affords manufacturers the opportunity to
protect and/or grow their category share
rather than get left behind. Partnering with
the right expert can help manufacturers
overcome formulation challenges using
ingredient-specific insights to deliver more
consumer value. Today’s consumers are looking
for products with fewer ingredients that taste great
and deliver improved nutritional profiles. Clean label
products are an opportunity for manufacturers to
add meaningful consumer benefits and in many cases
create sustainable business value, including: increasing
sales, commanding premium price, and positively
impacting brand perception.

FIGURE 8
Shifts in consumer reported purchases versus prior year

Buying packaged foods Paying more for packaged Buying packaged foods or
or beverages with natural foods or beverages with claims beverages with no additives
ingredients that are important to you or artificial ingredients

Purchased less 5% 14% 9%

Purchased same 48% 54% 49%

Purchased more 47% 32% 42%

Net gain +42 pts +18 pts +33 pts

7
 Manufacturers reported that clean label Being first to market or first to market with the
conversion executed with packaging claims right combination of claims and ingredients
and marketing support had a greater potential can positively influence consumer perception,
to increase profits. which can both attract new buyers and increase
frequency among existing buyers.3
In all markets, clean label formulations
were conducted in partnership with product
development and marketing, and were inclusive Ingredion solutions
of discussions about marketable claims most
Ingredion has been manufacturing ingredients
valued by consumers that enabled pricing to both
and developing related technologies for 100
cover clean label formulation costs and provide
years. More recently, Ingredion has expanded the
incremental margin. Offering clean label products
portfolio into areas of sugar reduction & plant-
has resulted in higher revenue and margins for
based proteins. As an example of the evolving,
more than half of food companies (see Figure 3).1
holistic approach several years ago Ingredion
set out to improve the gluten-free bread space
Having the right partner and products in
without compromising appeal. The R&D team
your clean label toolbox can save time—
at Ingredion developed a gluten-free, grain-free
and saving time saves money. According
clean label bread with the taste and texture
to the manufacturer study, all markets have
desired by consumers utilizing ingredients
seen a reduction in development time, but
from the broad portfolio. Clean label remains
the opportunity exists for additional savings.1
integral to the corporate strategy as new product
On average, the time required to reformulate
development and strategic growth initiatives
is 5-7 months, with North America having the
expand across ingredients.
shortest average time to market (5.2 months).1

FIGURE 9
Most important packaged food and beverage
ingredient attributes to consumers

81% 80% 79% 74% 73% 73% 71% 69% 68% 66% 66% 65%

l ts / r in rs e c ts g ly
ra ts s ga te be
m
f re ni in on t s
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O- ga ie n ss
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gr va duc
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-n
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s
GM re oc i
/a in
g
in s e r /E ng pr e w re d
al d l e igh s uc l ei al ad g
tu
r c e i a r e R H v e R e d
ab im M d in
Na ur fic p iti ce in ce
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ll y so
ra No No ll y-
a tu ca
N lo

8
What sets Ingredion apart in their ingredient
solutions is the ability to support manufacturers
with the “natural/all natural” claim because its
ingredients have been certified as meeting the
ISO technical specification.4 “Natural” product
attributes and packaging claims are seen as
highly desirable by consumers around the
world. Globally, “Natural/All Natural” at 81%
has the highest of all claims.2 Clean labels and
simple, familiar ingredients support consumer
perceptions of natural.

Creating functional, clean label ingredients to

replicate existing, non-clean label ingredients is
top priority for Ingredion. Specialty categories,
like gluten-free, remain a large area of focus both
in the bakery space and the company. Similarly,
in the beverage space, the main areas of focus
for the industry as well as Ingredion are centered
around plant-based beverages and sport/energy,
flavored water and nutritional drinks.

About Ingredion
The combination of global reach and extensive
knowledge from Ingredion helps you create
authentic foods and beverages that are
formulated with next-level, clean label ingredients
that consumers prefer. Ingredion uses insights
from proprietary research with consumers,
manufacturers and food service operators as the
basis for the conclusions and the strategic
guidance it shares. Coupled with deep
application and formulation experience for
getting more functionality out of fewer, more
recognizable and highly accepted ingredients,
Ingredion is here to support your new
product development and reformulation.

1. Ingredion global Clean Label Manufacturer study, 2021

2. ATLAS, Ingredion Proprietary Global Consumer Research, 2020

3. Ingredion, Customer and Go-to-Market Insights, 2022

4. NOVATION® starches and HOMECRAFT® Create multi-functional flours meet

the definition and technical criteria for natural as outlined by International Get in touch
Organization for Standardization (ISO/TS 19657:2017).

5. Mordor Intelligence, Clean Label Ingredient Market – Growth, Trends, Covid-19 Visit us on our website to find
Impact and Forecast (2021-2026), 2021
out more: ingredion.com
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