What does carbon impact look like on a food label?
Carbon labels communicate a product’s impact on climate change, similar to how Nutrition Facts communicate a food’s impact on your health.
Food labels communicate information to customers. Labeling claims such as organic, low-fat, or ethically sourced convey not only a product’s attributes, but also its values. The reason someone purchases ethically sourced food is to act on who they are and what they value. Marketing using food labels isn’t new. The carbon label, however, is fairly new. A carbon label denotes how much carbon dioxide is released to the atmosphere throughout a product’s life cycle, as a proxy for climate impact. It could someday function similar to a Nutrition Facts label, informing customers on environmental impact instead of nutritional content.
Companies using the carbon label
Tesco, a supermarket in the United Kingdom, piloted an early example of carbon labeling in 2011. This effort, according to the Financial Times, was discontinued relatively quickly because it took too much labor to create and confused customers. This is not the landscape of 2021. Sustainability-focused packaged food brands, like Oatley and Quorn, and restaurants, like Just Salad, introduced carbon information to their labels this year. There is some indication that this practice is mainstreaming. According to GreenBiz, both Panera Bread and Chipotle have announced carbon labeling schemes for their products. Unilever, a multi-national consumer goods company, plans to add carbon information to the labels of all of the company’s 70,000 products, according to Bloomberg Green. There’s indication that the market is more ready for this information than in years past.
How is a product carbon labeled?
Carbon labeling can be complex. Each stage of a supply chain produces carbon dioxide. A completely accurate label would capture carbon emissions related to commodity production, intermediate processing, end-product manufacturing, all transportation, consumer use, and product disposal. Currently, there is no one standard to get this number. There are, in fact, many calculation methods and hundreds of certification options from consulting companies, like the Carbon Trust, according to the Financial Times. A carbon label from two different companies produced today could look very different. One may measure only end product manufacturing and transportation to market. Another may quantify more of the whole lifecycle cost - from suppliers to disposal. A label could list the units of carbon dioxide themselves or simply include a statement like “low carbon impact product.”
What’s important, beyond the number, is communicating the validity of a carbon label claim to skeptical consumers. A Mintel survey, accessible via subscription, found that 46% of U.S. consumers are skeptical about brands’ social responsibility initiatives, while 42% believe brands only use these initiatives to make money. A carbon label claim is stronger if it can be substantiated.
What are the challenges?
- Producing a carbon label can be an expensive task. It entails analyzing a lot of data or paying for a certification from an established metric.
- Carbon labels don’t yet truly resonate with consumers. There are many questions on what these are. These labels don’t mean something to the consumer yet in the same way that regulated Nutrition Facts labels do as a purveyor of information.
- Consumers can’t yet make brand-to-brand comparisons of carbon labels. These labels are new to the marketplace. This makes it harder for those consumers who understand carbon labels to act on their impulse and make low impact purchases. There’s not enough information to make an informed choice between products if, for example, only one product within a category lists carbon information.
Carbon labeling is an opportunity for food companies to differentiate their products and communicate value to their shareholders. The food product label; however, is complex in regulatory requirements and marketing implications. Consider partnering with the Michigan State University Product Center to access Nutrition Facts labeling services to ensure regulatory compliance. The MSU Product Center is an organization that brings together on-campus expertise in the sectors of food, agriculture, and natural resources to help entrepreneurs define and launch innovative products. Field-based innovation counselors advise entrepreneurs on business planning, regulatory requirements, and product development needs. To access business development assistance, select the “Become a Client” button on the MSU Product Center website or send an email to email@example.com.