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B2B Explore insights impacting the B2B environment, including production and supply network, and the trends that are evolving the global consumption of ingredients and packaging materials across a changing consumer goods marketplace.

Consumers in Charge as Mars Finally Submits to Artificial Colour Demands

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The recent announcement that Mars will begin the removal of artificial colours from its global range of human food and beverage products is perhaps the biggest indication yet of the role consumer pressure plays in the move away from artificial additives. While other companies have made similar changes proactively, in an attempt to alter consumer perception of their brands, Mars, the seventh largest packaged food company globally, has been forced to act, both due to the actions of the competition and to quell increasing consumer unrest. Previous Euromonitor International articles have suggested that such change is inevitable for large packaged food companies, bearing in mind the increased influence of the clean label movement, and the shift will take time, with over 7,000 tonnes of synthetic colours consumed in US packaged food alone in 2014. But in light of its staunch defence of the safety of artificial colours in the past, Mars appeared particularly resistant to change. Mars’s declaration could signify that the industry has reached the point where consumers rather than companies dictate the transition to clean label.

Industry developments force Mars to act

When Hershey and Nestlé unveiled plans to phase out artificial additives to differing degrees in February 2015, consumers called for Mars to follow suit. Instead Mars declined to commit, stating that it was exploring natural alternatives but also emphasising the safety of artificial colours. In the year since, consumers have not backed down, with a petition asking Mars to remove artificial dyes on the website change.org, receiving over 200,000 signatures. US consumers also pointed out that in the EU, Mars products had already phased out artificial colours, due to the impact of the Southampton Study, reflected by the fact that 80% of Western European colour use in confectionery in 2015 came through natural colours, compared to just 26% in the US. This somewhat undermined Mars’s argument that the complexity of switching to naturally sourced colours was delaying the removal of artificial colours. Against the backdrop of a stream of companies joining Nestlé and Hershey in committing to clean label as 2015 progressed, the position of disaffected consumers has grown stronger, and Mars reached the conclusion that continued use of artificial colours is not possible.

Making up for lost time

The all-encompassing nature of Mars’s announcement is somewhat surprising. By committing to the incremental removal of artificial colours from its entire range of global human food products over the next five years, it has gone further than many other companies, which have focussed on the US market, where the impact of clean label has been especially strong and where 51% of global packaged food synthetic colour consumption occurred in 2014. By doing this Mars has ensured it is a step ahead of the competition and in a strong position, should the clean label trend become a stronger force in developing markets. Additionally, by rejecting artificial colours so completely, Mars can claw back some consumer credit, which it may have lost through its initial hesitance to change.

Compliance brings fresh challenges

Mars’s submission raises a number of questions for the company and the industry as a whole. Groups like the Center for Science in the Public Interest will regard Mars’s decision as a victory; however, they are likely to question whether the confectionery giant goes far enough. Some consumers may want to see Mars follow Nestlé and remove caramel colours and demand for a move away from artificial flavours and preservatives is likely. Similarly controversial ingredients like Polyglycerol polyricinoleate (PGPR) will remain, with over 900 tonnes of this ingredient being consumed in global confectionery in 2014, a category in which Mars is the market leader. Whether the action on colours satiates consumers or instead gives them the encouragement to push Mars further will be intriguing. Companies like Mars that feel there is no alternative but to remove artificial ingredients also face the challenge of how to deal with the increased production costs which use of natural substitutes inevitably brings. Consumers are increasingly expecting natural colours to be included as standard, meaning increased unit prices or reductions in product size are unlikely to be easily accepted. This all points to a loss of control for manufacturers, which need to be seen to be taking action as delay will invite discontent and they may face the prospect of playing catch up like Mars.

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