Product labeling has long been used as an avenue for brands to highlight commitments to corporate social responsibility and demonstrate to retailers and consumers that they meet required ethical standards. The advent of the global FAIRTRADE certification and label in the 1990s is perhaps the most prominent, though by no means the only, example of this.
Today, consumers increasingly look to product packaging to find information about brands’ ethical and eco-credentials. Indeed, with an ever-increasing global focus on sustainability, many companies are now exploring new product labeling initiatives which focus specifically on a product’s environmental footprint. However, concerns have been raised that static labeling schemes may offer consumers only part of the picture.
In this article, Rob Ellinor, Program Manager, Domino Printing Sciences (Domino), explores the challenges faced by brands in managing the demands of the eco-conscious consumer and highlights the role that variable data labeling can play in helping to provide a greater wealth of transparent information about products and supply chains.
Growing demand for sustainable goods
In recent years, businesses globally have come under ever-increasing pressure to demonstrate their commitment to sustainability. Major global events like COP26 continue to shine a spotlight on the need for change – and the onus is on brands to demonstrate how they are making a difference. Consumer awareness is also rising, with shoppers pushing for more information to inform their shopping decisions and habits.
The push for sustainability can be seen across fast-moving consumer goods, including food and beverages, personal care, and household cleaning products. Increasingly, brands in these sectors are looking to their product labeling to demonstrate their eco-credentials. For some, this means adopting new eco-conscious labeling initiatives such as the EU Ecolabel or Foundation Earth‘s traffic light labels, which rank the environmental impact of items.
In addition, some brands are choosing to present their own ‘eco scores’ with labeling that demonstrates a product’s total carbon or water footprint. Many large vegan and vegetarian food and drink brands – including Quorn, Oatly, and THIS – now include carbon footprint information as standard, and several global multinational corporations, including Unilever and Nestlé, have voiced ambitions to introduce the same. The Chinese Manufacturers’ Association and the Carbon Trust have also launched a product carbon footprint and labeling scheme for businesses in Hong Kong.
The risk of greenwashing
The rise in sustainability labeling initiatives could be seen as an indication of positive change; however, it has been suggested that some sustainability claims may not tell the whole story. For example, a carbon footprint label only tells the consumer about greenhouse gas emissions but omits overall land or water usage. Equally, while logos can be displayed on food packaging to highlight that meat or vegetables are locally sourced, this doesn’t guarantee that the supply chain is the most sustainable choice. Indeed, when grown out of season, locally grown vegetables may be less sustainable than imported alternatives.
So, is there agreement as to what ‘sustainable’ actually means?
The Food and Agriculture Organization of the United Nations (UN) states that sustainable diets are “protective and respectful of biodiversity and ecosystems, culturally acceptable, accessible, economically fair and affordable; nutritionally adequate, safe and healthy, while optimizing natural and human resources”.
Considering all these factors and the subsequent sheer volume of data that comprises sustainability, many existing, static labeling options will fall short of providing the much-needed assurance of a product’s provenance.
Indeed, the accuracy of information presented to consumers has come under scrutiny in recent years amidst concerns over greenwashing. In 2021, the UK’s Competition & Markets Authority (CMA) published a Green Claims Code aimed at protecting consumers from misleading environmental claims, which could introduce penalties for organizations that are found to be making misleading ‘green’ claims.
Batch-level traceability for sustainability and provenance
Variable 2D codes (e.g., Data Matrix and QR codes), specific to a product’s batch level, could help to provide brands with a solution to overcoming the complexities of sustainability labeling. Consumers and supply chain partners could use these scannable codes to source granular information about products and packaging.
While the ingredients within a product are unlikely to change from batch to batch, the source is likely to vary, being susceptible to supply chain fluctuations and the seasonal availability of ingredients. Brands already collect such batch-level information, but it may not be present on product packaging due to complexities in changing label designs between batches and limited on-pack space.
When the source of product ingredients is variable, 2D codes can facilitate the appropriate sharing of this information. For example, for products containing meat and dairy, a batch-level 2D code could provide information about the farm where livestock was raised, and farming methods used to back up claims such as ‘free-range’ or ‘organic’. This could be taken a step further to provide more granular information about specific batches of raw produce, potentially even homing in on data on individual animals.
By comparison, without a variable data label, brands will inevitably have to display metrics that reflect a worst-case scenario. Take, for example, a packaged food company with suppliers that change based on seasonal availability – certain ingredients will be less polluting at times when they are in season and can be sourced locally, but product labels will need to reflect the times when embedded emissions are at their highest. The only other alternative would be to change the entire product label between varying batches – which would come at a significant cost.
Effective data exchange within supply chains
Across the globe, new initiatives are already emerging that aim to bring more transparency to consumers via 2D codes. In the US, for example, the SmartLabel™ initiative provides scannable QR codes linked to a searchable database that consumers can use to find detailed information about specific ingredients within products. Internationally, the GS1 Digital Link Standard facilitates this capability, allowing brands to include designated sustainability information at the batch or product level within a GS1 Digital Link barcode.
Utilizing batch-level 2D codes allows brands to provide more granular information to consumers and benefits brands by providing more transparency within their supply chains. This increased visibility can deliver the insights needed to run supply chains more efficiently. Variable 2D codes are the key to effective data exchange within supply chains, allowing information to be shared from each step of a product’s lifecycle, from the initial raw material supply to retail sales data.
The same 2D code can also be used to communicate any extra information that might not fit onto a product label, including essential marketing information and campaigns – facilitating deeper customer engagement and longer-term brand loyalty. Brands can provide access to sustainability commitments and policies, or personalized experiences, such as location-specific recycling advice, allowing consumers to check whether packaging is accepted via household kerbside recycling, or locate their nearest recycling point.
Static product labels and environmental ‘eco’ certifications alone cannot meet a modern-day eco-conscious consumer’s ever-changing and increasing information demands. This new breed of discerning consumer requires more.
Variable 2D codes allow the sharing of more granular, transparent information about products, enabling brands to demonstrate the true scope of their sustainability commitments while also providing access to the information needed to run supply chains more efficiently.
As demands for data sharing from consumers, governments, and regulators increase, the importance of batch-level 2D coding will become only more apparent. For those not yet exploring the benefits of variable data coding, the time to act is now.
Want to learn how Domino can help make your brand more eco-concious? Contact Domino North America.