Proposed Food Labeling Changes to Have Significant Impact

With the extended comment period recently closed on the proposed food labeling rules issued by FDA in early March, the onus is now back on FDA to review the comments and develop the final rules. The two proposed rules (“Food Labeling: Revision of the Nutrition and Supplement Facts Labels” and “Food Labeling: Serving Sizes of Foods That Can Reasonably Be Consumed at One-Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments”) will become regulatory requirements 60 days after publication of the final rules, and the industry will have two years for compliance.

While that may seem like plenty of time and a bit far out to be of concern (particularly with FSMA’s revised Preventive Controls and Produce Safety rules expected any day), the impacts that these new labeling rules are likely to have on your business merit discussion and advance preparation. The key changes to food labeling that the rules will bring are:

Revision of the Facts Labels Rule. If enacted as proposed, the primary changes will be those which better emphasize the information FDA sees as significant to consumer health:

• Formatting: This includes such changes as calories font size increases; calories from fat is removed; servings per container font is increased and placed above serving size; percent of daily values is moved to the left side of the label; and carbohydrates is changed to total carbs.
• Nutrients: Added sugars must labeled; daily reference values for dietary fiber increase to 28g; sodium decreases to 2300mg.
• Vitamins & Minerals: Must be listed in quantitative amounts in addition to the percent daily value, with the some unit changes (e.g., IU to mg); vitamin D and potassium are required; and vitamins A and C are voluntary.

Revision of the Serving Size/RACC Rule. If enacted as proposed:

• Containers that have less than 200% of the Reference Amounts Customarily Consumed (RACC) must be labeled with a dual-column Nutrition Facts Panel (NFP).
• The dual-column label represents a single serving size and the whole container.
  
   

Benefits and Detriments.

According to FDA’s Federal Register notice, the rules have been proposed to “help convey clear and accurate information on serving sizes and the related nutritional profile of foods, which is important for consumers to be able to make choices that support a more healthful diet.”

FDA also sees benefits of the dual-column facts panel as no longer requiring consumers to calculate nutrition information for the full container if eaten in a single sitting, while still providing single-serve information for those who do not consume the entire container or who share the product. Thus, consumers will be able to make better choices about nutrition, with updates based on chronic disease.

While we see these as viable assertions, we have to question FDA’s statement that its new consumption data is based on more recent science. We don’t see data from 2003 and 2008 (the data years on which FDA based its rules) as being recent science when there is more current data available, such as USDA’s 2010 Dietary Guidelines—as well as its pending 2015 guidelines, which could potentially impact Daily Values (DV) and Referenced Daily Intake (RDI). We have to wonder if this or other recent science was taken into consideration by FDA. If it was, it was not noted in the FDA publications.
 

Impacts on Industry.

As part of the rule-making process, FDA provides an estimate of costs to industry for new rules. For the two labeling rules, it considered relabeling, reformulation, and recordkeeping costs, and estimated a total cost to industry of $1.7 billion. We see this, however, as being grossly underestimated, and not fully taking into consideration manufacturers’ need for:

• Time to update policies and procedures, and educate and train employees on the new regulations.
• Potential costs to upgrade labeling software tools, or update specifications for a third-party label provider.
• Updating of each nutrition facts panel (NFP).
• Potential changes to the principle display panels (PDP), as a nutrient content claim (NCC) may have to change or require a new disclaimer.
• Reformulation of products, such as to remove “added sugar” If that is the only realistic course of action for a product.
   

Each of these examples will require a great deal of effort and costly new label printing plates, all of which will likely add up to more than the estimated 1.7 billion cost to industry.

Take, for example, the addition of “added sugars.” If you are marketing a juice to kids and you claim 13g sugar today, tomorrow you will have to claim 11g of that as “added sugar.” Will you reformulate? Has the FDA expected that such “minor” changes would only require the manufacturer to undergo a label change charge, when in reality, this should have been assigned as a reformulation charge if one considers the reality of business.

We also see a significant impact being wrought by the added real estate that will be needed on the label for the required dual-column facts panel. Particularly on smaller, single- to dual-serve containers, this will leave little space for marketing and vignettes intended to grab the consumers’ attention, as well as for other required information. The new product labels may be very busy. And potentially more costly. Busy labels may be harder to read and thus more likely to be ignored, so we have to wonder if the proposed changes will actually achieve the desired effect on public health.
 

Prepare for the Rules.

With the impact that these rules will have on your labeling and the face of your brand, it is advisable to begin evaluating the rules against your products and preparing for the change. And, while you are doing so, if you sell your products in Canada , be sure to check out the label changes recently proposed by Health Canada. Many are similar to those of the U.S., but require additional resources to ensure a thorough understanding of presentation and content for label compliance.

To begin preparing now for the new labeling rules:

1. Start reviewing and understanding your label inventories.
2. Develop a project plan determining how many labels you will need to convert, the time and resources needed for each, and whether this can be managed in-house or will it need to be outsourced.
3. Determine the timing needed for any label software updates and/or the capacity of your external label provider.
4. Manage this transition so it is seamless to your customers to help maintain the face of your brand.
5. Review your label management programs regularly.