2. Challenges and opportunities

2.1 Key challenges
2.1.1 Balancing consumer demands with technical feasibility

While there is a noted growth in consumer appetite for cleaner label products across the Wellness, Personal Care and Food sectors, it is essential to ensure that this demand is strong enough to justify reformulation efforts. The transition to cleaner alternatives in the consumer health space often presents significant technical hurdles, as excipients and other ingredients typically serve specific, important functions in a formulation. Moreover, while consumers may desire cleaner labels, they’re unlikely to compromise on product efficacy. This results in challenges for companies, as they strive to meet clean label expectations without sacrificing the performance and stability that consumers have come to expect from their products.

The effect of clean label on purchase intention is affected by (i) product knowledge/familiarity, (ii) health/safety consciousness, (iii) perceived efficacy, and (iv) pricing and competing products. Media coverage can also drive consumer demand for clean label health products. Publications citing the 2019 article “Inactive ingredients in oral medications” have raised awareness about the potential effects of supposedly inert ingredients. This has prompted consumers to scrutinise product formulations more closely and seek greater transparency in health-related purchases.

2.1.2 Strategy and cost implications

When considering implementation of a clean label strategy there are often assumptions, costs and risks that must be considered.

• Is it technically achievable? Replacing ingredients that have been formulated to confer efficacy, stability and consumer experience benefits often raise technical challenges when replacing with ‘cleaner’ ingredients or excipients.
• Are the associated costs justified? Cost of development and the use of more costly ingredients can contribute to increased capital and cost of goods sold that will need to be justified.
• Will a new product risk product cannibalisation (taking market share from existing products) or brand perception impacts? Launching a clean label product alongside existing brand products, rather than replacing current products, can undermine the quality of the original product line and impact the sales of existing products.

These aspects need to be considered against the potential benefits, including increased payback due to premiumisation of the product, improvements in brand perception, and favourable positioning in a competitive market – all can contribute to an increase in return on investment.

2.1.3 An unclear regulatory space

There are no established regulatory or legal definitions of a clean label. This makes product reformulation a strategic decision, driven by consumer preferences or anticipation of potential future regulatory changes.

This lack of legal definition also makes the regulatory space uncertain and sector-specific. In the food industry, updates to regulations have been introduced against certain ingredients: for example the 2022 ban of the use of titanium dioxide (E 171) as a food colourant by the European Commission. Further, geographical differences exist. As of 2024, the US Food and Drug Administration (FDA) continues to allow the use of titanium dioxide in foods.

Recognisable certifications and general claims can be regulated – for example, organic claims must be certified by an approved UK organic control body in the UK. Others, such as free-from claims, do not have specific regulation and are instead covered under provisions of General Food Law and Good Manufacturing Practice in the UK.

For supplements and over-the-counter drugs, the FDA requires all ingredients to be listed on product labels using their common or usual names. However, ‘clean label’ itself is not regulated. Further, there is not a major regulatory push for ‘clean label’ requirements, and the clean label trend is primarily driven by consumer demand and a response from industry.

2.2 Opportunities for innovation

Clean label can (i) build trust in brand, demonstrating transparency, a perception of safety and a commitment to quality ingredients; (ii) bring in new consumers, attracting health-conscious consumers seeking natural formulations; and (iii) provide market differentiation, with a potential competitive edge, enabling premium positioning.

One particular opportunity for clean label consumer health products is within paediatric and children’s products. Studies have shown that clean label has the highest penetration in child-oriented categories. Further, literature has cited risks with excipients used in cough medicine syrups for children, raising questions about excipients in other over-the-counter and consumer health products.

2.3 Case studies and examples

The consumer health sector is already seeing emerging companies in the clean label space. Genexa markets itself as the first clean medicine company, offering consumer health products across infants & kids, pain, cold & flu, allergy, digestion and sleep & stress.

Other companies incorporate clean label concepts into their company mission and brand identity, such as Blue Buffalo which promises real meat, no poultry by-product meals, and no corn, wheat, or soy. Progresso’s values state that they will not use artificial colours and flavours, and are non-GMO.

Additionally, a number of initiatives are emerging, such as the clean label project – it covers a range of categories, to offer certification, educate consumers and advocate for policy changes. There is momentum in the space, but how should established companies proceed?

3. Navigating clean label

It can be difficult to know how, and whether, to respond the clean label trend. Making these choices presents challenges in many sectors. Innovia specialises in helping companies innovate in such complex topic spaces.

Companies generally have three initial options: re-marketing existing products with new claims, reformulating to alter ingredient compositions, or re-strategising to address consumer needs with innovative ‘clean’ solutions to the fundamental consumer pain point. These approaches provide a framework for effectively adapting to the clean label movement.

Following any of these routes will require careful consideration of the implications for efficacy, stability, consumer perception, product experience and more.

4. A clean perspective

Not all products will benefit from clean label innovation. Innovia’s approach is to assess the consumer, technical and commercial uncertainties and opportunities on a case-by-case basis to find out: Do consumers actually want a clean version of your product? Are you risking cannibalisation or is there sufficient opportunity to capture market from competitors? Where can you find the wins:
re-communication, re-formulation, re-evaluation?