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Transparency: what's Really Inside The Package...and The Company

Consumers want to be better informed. They want to know "what's inside" before they buy. What they want to know, however, extends well beyond product characteristics. Sure, they need information to make purchasing decisions. But the quantity of information does not make a company transparent, the relevance and usefulness of the information does. The term "transparency" can be defined, then, as the amount of quality information a company provides its stakeholders and consumers. Overall transparency has interesting implications for how corporations and brands are marketed.

The Importance of Transparency for Food Marketers

Why should food companies be concerned with communicating openly and clearly with consumers? One obvious occasion is when handling a crisis, such as E. coli contamination. Case studies abound on the aftereffects to companies that were slow to disclose information relating to public health safety. When a company refuses to talk, consumers are left to conclude that the company is hiding something. Secrecy and lack of full disclosure/objective oversight was the chief culprit behind the wave of corporate accounting scandals in recent years.

Transparency, however, can be a potent strategic tool when used to communicate areas of competitive distinction as the following demonstrate:

Core competencies. As an example of how transparency is being used to communicate core competencies in food safety and ingredient quality, McDonald's restaurants recently experimented with offering tours in its European and Asian restaurants, so customers could "see how the food is prepared and what it is made from." In February 2006, the company followed its experimentation with open kitchens by announcing the rollout of a new food packaging program that provides nutrition labels. Commenting on the new packaging in a company press release, Mike Roberts, McDonald's President and COO said:
"We listen closely to our customers and understand how important transparency is to them. That's why we're putting nutrition information right into their hands...Our ongoing efforts to provide menu choice and variety and be an advocate for physical activity are further demonstrated here today."
Values. Transparency can be effective in communicating the values of corporate sustainability. The Timberland Company, famous for its boots, which recently announced that it would be shipping all of its products sometime in 2006 with a "nutrition label" applied to the shoe box. The Timberland nutrition label will apparently define the environmental "footprint" or impact the production of the shoe or boot has had. Commenting on the initiative, which apparently is a first in the retail footwear industry, Jeffrey Swartz, Timberland's President and Chief Executive Officer, said in a company press release:
"As a company, Timberland wants to make it better and the new packaging will do just that...Our goal is to reduce our impact on the environment while engaging consumers to take action. This packaging and labeling initiative should make our industry more transparent and give consumers the information they need to make smart buying decisions."
Relevance. The use of something as commonplace as a nutrition label to communicate both the nutrition profile and the environmental impact that a product has is interesting in both the McDonald's and the Timberland examples: By providing customers with "real inside knowledge" (to something that was formerly secret or unknown) the companies are in a sense democratizing themselves and increasing their potential relevance to consumers, who almost always want to "know more" and in essence, want to see "the real thing." If we can imagine how consumers in the World of Wellness will use these new nutrition and ingredient labels, core consumers will already be familiar with many of the issues and facts behind both the McDonald's and Timberland labels, and have already passed judgment on these brands (for better or for worse). Mid-level wellness consumers will spend time looking for specific triggers that apply to some important element of their lifestyle (e.g., "fat"), and will probably look at the labels repeatedly over time as they switch diets and food preferences, while periphery consumers will not spend a lot of time reading them, unless influenced by a doctor or mass media source.
Authenticity. Authenticity is the ideal antidote to our moral ambivalence due to its ability to instill distinctions with a sense of naturalness - a sense that the distinction in question (which often demands a price premium) is justified because it represents the "the natural way..." "the way things are supposed to be done." The story behind its production and ingredient sourcing (where did we get our raw ingredients and how hard did we work to find them?) can be done in creative and compelling ways. As an example, Stonyfield Farms, provides the now well-known "The Bovine Bugle" a daily blog available on the Stonyfield website that provides "moos" (news) from an organic dairy farmer in Vermont, who has been writing about his experiences since 2004:
"Jonathan Gates reports from Howmars Farm in Franklin, Vermont. Howmars is a certified organic dairy farm, one of many Organic Valley/CROPP Cooperative farmer members who supply the milk that goes into making Stonyfield's yogurts and smoothies. The entire family pitches in on this third-generation farm. Jonathan and his father, Howard, converted the farm from conventional dairy farming to organic 9 years ago."

The Transparency Trend: What to Talk About

The Internet makes it easier than ever for consumers to obtain information on products, brands and companies. They know where to shop for the lowest-priced and best-quality goods and services long before leaving the household. Food marketers could ask themselves whether they are providing the right type of information for various types of consumers and consumer interests.

Transparency has been used to great advantage by brands in the organic and natural foods category where companies will typically showcase:

The relative simplicity of a product's ingredient list,
The unadulterated wholeness of various ingredients or
The straightforward reality of a product's origin.

Transparency is already a significant and likely growing trend within the realms of fresh foods, food labeling, as well as retail settings:

The entire revolution in fresh products is based to some extent on the idea that in order to market fresh products, the first element of competency is the ability to create the aura that the product is still fresh from the farm (or kitchen). Communicating fresh from a transparency perspective implies that customers need to sense that the product has not languished on a shelf for long, or if a food is prepared, that it was made either in front of the customer, or very recently. This means that the more transparently a marketer can communicate freshness, such as using date or time stamps, packaging, and product placment, the more relevant the fresh product will be to customers. The proximity of production or "localness" of the fresh product is also a desirable attribute to list in transparency.
In food labeling, whether or not products are new, reformulated, or the same, there will continue to be strong inclinations to communicate as transparently as possible about various product attributes ("Now with more Whole Grain"), to attempt to correct for what are viewed as former shortcomings ("Now with Less Sugar"), and to very likely shorten ingredient lists.
In retail settings, the inclination to become transparent is led by natural grocery stores who post their "ingredients" for operation and their corporate missions typically on the walls of the stores for their shoppers to absorb. Retailers such as Wal-Mart, which has just constructed its second "environmental store" in Aurora, Colorado, and whose CEO has voiced a corporate focus on sustainability, may in the future post "ingredient labels" that profile the energy saving measures employed by various stores at the front entrance.

Companies that bridge the gap for consumers between information available and the ability to use it effectively will have tremendous advantages in the marketplace. Transparency has broad implications and connotations with respect to a spirit of disclosure and truthfulness to consumers. In this way, a company can use transparency to build trust, a key ingredient in fostering brand loyalty. In the world of lifestyle branding, both corporations and brands are using transparency to communicate what they believe to be their "real" ingredients and genuine values to consumers. While transparency can open a virtual Pandora's Box of issues, (as evidenced by the likes of the aforementioned Enron and WorldCom), innovative companies are not afraid of "what's inside" and make information easily accessible to consumers and stakeholders in useful and even fun ways.

And remember, your consumer is (a) the most sophisticated, savvy and educated in world history and (b) the best connected. The chances are likely that the consumer will know more about your product or service than most within your organization ever will. Don't be afraid to look to your devoted consumers for help or advice.

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