Transparency: The clear route to success in the wellness space?
During the conference's ‘Probiota Pioneers’ debate, startup founders were told by Michael Bush, executive director at Kerry and founder of business growth consultancy Growthways Partners, that any business in the health and wellness space must ensure it is totally transparent.
Mike Rogers, co-founder of the prebiotic fibre-packed breakfast startup brand Eat Troo, agreed transparency is key for any CPG company these days, adding that he aims to make his company a certified B Corporation, meaning meeting the highest standards of public transparency is integral to the way he does business.
Off stage, he told NutraIngredients: “It’s important for any brand in the healthcare market to be transparent to consumers as they are putting their trust in you; they consume your products because they believe they are going to make a difference to their lives.
"It’s especially important when your brand name is ‘Troo’; if we are not open and honest we go against everything our brand stands for."
Caroline Beckman, founder of the probiotic supplement startup Nouri, said she believes that decades of false-advertising and inclusion of unwanted ingredients in products have caused consumers to become increasingly suspicious.
She told NutraIngredients: “In all relationships there is often a gap between expectations and reality. When that gap occurs either trust or suspicion will fill the gap.Transparency is the only way to ensure that we are bridging the gap with trust.
“Now, with the current entrepreneurial and competitive nature of health and wellness markets, transparency is the only undersign language between consumers and businesses."
She adds that consumers do a lot of active research into brands online so this a great place to build communication and trust.
“We meet our consumers with transparency during their 'pre-research' phase, 88% of consumers pre-research their decisions online before making a decision to buy either online or in-stores.
“Our goal is to be clear, concise, and communicative explaining why we are creating products, followed by what we create. If you confuse a customer, you will lose the customer. And advancing consumer health is too important to us to lose the customer.”
EY, the Insights and advice provider, has conducted an independent survey into the subject using more than 2,500 UK consumers.
A staggering 81% of respondents revealed they believe that a company’s behaviour is equally as important as the products it sells and 82% say a clear brand purpose was an important purchase driver.
What’ more, a sizeable 80% have questioned whether to keep purchasing from a brand that has acted improperly and 74% would consider boycotting a brand that they no longer trust.
The research shows that not only will customers avoid brands that don’t support their values but 62% of consumers will act as advocates for brands whose values they support with this stat rising to 79% among consumers aged between 16 and 24.
Perhaps unsurprisingly, trust in a brand’s ethics is most influential for younger consumers, with trust affecting the buying choices of 91% of 16- to 24-year-olds versus only 78% of those over 55.
Values on the grapevine
But will shoppers find out if you don't act in accordance with your ethics? With social media providing the perfect platform for customer reviews, EY argues they 'almost certainly' will.
The report states: "A firm that’s betraying principles will almost certainly be found out as 61% of 25- to 34-year-olds say they would air their grievances with a brand on social media."
However, the research shows that word of mouth still eclipses social media as having an influence on the consumers’ perceptions, with 84% of consumers influenced by word-of-mouth from peers, and 73% influenced by online reviews, compared, to just 35% influenced by social media.
Commenting on the report, Julie Carlyle, partner and head of retail, UK and Ireland Ernst & Young LLP, says: “Companies used to think that they could protect the value of their business and brand by focusing solely on the balance sheet.
"However, with brand equity now also existing in the minds of its customers, employees, suppliers and other stakeholders, the shape of value has changed.
“You need to understand who your key stakeholders are, including suppliers, lobbying groups and employees, what are the outcomes that are important to them, how can you deliver and communicate those outcomes and how are you protecting and growing the delivery of those outcomes to protect and grow your brand.”