18th January 2016 was D-day for food and beverage businesses selling products in New Zealand and Australia to comply with Standard 1.2.7 regulating nutrition and health claims.
It couldn’t be more timely, with New Zealand’s food industry on a high. The health foods and health-giving foods sector is booming here and offshore, but with that comes a responsibility to assure consumers and our export partners of the high standard of New Zealand’s products.
The Standard, as outlined by Food Safety Australia and New Zealand (FSANZ) and enforced in New Zealand by MPI, covers what you can claim about the presence or absence of a particular nutrient or substance, for example specific vitamins, omega 3, salt, sugar or gluten content. Also, any health claim (essentially a food health relationship), must now be pre-approved and with acceptable nutritional profiles. I am sure you would be able to pinpoint times spent standing in a supermarket aisle questioning a very fanciful statement about a product's health giving properties. Well, now times are changing. This is good for the industry, consumers, and New Zealand's overall economy.
For a country that sells itself on reputation and quality, I see it as ironic then that we’ve been lagging behind on initiatives that regulate nutrition and health claims, with jurisdictions like Canada and Europe streets ahead. And while there has been a generous, three-year lead up to comply with the Standard, there are still plenty of products that will still fall short because their nutritional and/or health claims don’t comply. But on the flip side, I cannot stress how excited I am, seeing the plethora of foods that satisfy the requirements to make truthful and commercially beneficial claims on their products. There is real opportunity here for businesses.
But getting your claims right (both from a compliance and commercial view) can be tricky, and there is certainly a lot of valuable intellectual property at play. To make any health claim, you first will need to meet the necessary nutrient scoring profile (essentially, is it healthy enough overall?), and then there are defined thresholds to meet specific health claims. Arguably, selling a product with a targeted health claim is easy to achieve on its own (take spinach, for example), but when you want to develop a high value product with a desired sensory perception profile and shelf life stability, suddenly the end product can turn out to be a real winner, boosting your company's profile and earnings. Even better, the health or nutrition claim can be strategically built into your overall branding and story, and if you can get this right, you're away laughing.
So, businesses should be looking at this as an opportunity rather than a hurdle. The new standard offers a new option for nutritionally focused F&B companies to identify, secure and maximise their competitive edge – we see it as essentially a new form of a regulated intellectual property (IP) right unique to the food industry. Trustworthy health claims should allow a premium charge on a product, and as an asset this can contribute to alternative revenue streams such as licensing agreements and exit strategies.
Of course, there is the risk that you could push the opportunity too far, so it is important you seek advice. For instance, in relation to calcium, under the new standard a general level health claim could be “calcium is necessary for normal teeth and bone structure”, or a high level health claim – “calcium reduces risk of osteoporosis" (assuming you meet the specific conditions). Yet, there is a very fine line, because you are not allowed to go so far as say "calcium prevents osteoporosis", because this is deemed a therapeutic health claim - not currently allowed. So companies need to tread carefully about what they can actually say, while also fairly attracting consumers to the health benefits of their products.
It’s good news for exporters as the new regulations bring New Zealand in line with international standards. Continuing to build our reputation on the world stage for quality produce, rigorous health claims act as a point of difference in an otherwise crowded market.
I would think one of the key assets to put you head and shoulders above your competition would be securing what is called a “self-substantiated” health claim for a high value food. Once the health claim is substantiated, your company retains exclusivity of use, and the scientific evidence submitted during the approval process remains confidential as a trade secret. That is seriously powerful IP. Certainly the self-substantiation process is a rigorous one, but often companies have already done much of the trials needed, and provides evidence their product will have a clear market differentiator.
At first, it might seem like splitting hairs, but regulated health claims will become big business. The Kiwi companies that aren’t on board with the new standards will not only be risking their reputation and MPI's wrath, but will miss out on commercial opportunities. This is a game changer for the industry, and saying we are excited for the future would be an understatement.