Wednesday, 27 August 2008

Tories fudge their first Nudge?

There is an interesting piece in the FT today that includes a bit about the Tories’ proposed approach to food labelling. Here’s the relevant bit:

Its proposed deal rejects the “traffic light” system of labelling foods for fat, sugar and salt content, favoured by the Food Standards Agency and used by some supermarket chains.

The Tories will commit to stopping government promotion of such traffic light labelling. Wednesday’s deal backs the rival “guideline daily amounts” (GDA) system championed by, among others, Unilever.

Given how much noise the Tories have been making about behavioural economics and social psychology this is a pretty weak decision. So much for their faith in Nudges.

As the article states, there are two different food labelling systems currently in operation. The ‘traffic light’ system provides colour-coded guidance on the salt, sugar, fat etc content of each product. So a something high in fat will get a red bar or segment for fat, but if it is low in salt will get green for that, and so on. This system is backed by the Food Standards Agency. More info about it here.

The other system is the Guideline Daily Amounts (GDA) system. Here the product comes with a label that calculates the amount of, say, fat a product contains as a percentage of the recommended daily intake. So each product provides a series of percentages. This system is backed by a group of food and drinks companies such as Unilever, Coco Cola, Tesco etc. More info about this system here.

Now which system do you think is actually more likely to influence consumer behaviour? One that states percentages, or one that is based on a colour code system?

Personally speaking I've experienced both and have a pretty clear view. I quite often get my lunch from Tesco, which operates the GDA system. I’ve got used to checking the percentages on the GDA labels. I guess I’m fairly health conscious so I might be slightly more likely than average to regularly check. Sometimes we get shopping in from Sainsbury's, which opertates the traffic light system. In this instance you really don't need to check, the colour coding gives you an obvious steer.

As a customer I definitely find the traffic light system easier. In addition it makes a difference to how you approach particular choices. In the colour code system I'm not going to even pick something up if it's got a lot of red on it - unless it's a treat. (Incidentally me and Mrs Tom already refer to a Sainsbury's label on product like a dessert that has all or mostly red on it as a Wheel of Death (!) so it's an easy system to get used to).

With the GDA system I have to pick something up and look at the numbers before considering whether to buy it or not - I suspect just having picked something up makes us more likely to buy it since we feel in some way it is ours.

Then I have to consider how the percentage stated will fit in with what I expect to eat later, and as such whether it will take me 'over the limit' in a given category. Again this might conflict with how we actually plan. I might tell myself it's OK to get the product with more fat at lunch because I will eat healthily in the evening. But when I get to the evening will I still feel the same way?

There's also a problem with the way that servings are dealt with. I noticed recently on the GDA labels the percentages don’t necessarily tally up with the content of the product. The GDA label may refer to, for instance, percentages for a typical 100g serving, whereas the packet you have in your hand might be 250g. I noticed this on a can of soft drink recently where the difference between the two figures would have been pretty dramatic as you can imagine.

I would suggest that a lot of people won’t even bother looking to see if the GDA label refers to the specific quantity of the product they are buying, they will assume it does. I didn’t spot this for a while, and I’m enough of a geek to be interested. In addition even if you do bother to check that means you are going to have to work out the actual percentages yourself. So to find out if what you are buying is healthy or not you will have to do a calculation. Most of us won’t find it difficult – though some will - but it’s another level of unnecessary complexity.

I think the traffic light system works on the same basis (ie the figures presented are based on a certain size serving) but that doesn’t affect the colour coding, which illustrates that the product has a high, medium or low amount of sugar, salt, etc.

Looking ahead you can see how the traffic light system could also be developed to increase its effectiveness. The size of the label could be increased, so everyone can easily see if you're clocking up a lot of Wheels of Death. In addition your receipt could include a little summary comparing you to the average consumer.

Taking all these factors into account, I would suggest that the traffic light system is going to be far more influential in improving consumer understanding (and helping consumers make healthier choices if they want to) than the GDA approach. The former seems to me to be quite obviously the better 'nudge'. Given all the recent Tory rhetoric this seems a particularly craven sell-out to that part of the food and drinks industry that is afraid of informed consumers.


CityUnslicker said...

the traffic light system is better as you say clearly; but not favoured by Tesco's et al because it threatens their revenues with lower sales.

I don't mind having the competing systems. One will win out in the market and not having traffic lights will hinder those organisations who choose to follow this path.

So no real problem here?

Charlie Marks said...

The point, Cityunslicker, is that the Tories want the government to stop supporting the traffic light system - which is clearer. Despite this, they're going on about how obese people should be more responsible for their weight - but with the position they are taking on food labelling, the Tories don't want to help people find out what's in their food.

The GDA system is useless - no one I know can fathom it.

Tom P said...

There are a couple of problems here. One, as Charlie says, is that the Tories have said they will get rid of the traffic light system in favour of the GDA one. So they won't let the two systems compete.

But in any case what's the rationale for letting one company provide less helpful information than another? It provides no market pressure for those operating the GDA system to produce healthier food.

Bill Quango MP said...

Why the Tories decided against the traffic light system is a mystery.
It would have fitted much easier into the take responsibility yourself narrative.

Not usually one to believe in conspiracy theories but maybe Tesco have a little too much financial and political clout to upset, Sainsburys are the opponents grocer...

Who really knows.

Tom P said...

yes exactly Bill. perhaps its a temporary tactic to keep Tesco onside, they can always ditch the policy after a review/consultation. but in the meantime they've given people like me a stick to beat them with.

odd decision all round. perhaps Tory MPs haven't been reading Nudge over the summer like they were told to!

Mrs Blogs said...

mmm..yum... did someone mention fudge?

seriously, though, totally agree that when i go shopping, and I've done alot of it in my time, the 'traffic lights' system is much easier to follow than the gda one, having to reckon up all those percentages! Fancy having to engage in a heavy bout of mental arithmetic with carrying a babe and a screaming toddler hanging off your arm. The GDA info is still provided elsewhere on the packaging with the traffic lights so you kind of get two nudges for the price of one. A quick visual reference point is much more effective. I'm sure if consumers were asked they would agree one has to ask why the objections to it?