Five need-to-know regulations on the agenda to impact the APAC food industry in 2022
India approval of hemp for food set to spur new product development
To the delight of hemp-based product manufacturers in India, the country’s food safety authority Food Safety and Standards Authority India (FSSAI) finally approved hemp seeds and related products for use as food, the first time that hemp products have been recognised as food in India.
Previously, various ‘first generation’ hemp products (hemp seeds, hemp oil, hemp powder) had already been circulating in the country, but were regulated under the Ministry of Ayurveda, Yoga, Naturopathy, Unani, Siddha, Sowa-Rigpa and Homoeopathy (AYUSH) and not recognised as food.
This turn of events has been a long time coming and local industry players are confident that this will boost the Indian hemp sector to unparalleled heights.
“The journey has been a long one, and now we have finally been rewarded, 4.5 years since we first started working with hemp seeds,” Health Horizons CEO Rohit Shah said.
“These new guidelines will help the Indian hemp industry to flourish and grow to be at par for exports to other countries, helping the billion-dollar hemp opportunity in India to grow much faster.”
One of the primary areas where growth is expected is in ‘second-generation’ products, with hemp product manufacturers moving beyond the powders, seeds and oil to develop energy bars, pastas, shakes, chocolates and more.
“Hemp foods revolve around nutrition and sustainability, [traits] that are currently big trends in the F&B sector – the first generation products were already seeing much traction due to their versatility to be used everywhere from beverages to bakery, and now we expect to see more value-added products hitting the market as the regulations have allowed hemp as food,” Shah added.
“The hemp industry is set to grow at an unparalleled scale over the next decade, -and] with this new regulation FSSAI has brought much-needed organisation to the industry [to help it to flourish].
“I also believe there is a need for favourable cultivation policies to support this new regulation though - The socio-economic impact this will have on each individual in the hemp supply chain is significant, and farmers will benefit from better pricing, and consumers will benefit with better quality produce and value added products [if this is done].”
Singapore Nutri-Grade system coming online
While regional sugar tax and related policies have received far less focus in the past year, likely due to COVID-19 related delays, Singapore is set to enforce its new front-of-pack nutrition labels for beverages sold in the country from end 2022.
Called the Nutri-Grade system, beverages will be assigned Grade A to D for free sugar and saturated fat. Grade A corresponds to the lowest sugar and saturated fat, while Grade D corresponds to the highest. The label will be mandatory for beverages with Grades C and D, but voluntary for Grades A and B.
Announced in 2020, manufacturers had two years to reformulate their beverages – with this journey being a long one for manufacturers, according to Food Industry Asia Public Affairs Manager Sabeera Ali.
A 2018 study carried out by FIA found that the 80% of the surveyed companies in Singapore had been actively reformulating to deliver on better nutrition, while maintaining taste.
“While some manufacturers are working on reformulating their beverage portfolios ahead of the Nutri-Grade regulation being implemented, revisions to labels are hardly a simple process that involves significant planning and coordination from multiple internal (designers, marketing, quality, production teams) and external stakeholders (printers, shipping agents, distributors, retailers),” she said.
“The typical process for a label change/addition on a packaged product from artwork design, to the point the product with the new label is reflected on the retail shelf takes a considerable amount of time. This becomes particularly challenging around the festive period whereby closures are expected.
“So although the Singapore Ministry of Health (MOH) and Health Promotion Board (HPB) have made public the specifications of the Nutri-Grade mark, most manufacturers might not be able to confirm the revision of its packaging artwork, until the Amendment Regulations are gazetted and industry guidance documents have been published, as this would be prudent for manufacturers to confirm revisions to packaging artwork, given the cost involved in having to re-print packaging.”
According to the Health Promotion Board: "Since we announced these measures, major manufacturers such as Coca-Cola, Pepsi, Yeos, F&N, Pokka, MDI and Nestle have already reformulated their products to significantly reduce sugar levels. In response, consumers have shifted to buying healthier versions of the products, or smaller pack sizes. These shifts are aligned with international trends in the beverage industry, hence we do not see our labelling measures as hindering overseas brands. We expect to see further reformulation over the next one year, before the measures come into effect."
The measures are expected to be published by end 2021 and come into effect by end 2022.
Health Promotion Board said: "We recognise that the COVID-19 pandemic has resulted in disruptions and companies had given feedback that they needed to reprioritise resources to focus on business exigencies related to COVID-19 and hence the reformulation process has been delayed. Hence, MOH extended the implementation date of the measures, which will provide the industry additional time to comply with the measures and reformulate the products to increase the range and variety of healthier options for Singaporeans."
For retailers, the challenge lies in the current supply chain problems caused by the pandemic. “Due consideration needs to be given to the product import timeline from country X to Singapore. The added complexity from uncertainties significantly shortens the allowable time in which the labels could be updated,” Ali added.
“Managing stock of product in the market at the time of implementation can be challenging given the lack of clarity on how to manage remaining stocks that do not carry the Nutri-Grade label on the distributor or retailer’s end.”
For consumers, without proper nutrition education and awareness campaigns related to the use of the Nutri-Grade label, they might be confused on how the label, alongside the existing nutrition information label and the healthier choice symbol, can help to inform their product purchases.
“They may still revert back to their eating habits despite the changes around labelling regulations,” Ali said.
Beverages graded D in the Nutri-Grade system will also be prohibited from all forms of advertising except at points-of-sale platforms -Ali expressed doubts regarding the efficacy of this, particularly if ‘consumers are already familiar with the products and are likely to purchase such goods, out of habit or routine’.
For brands, having more support from the government would accelerate its healthier formulation efforts. According to healthier product reformulation research FIA conducted in Singapore, 92% of food companies, particularly smaller companies, said they would be encouraged to undertake more R&D to support reformulation if the government offered financial and fiscal incentives.
Dr Benjamin Smith, director at the Singapore Future Ready Food Safety Hub added the focus should not be on reducing any one single item, but rather on how to ensure a well-balanced diet holistically.
“It is clear from a health perspective that we need to be aware of the overconsumption of fats and carbohydrates, and the effects of too much salt,” he said.
“One way to support healthy eating practices could be to create greater overall awareness and interest among the general population to the composition of foods. Improving consumer education is key and this needs to accompany product innovation and community health initiatives.
“Another way is to encourage and support better monitoring of foods available to consumers or food trends. Here labelling like the Nutri-Grade system is a step towards transparency and offers consumers a tool to their food choices; however, this is just one aspect of ensuring a quality diet.”
Plant-based product labelling – different fates in different markets
Whilst the plant-based product trend appears to be rising rather uniformly in most countries across the Asia Pacific region, the same definitely cannot be said for the uniformity of regulations and policies revolving around the governance, or at least guidance, of the sector.
For the plant-based industry in some countries, the news has been fairly positive, such as in Japan where the government announced guidelines for the industry to ‘take the shackles off’ and help it to grow further.
“The plant-based market is expected to reach about US$140bn in sales by 2029, [so Japan needs] to take the shackles off. This is why we have created a Q&A document regarding the labelling rules of plant-based foods for all relevant companies,” Japan ruling faction the Liberal Democratic Party’s Public Relations Chief Kono Taro said.
Importantly, the rules Japan has set are mostly industry-friendly, allowing for plant-based meat and dairy products to use traditional meat and dairy terms such as ‘soy-based meat’ or ‘oat milk’ as long as the plant-based descriptors are clearly indicated on the label.
“Labelling will not be a problem as long as the expressions and terms used are not misleading – so for products made from soybeans, as long as the words ‘soy’ and ‘meat’ are written together, there should be no problem,” said Kono.
“A disclaimer such as the term ‘100% plant-based’ should also be used, but when using this it must be confirmed that all the ingredients used are derived from plants, including any food additives.”
This is similar to guidelines set by China at the end of 2020, which also approved the use of traditional meat and dairy terms for the plant-based sector.
Several other markets have not been quite so lucky though – one of these being India, where the government moved to ban the use of conventional dairy terms such as ‘milk’ for plant-based dairy products in September this year.
According to FSSAI Executive Director (Compliance Strategy) Inoshi Sharma who signed the order for the ban, the regulatory provisions for this in India fall under existing FSSAI regulations.
“This directive is applicable to all [plant-based product firms], whether they are operating online or offline,” she said.
The ban was since stayed after five local companies – Drums Food International, Hershey India, Istore Direct Trading, Rakyan Beverages and Veganarke Enterprises – which manufacture plant-based dairy products attempted to fight back in court and managed to obtain the stay on the ban. Justice Rekha Palli, the judge who issued the stay, described the ban as ‘coercive’.
As of end-2021, the matter is still pending a final conclusion but this hurdle appears to not have deterred various Indian plant-based dairy firms from going ahead and launching new products, such as alt foods which launched its plant-based sorghum, millet, amaranth and oat drink in December 2021. Of note though is that the product is being called a ‘plant-based drink’ which consumers are asked to ‘use it like milk’, perhaps in an attempt to avoid needing to make label changes if the ban goes through.
Down Below, Australia is also having a hard time of it as although there are no formal bans in place, Minister for Agriculture David Littleproud has been less than willing to give the nod to the use of conventional meat and dairy terms for plant-based labelling, even previously hosting roundtables for the plant-based sector to discuss this with meat and dairy industry representatives.
The Ministerial Forum on Food Regulation previously twice declined to change current regulations to ban the use of conventional meat and dairy terms, but earlier this year the Australian government launched a public inquiry into the subject, drawing heated debate from both sides of the fence.
Unsurprisingly, the meat and dairy industry maintained that using conventional terms would be ‘misleading’, whereas plant-based representatives maintained that current qualifiers such as ‘vegie’ and ‘meat-free’ are ‘fit-for-purpose’ with no evidence of consumer confusion.
The public inquiry committee will present its report on or before the end of February 2022, which is likely to again cause a ripple in the industry either way.
South Korea looks to mandate raw material origin labelling for imported foods
Over in South Korea, the government has proposed draft regulations to label the origin of raw materials for all imported agriculture, aquaculture and processed foods. Currently, the country of origin is mandatory for raw materials, but the draft states that additional information on the city, province or prefecture now needs to be indicated.
This draft was first announced in May 2021, following Japan’s decision to release more than one million tonnes of treated radioactive water from the Fukushima nuclear plant into the Pacific Ocean, which was met with criticism from South Korea, China, Taiwan and New Zealand.
"In order to ensure the people's right to know and a safe food consumption, the raw materials of imported agricultural and fishery products are to be labelled with the country of origin respectively, and the method of labelling the country of origin is to be marked with the district name,” stated the draft regulations.
The policy is meant to apply to all imported foods into South Korea, not just Japan, and as of the end of 2021, no updates have yet been made to progress the draft into a formal regulation.
Dr Frank Kim, founder and CEO of SEAH Bio said the draft had been critically associated with the political issues between the South Korean and Japanese governments, urging that this be handled sensitively amid political issues
“While the draft did not specifically call out Japan, the main purpose of this draft was to eliminate imports of Japanese fishery products which may have an adverse effect politically, and may have issues in around the fair trade topic. Due to this reason, this would be handled very carefully,” said Dr Kim.
SEAH Bio is a South Korean-based regulatory consultancy specialising in nutraceutical, pharmaceutical and processed foods regulations.
However, Kim said recently authorities in South Korea have been aggressive in the crackdown of products without mention of the country of origin, especially from Japan – so much so that the fine for violating this has been raised from KRW200mn (US$170,000) to KRW1bn (US$844,000) for businesses responsible for importing products without listing the country of origin.
Japan regulations on food additives coming into effect
In Japan, the local Consumer Affairs Agency announced in 2020 that all additives will need to be declared in a unified way, no matter whether they are natural or artificial, by March 31 2022 - which means that all food and beverage manufacturing companies are given until this date to remove the use of "synthetic" and "artificial" terms on their products’ ingredient list.
These terms are typically associated with additives including sweeteners, colourants, preservatives, flavourings and fragrances.
According to CAA, consumers tend to avoid products labelled with the words "synthetic" and "artificial" when it comes to food additives, with some getting the false impression that these are dangerous, even though they have been certified by the government.
With this new policy, consumers will not be able to distinguish between natural and artificial additives based on the ingredient list alone. But if manufacturers wish to, they can provide more information on the additive used in any section of the product label except the ingredient list, this way consumers can crosscheck if they want to.
The policy was first announced in March 2020, giving companies two years to implement the change. “Quite a number of manufacturers started to voluntarily avoid using "synthetic" and "artificial" on their labels a few years back, hence we believe a lot of them have already completed this transition,” said Hiroyuki Kawai, CEO of Label Bank, a Japan-based consultancy firm.
This change also applies to imported food and beverages, “We believe the number of imported products that are greatly affected by this policy amendment will remain probably low.”