The Rise of Clean Label Foods

Consumers are increasingly focusing on not only what goes into their food, but also how it’s produced. Underpinning this is the rise of the clean label movement, which emphasizes foods made with simplicity, transparency, and natural origins. Recent years have witnessed significant growth of clean label foods, driven by consumer demand for products that cater to specific dietary needs as well as those that meet ethical and health standards. While there is no regulatory or legal definition for clean label in the US, for many people it involves the following concepts:

• Natural ingredients: no artificial flavors, artificial colors, artificial preservatives, or synthetic additives.
• Transparency: information on how ingredients are sourced and how products are manufactured.
• Minimal processing: processing techniques that prioritize food safety, nutritional benefits, and food quality.

Clean label in the US can be traced back to the natural and organic food movements of the 1960s and 1970s, when consumers began voicing concerns about the safety and healthfulness of food production. Emerging from this was the clean label movement in the 1980s and 1990s, which prioritized the use of simple, natural, and recognizable ingredients in food labels while avoiding artificial and chemical additives. From the 1990s forward, specific production processes (non-GMO), product lines catering to dietary requirements (gluten-free; dairy-free; nut-free), and foods “free from” inputs (hormones, pesticides) emerged under the umbrella of clean label.

Unlike passing food fads in the US — think of the rise and fall of fat-free foods or the hype around alt-protein startups in recent years — the evolution of clean label products represents a fundamental shift in the food industry, fueled by conscientious shoppers and the growing number of dietary restrictions among consumers. Adding to this are recent reports on the dangers of ultra-processed foods — research suggests that ultra-processed foods can act like addictive substances, raising the risk of mental health problems. Some scientists are proposing a new mental-health condition called, “ultra-processed food use disorder.”

Brands and product formulators that emphasize transparency, “whole” ingredients, and simplicity are well-positioned to grow with the rise of the clean label movement. In a 2024 study by Acosta Group, nearly 8 out of 10 shoppers stated that clean label is important or very important for their purchasing decisions. The shopper sentiment carried over to the checkout line, with clean label sales outperforming total store sales by a CAGR of 8% versus 6%, respectively, over four years according to NIQ. Other consumer research reveals that shoppers are willing to pay more for products made with ingredients they recognize and trust.

For brands and product formulators, the path to success within the clean label movement may take different forms. Examples include:

• Food manufacturers are investing in R&D and collaborating with ingredients suppliers to source new, natural alternatives – from functional starches to plant-based proteins sourced from peas, lentils, and beans.
• Private label brands, with their proximity to customers and nimble product development capabilities, are adapting to consumer demands. For example, US grocer Hy-Vee has its Clean Honest Ingredients label, which eliminates more than 200 artificial ingredients.
• Brands that offer products with inherently simple ingredients, like traditional dairy items, are attracting clean label shoppers and gaining trust through transparency in their storytelling.

Recent years have produced several notable mergers and acquisitions, as larger food corporations look to expand their portfolios and capitalize on the growing demand for clean label food and beverage products. Large corporates have acquired smaller brands with specific clean label attributes, leveraging their innovation and customer base. For example, in Q1 2025 Flowers Foods announced its acquisition of Simple Mills, a maker of better-for-you snacks. Private equity firms have also shown increasing interest, drawn to the segment’s high growth potential. Several transactions with financial buyers have occurred in recent years, including private equity firm CapVest Partners acquiring Second Nature Brands, a producer of better-for-you snacks and treats, in 2024.

Buzzwords abound in the food industry and trends come and go. But with the enduring nature of clean label foods and its growing market, there are significant opportunities in the US for brands and formulators to enhance their market position, build stronger relationships with customers, and command premium pricing for their products.

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