Labelling of the package

Food Preservation Storage

Lesson 15: Packaging, labeling and costing of food products

Labelling of the package

Labeling of package is done to inform the customer about the product, which is present in the package.
Food labeling can be defined as the primary means of communication between the producer and the seller of food on one hand and the purchaser and consumer on the other.

Label is a piece of paper or any other material (such as tag, brand, mark, pictorial or other descriptive method) on which the legend and design concerning the product is printed, stenciled, marked, embossed or impressed on. Label is affixed to a container/article containing the product.
Mandatory labeling requirements of prepackaged foods indicate that every package of food shall carry the following information on the label:

  • Name of the food
  • List of ingredients
  • Declaration of food additives
  • Name and address of manufacturing units/ importer
  • Country of origin
  • Net contents and drained weight
  • Lot/Code/Batch identification
  • Date of manufacture or packing
  • Date marking i.e. Expiry date and Best Before Date
  • Instructions for use

The Gazette of India stipulates that all food products packed should have a label indicating whether it is totally vegetarian or not. A green dot contained in a green square indicates vegetarian origin, whereas, a brown dot in a brown square denotes that the product or ingredients are non-vegetarian.
Apart from these, the Gazette of India stipulates certain additional mandatory requirements on packaged food items. These include quantitative labeling of ingredients and international irradiated foods symbol in close proximity to the name or brand of the food.

Nutrition labeling and nutrition claims:
Nutrition labeling is a description of the nutrient content of a food and is intended to guide the consumer in food selection. It consists of two components namely nutrient declaration, which means a standardized statement or listing of the nutrient content of a food and supplementary nutrition information like serving size, claims etc.
The nutrition label indicates nutritional facts to help find information fast and make general comparison without making a lot of calculations between different food products. The serving size is fixed so that the size of one serving is same for different brands of the same food, which makes comparison easier between different products. The dietary values label contains information regarding overall diet.

Nutrition claims, on the other hand, means any representation which states, suggests or implies that a food has a particular nutritional properties including but not limited to the energy value and to the content of protein, fat and carbohydrates, as well as, the content of vitamins and minerals. The information on ingredients; nutrients as a mandatory part of nutrition labeling, and quantitative or qualitative declaration of certain nutrients or ingredients on the label if required by national legislation are not included under nutrition claims.

Bar coding of food products:
Coding denotes assignment of numerical, alphabetical or symbolic identification mark to containers, packaging material or articles to provide information concerning the qualities of the contents or containers or date, plant or line in which it was manufactured. A common form of coding the packaged food is through bar coding. It is done in the form a Universal Product Code (UPC) or the bar code.
A bar code is a series of bars and spaces arranged according to the encoding rules of a particular specification in order to represent data. Its purpose is to represent information in a form that is machine-readable. The bar codes are printed as labels on packages on consumer packs for laser reading at retail checkouts. This makes the process much easier and faster and avoids the need for individual price labeling of packs and allows itemized bills to be produced for customers.
Bar coding technology is used extensively in the supply chain of goods ready for shipment and as a means of inventory control. For example, corrugated board shipping containers are bar coded to inform the carrier about the destination. A manufacturer’s code is printed on to the containers to identify the factory, the production line and the shift during which the product was made.

Costing/ Pricing of products:
Costing is a process through which we calculate the total cost required in manufacturing and selling a product or service.
A number of inputs are required when any food product is produced. All these inputs involve some kind of expenditure. Therefore, “cost” refers to a measure, which estimates the total value of these inputs in terms of money.

Types of Costs:
All costs incurred in running any entrepreneurial activity can be classified into two types:

  1. Fixed costs
  2. Variable costs

Fixed costs
They are the overhead costs which are fixed for a certain amount of production whether there is full capacity utilization or part of it. It does not vary with scale of production. Cost of machinery, rent, and interest on loans are expenditures that are constant irrespective of the scale of production and hence they are called fixed costs.

Variable costs
They are directly related with production and vary as the scale of production increases and decreases. The cost per unit decreases as more and more number of units are produced. The cost of raw materials, transportation and labour costs etc. vary as the production quantities vary, hence they are called variable costs.

When selling a product, make sure you make enough profit to cover both fixed and variable costs.

Total cost of the product= Fixed cost + Variable cost

Break-even point
It is the process of estimating “point of no profit and no loss” commonly known as break-even point. The break even point tells us about how many products one must sell to cover his costs.

Fixed Cost
Break-even Point = -----------------------------------------------

Selling Price – Unit Variable Cost

Last modified: Thursday, 15 March 2012, 9:26 AM