Yuka, the “People’s FDA”

One of the things I think about a lot is the future of regulations. It would be easy to blame my time in the insurance industry, but my interest was sparked much earlier in my career. At that time, I worked in the health and fitness industry and my work was called ‘research and development,’ rather than ‘innovation.’ Since the work itself hasn’t changed, I assume the shift in terminology was prompted by people who don’t understand that innovation comes from research and development.

For better or worse, maneuvering a business around regulations is a very fun exercise in creativity. In fitness, many saw the joy (or at least the opportunity) in creating workarounds. In insurance, I often see regulations used as an excuse to avoid progress.

This morning’s TBOY Podcast episode, “He went to Walmart,” was on fire. It introduced me to a dramatic shift in diamond economics and to the rise of an app that’s allowing people to enact their own regulations on the food and beauty industries. Additional sources for this post include Who Can You Trust by Rachel Botsman and the Yuka website.

THE “PEOPLE’S FDA”

With Yuka, you scan a product’s barcode, and the app scores it from 0 to 100 based on its healthiness.

Nutritional quality accounts for 60% of the score, additives for 30%, and official organic status makes up the remaining 10%. Before listening to this morning’s podcast, I’d never heard of Yuka, although I do use a similar app called Vivino, which scores wine based on “yumminess.” While Yuka started with food products, demand has expanded into the beauty industry.

What’s truly fascinating about Yuka isn’t just its reach, but how it’s enabling faster regulation, acting kind of like the “people’s FDA.” This is all thanks to one simple feature: the feedback button. It automates messages directly to food companies, requesting changes to their product’s ingredients.

One button, pressed by up to 68 million people, is flooding big food brands with unsolicited feedback on the formulas of their products. Companies including Chobani and Campbell’s soup have already changed their products because of Yuka user requests.

RATING SYSTEMS AND THE TRUST SHIFT

More and more, consumers rely on ratings. As the power of ratings grows, the legitimacy of traditional regulatory authorities will have to adapt or risk losing relevance.

In her 2017 book, Who Can You Trust, Rachel Botsman argued that trust in large political and financial institutions is eroding in the digital age, weakening consumer confidence with every secret revealed, misconduct exposed, and rumors spread.  She believed that trust is undergoing a dramatic shift, moving away from a top-down relationship with established institutions toward horizontal trust relationships enabled by rating systems.

Working for a Fortune 250 insurance carrier, I have quoted this book more times than I can count. One of my go-tos is, “People who know they are being rated by others, become more trustworthy.”

Yuka’s rise makes a compelling case for Rachel Botsman’s suggestion that ‘institutions were never likely to survive the age of digitalization’ in their traditional form. As people scan products and share assessments, they create a collective, transparent database, that builds product transparency. Making her prediction that technology will allow us to ‘dispense with third parties and institutions entirely’ feel closer than ever.

DISRUPTING TRADITIONAL AUTHORITY

Consumers are expected to navigate decision-making across complex industries for themselves and their families. The predominate solutions to this growing problem have been regulatory bodies and brand promises, both of which fall short. Many brand promises are false, and regulatory agencies are often slow, understaffed, and overburdened.

I hope Yuka’s influence on the food industry signals a real shift in trust from brand promises and slow regulators to peer evaluations and true product transparency. It’s certainly pressuring companies to be more directly accountable and responsive to the people they serve.

Of course, that pressure is heavily influenced by Yuka as the rating vehicle. As a B Corp, Yuka is accountable not only for profits but for public benefits and it does not accept advertising from food companies. Instead, Yuka earns revenue through a paid app version, book sales, and a calendar for tracking when vegetables are fresh.

The product scores are transparent and align with European food regulations, WHO guidelines, and international scientific studies. They also give a bonus to products with official organic labels.

The concern with a corporation like Yuka augmenting or challenging regulatory bodies – even through consumer involvement – is intention. But greed lives in government as well as business, and I’ll take the speed of market-driven change over the stagnation of policy any day.

Ultimately, while Yuka has power, it’s also giving a fair amount of power to consumers. And this power is sparking on-demand change.

The voice of the customer was never meant to be just a box to check in product development. It’s not a ‘best practice,’ it’s an essential practice. If you don’t listen to your customer when you’re designing your product, you’ll be forced to listen in the marketplace or through regulatory action.

QUESTION

Leaders should start asking these questions to prepare for impact:

• While everyone should listen to customers, experts know what to listen for, especially in relation to product and message development. Is my company listening to customers? Do people at my company know what to listen for or do they need help?

• Am I prepared to build authentic relationships that foster trust without relying solely on brand promises? Is the rest of my company?

• What if an app like Yuka was created to target my industry? How would financial products and services get scored? What about education or healthcare?

• How could the rise of third party ratings change customer trust and expectations in my industry?

• Yuka is essentially bringing European regulatory standards to America. As regulations sync up across geographies, how can my company adapt it’s regulatory and compliance strategies?

• Is my company’s current regulatory and compliance strategies adaptable enough to meet increased consumer scrutiny?

• What opportunities exist to leverage transparency and customer feedback to differentiate my company?

• What operational changes are needed to respond quickly to customer feedback? What cultural changes are needed?