The Health Star Rating system and small business are a number of potential benefits, opportunities, costs and risks to small businesses in adopting the HSR system. Adoption depends critically on industry awareness and overall attitude towards the system. While most businesses appreciate the intent of the HSR system, few believe that it will be effective in influencing consumer purchasing decisions. Evaluation framework for understanding small business impacts An evaluation framework was developed on consultation with the Victorian Government and industry representatives. The framework sought to identify potential benefits, opportunities, costs and risks arising at different phases of adoption for the HSR system as shown in chart 3.1. — Benefits and opportunities In the implementation businesses with products that are already would be expected to ‘healthy’ benefit from the additional validation provided by the HSR system. These same businesses may be able to harness this as an opportunity to expand their consumer base, using a high HSR as a marketing tool. In the medium to long term, businesses may be able to realise greater benefits by reformulating products to obtain higher ratings. and risks The cost impact of the HSR system is expected to be highest during the implementation phase, when initial investments in calculating ratings and changing label design will need to be made. Some risks to adoption are likely, such as the potential impact on brand value. In the medium to long term, the nature of risks will most likely evolve to risks of non-adoption. As consumers adapt to the HSR system and come to expect it, businesses that do not adopt may be negatively perceived, resulting in a loss of market share. Assessing impact strength The drivers of impact of the HSR system on small businesses will change over time. In the implementation phases, businesses’ capability to effect the labelling change and the incremental change that is needed to comply along with the actions of their competitors are likely to drive — — adoption. In the medium to long term, increasing consumer awareness of the HSR system may influence businesses further.
The Health Star Rating system and small business are a number of potential benefits, opportunities, costs and risks to small businesses in adopting the HSR system. Adoption depends critically on industry awareness and overall attitude towards the system. While most businesses appreciate the intent of the HSR system, few believe that it will be effective in influencing consumer purchasing decisions. Evaluation framework for understanding small business impacts An evaluation framework was developed on consultation with the Victorian Government and industry representatives. The framework sought to identify potential benefits, opportunities, costs and risks arising at different phases of adoption for the HSR system — as shown in chart 3.1. Benefits and opportunities In the implementation businesses with products that are already ‘healthy’ would be expected to benefit from the additional validation provided by the HSR system. These same businesses may be able to harness this as an opportunity to expand their consumer base, using a high HSR as a marketing tool. In the medium to long term, businesses may be able to realise greater benefits by reformulating products to obtain higher ratings. and risks The cost impact of the HSR system is expected to be highest during the implementation phase, when initial investments in calculating ratings and changing label design will need to be made. Some risks to adoption are likely, such as the potential impact on brand value. In the medium to long term, the nature of risks will most likely evolve to risks of non-adoption. As consumers adapt to the HSR system and come to expect it, businesses that do not adopt may be negatively perceived, resulting in a loss of market share. Assessing impact strength The drivers of impact of the HSR system on small businesses will change over time. In the implementation phases, businesses’ capability to effect the labelling change and the incremental change that is needed to comply — along with the actions of their competitors — are likely to drive adoption. In the medium to long term, increasing consumer awareness of the HSR system may influence businesses further.
HSR%20system%20for%20small%20business.docx