Most Australians notice the five-star labelling, but 40% of people don't have a good understanding of the system, according to a nationally representative survey commissioned by CHOICE.
It's meant to reveal how healthy a processed food is against the other products in its category, says David Gillespie, the federal assistant health minister.
"Where people get confused is when they see, say five stars on a muesli bar and less stars on a different food product, but it's not used to compare different food groups across the whole supermarket.
"If you're buying a muesli bar, buy a muesli bar with the most stars. The more stars, the healthier."
Gillespie worked as a doctor for more than three decades and is quick to point out the system does not apply to healthier foods, such as fruits and vegetables, but rather aims to improve the nutritional value of processed foods.
Evidence suggests it's working. More than 5500 products voluntarily participate in the health star rating system, accounting for almost half of all processed foods. Having products in the same category compete on the basis of nutritional value has seen manufacturers, in some cases, formulate healthier recipes.
"Food producers and processors don't want their competitors to have four or five stars, and they've only got one," Gillespie tells us in an interview. "So it's working with a big carrot incentive, rather than a big stick."
The awareness campaign was welcomed by CHOICE, says Matt Levey, director of content, campaigns and communications.
"People need a clear way to cut through marketing spin in the supermarket to find genuinely healthy options. Health star ratings give people the information they need about products when they need it most.
"Now, the scheme needs to be rolled out by more companies on more products."
Problem foods are slipping through the cracks, testing people's confidence in the system, says Levey, as people may see a nutritionally poor product with a high star rating and mistake it for being healthy.
"Right now, Nestle is claiming that Milo gets a 4.5 star rating, but this is only possible when just three teaspoons of the delicious chocolate dirt is mixed with the healthy option of skim milk. This kind of manipulation of the ratings scheme shouldn't be allowed."
But only 34% of people surveyed take Milo with skim or light milk, compared to the 55% who mix it with full cream, deeming the star rating ineffective for the majority.
Potato chips and Paddle Pop ice creams also receive a high health star rating, cashing in a 'health halo' that does not reflect their nutritional value.
Changes may be made once the system has been in practice for enough time, says Gillespie.
"If they kept tweaking it every time someone finds anything seen as an anomaly, the whole system would break down.
"Any adjustment would happen at the end of the review period. It's up for review after five years."
The system will help lower disease and obesity rates in Australians. According to the Australian Bureau of Statistics, more than 60% of Australians aged 18 years and over are overweight or obese.
"Being overweight and being obese is a big problem for the nation," he adds.
"People who are overweight have many more chronic diseases and put themselves at risk of nasty cancers.
"So we want Australians to be eating more nutritious food and that's what the health star rating does."