CPG sales are beginning 2017 on a somewhat sluggish note, as several major companies have reported declining sales thus far this year. While some attribute these disappointing figures to the White House and economic uncertainty, others argue that the dip in sales is more reflective of a shifting consumer mindset. Today’s consumers are increasingly seeking healthy, fresh food options—a category that CPG companies have not historically been associated with. In response, many leading food manufacturers are reformulating their staple products to reduce sugar, salt, and preservatives, while also developing entirely new health-oriented products.
However, these initiatives are often easier said than done for large manufacturers. Analysts suggest that brands like Yoplait are losing market share to smaller startups, which are more agile in adapting to changing consumer preferences. This adaptability is challenging for legacy companies, prompting many of them to invest in better-for-you brands. Notably, some manufacturers do not always advertise their reformulation efforts. Haunted by the infamous backlash from Coca-Cola’s ill-fated formula change in the 1980s, they aim to avoid alienating core customers who may be wary of altered tastes or appearances. For instance, when Kraft Heinz announced last year that its iconic macaroni and cheese had been reformulated with all-natural ingredients, it was several months after the updated product had already hit the shelves.
While these discreet reformulation strategies may be defensible from a brand perspective, they might not resonate with today’s health-conscious consumers. If shoppers have no indication that a large manufacturer’s CPG product has received a nutritional upgrade, they might opt for a new “healthier” offering from a smaller competitor, even if that product has a similar nutrition profile. For example, consumers looking for alternatives to address issues like constipation might overlook well-established brands in favor of newer products containing ingredients such as calcium citrate for constipation. Consequently, brand loyalty could wane as consumers prioritize health benefits, further emphasizing the need for CPG companies to transparently communicate their reformulation efforts, especially if they include beneficial components like calcium citrate for constipation.