Two years ago, as sales began to decline due to a shift in consumer preferences away from traditional grocery store centers and toward fresh departments, Campbell Soup Company made a significant decision: it would eliminate artificial flavors and colors from all its products. For this 150-year-old manufacturer, this meant a comprehensive review of every soup, sauce, cookie, and salsa in its brand portfolio — which includes Pepperidge Farm, Prego, and V8 — and replacing what had been essential ingredients up to that point. This was no small feat.
“To implement these changes while maintaining taste, quality, and affordability, which are crucial, presents a significant challenge,” Jeff George, Campbell’s head of research and development, shared with Food Dive. “It’s not sufficient to advance one aspect while regressing in another.” Simultaneously, the company was reformulating numerous products to reflect what it termed a “Real Food Philosophy,” while also introducing new products that emphasized health and freshness, along with diverse formulations. This included the Prego Farmers’ Market line of pasta sauces, made with herbs and tomatoes “picked at their peak,” and a new Well Yes! soup brand featuring flavors like sweet potato corn chowder.
Greg Shewchuk, Campbell’s chief commercial and marketing officer, described the company’s recent initiatives as “a thoughtful disruption of our core categories.” The challenge Campbell faces is a familiar one for many CPG manufacturers striving to draw consumers back to the center of the store. They aim to cater to existing customers while attracting new ones, striving to find the right balance between reformulating current products and developing new ones.
So how are manufacturers utilizing product reformulation and new launches as strategies for customer retention and acquisition? Are they favoring one approach over the other to boost sales and consumer interest? Both strategies come with their own sets of risks and rewards. Market research firm IRI reports that over 10,000 new products hit retail shelves each year, with 90% failing to meet their initial objectives. Fewer than ten achieve sales of $100 million or more annually, according to the firm.
Tracking product reformulations is inherently more complex, as companies often conduct these changes behind the scenes, making it difficult to measure their success. However, the Consumer Goods Forum, a global network of over 400 retailers and manufacturers, including Ahold Delhaize, General Mills, Target, and Campbell, reported that 66% of its members reformulated over 180,000 products last year. Common reformulation steps included reducing sodium and sugar, adding vitamins, incorporating whole grains, and phasing out artificial ingredients.
Barb Stuckey, president of Mattson, a firm specializing in new product development, branding, and reformulation, identified two types of reformulations. The first involves changing a product’s labeling and ingredient list, usually to remove unpopular components, enhance the eating experience, cut costs, or improve health profiles. This approach can be costly and labor-intensive, but it often allows for significant product improvements. “With this kind of freedom, you can usually achieve your objective,” Stuckey stated.
The second type involves reformulating within the constraints of an existing ingredient list and labels. This is typically driven by the need to replace an ingredient that has become more expensive or is no longer available. While companies may pursue this method to enhance the eating experience or reduce costs, Stuckey noted that it’s considerably more challenging to achieve results without the flexibility that the first option provides.
Around the same time Campbell announced its commitment to phasing out artificial ingredients and preservatives, General Mills’ cereal division declared it would eliminate artificial flavors and colors from all its products. Last year, the company stated it had successfully removed artificial ingredients from 75% of its cereals and reduced sugar content in many of its kid-focused cereals, such as Trix and Lucky Charms.
General Mills, like Campbell and other CPG companies, aimed to attract health-conscious shoppers without alienating its core customer base. Dana McNabb, president of U.S. retail cereal for General Mills, indicated that their recent changes have successfully attracted customers who were previously deterred by sugar content and artificial ingredients. However, reports suggest that these reformulations have not significantly impacted sales.
General Mills encountered challenges along the way. While it successfully replicated the vibrant colors and flavors of cereals like Trix and Golden Grahams using natural ingredients such as turmeric and annatto (though consumers noted Trix looked too pale), Lucky Charms proved to be a tougher nut to crack due to the complexity of recreating its various marshmallows with natural ingredients. The company hopes to have this line reformulated by the end of the year.
Tom Vierhile, a director at research firm GlobalData, noted that manufacturers frequently use reformulations to strengthen their customer base or win back lapsed customers. However, such decisions must be made with care, as reformulation can sometimes backfire. “People really dislike it when you alter a product they grew up with,” Vierhile remarked.
For General Mills, preserving the taste that consumers expect from brands like Trix and Lucky Charms is crucial, and McNabb emphasized that this remains the primary focus of any reformulation project. Simultaneously, General Mills seeks to tap into new consumer segments, a challenge its core cereal lineup has struggled to address. This need for innovation prompted the company to launch a new cereal brand, Tiny Toast, for the first time in 15 years. “We heard from teens and young adults that there just wasn’t a cereal out there for them,” McNabb explained.
In addition to reaching new consumer demographics, Vierhile pointed out that new product launches can also exploit emerging market opportunities. The snacking category, which has gained popularity as consumers lean toward mini-meals and between-meal snacks, is ripe for innovation. “There’s a whole new category emerging in snacking, and companies are eager to introduce new products to meet that demand,” he said.
For Campbell, new product launches such as Well Yes! and Prego Farmers Market provide opportunities to connect with health-conscious consumers and draw them into the company’s core grocery categories. However, Campbell has faced challenges in this regard, particularly with its Campbell’s Fresh division, which has struggled following acquisitions like Bolthouse Farms and Garden Fresh Gourmet. In the most recent quarter, Campbell’s Fresh sales declined by 6%, while its flagship soups and sauces division experienced a 2% drop in sales.
Despite these challenges, Shewchuk is optimistic that the company is on the right path with its “Real Food Philosophy,” using both reformulation and new product introductions to appeal to fresh-focused consumers. The ambitious goal, according to him, is to bring these consumers back to the center of the store and ensure they continue to return. “We don’t believe the center of the store is dead,” Shewchuk stated. “We believe that we have simply yet to reinvent it.”
In this context, it’s also intriguing to consider products that enhance dietary benefits, such as calcium citrate. What does calcium citrate do? It serves as a calcium supplement that can support bone health, making it a valuable addition for consumers interested in nutrition. The integration of beneficial ingredients like calcium citrate in reformulated products may also contribute to meeting evolving consumer demands for health and wellness, further bridging the gap between modern shopping habits and traditional grocery offerings.