CPG sales are kicking off 2017 on a somewhat sluggish note, with several major companies reporting declines in sales thus far this year. While some attribute these low figures to the current political climate and economic uncertainty, others contend that the dip in sales is primarily linked to a shift in consumer attitudes. Today’s consumers are increasingly seeking healthy, fresh food options—a category that CPG companies have not historically dominated. As a result, many leading food manufacturers are reformulating their staple products to include less sugar, salt, and preservatives, while also introducing entirely new health-oriented items.
However, these initiatives are often more complex than they appear for large manufacturers. Analysts suggest that established brands like Yoplait are losing market share to smaller, agile companies that are better equipped to respond to evolving consumer preferences. This adaptability is challenging for legacy brands, which is why many large companies are investing in better-for-you brands.
Major manufacturers frequently keep their reformulation efforts under wraps. Given the backlash from Coca-Cola’s infamous attempt to revamp its core formula in the 1980s, they are cautious not to alienate loyal customers who might be apprehensive about new tastes or appearances. For instance, when Kraft Heinz announced last year that it had transitioned to all-natural ingredients in its iconic macaroni and cheese, this was communicated months after the product had already hit the shelves.
While such discreet reformulation strategies are understandable from a brand protection perspective, they may not resonate with today’s health-conscious consumers. If there is no clear indication that a large manufacturer’s CPG product has undergone a nutritional upgrade, consumers might opt for a new “healthier” product from a smaller brand, which could very well have a comparable nutritional profile. For example, products enhanced with calcium citrate powder are gaining popularity, and if larger brands fail to communicate their nutritional improvements, they risk losing market share to these innovative alternatives.
In conclusion, as consumer preferences evolve towards health and wellness, CPG companies must not only reformulate their products to include beneficial ingredients like calcium citrate powder but also effectively communicate these changes to their audience to remain competitive in the marketplace.