Two years ago, as sales began to decline with more consumers shifting away from the center aisles of grocery stores in favor of fresh departments, the 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 thorough review of every soup, sauce, cookie, and salsa within its extensive portfolio, which includes brands like Pepperidge Farm, Prego, and V8, replacing key ingredients that had been staples until then. This was not an easy undertaking. “Transforming our products without compromising on taste, quality, and affordability, which are critical, is a significant challenge,” said Jeff George, Campbell’s head of research and development, in an interview with Food Dive. “We cannot afford to advance in one area while regressing in another.”

At the same time Campbell was reformulating its products to adhere to what it termed a “Real Food Philosophy,” the company also introduced new products that emphasized health and freshness. Among these were the Prego Farmers’ Market line of pasta sauces made with herbs and tomatoes “picked at their peak,” and the 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 strategies as “a thoughtful disruption of our core categories.”

Campbell’s efforts are part of a broader trend among consumer packaged goods (CPG) manufacturers aiming to draw consumers back to the center of grocery stores. These companies strive to meet the needs of existing customers while also appealing to new ones, seeking the right balance between reformulating existing products and launching new ones.

But how are manufacturers leveraging reformulation and new product launches as strategies for customer retention and acquisition? And are they prioritizing one method over the other to boost sales and consumer interest? Each approach carries its own risks and rewards. Market research firm IRI reports that over 10,000 new products hit retail shelves annually, but a staggering 90% fail to meet their sales targets. Fewer than ten achieve sales of $100 million or more each year.

Tracking product reformulations is more complicated, as companies often make changes behind the scenes, making it challenging to measure their success. However, according to the Consumer Goods Forum, a global network of over 400 retailers and manufacturers, including Ahold Delhaize, General Mills, Target, and Campbell, 66% of members reported reformulating more than 180,000 products last year. Common reformulation steps included reducing sodium and sugar, adding vitamins, and incorporating whole grains, as well as phasing out artificial ingredients.

Barb Stuckey, president of Mattson, a firm specializing in new product development and reformulation, explained that there are two types of reformulations: those that alter a product’s labeling and ingredients list and those that do not. The first type typically involves removing unpopular ingredients, enhancing the eating experience, cutting costs, or improving the health profile of a product. This process can be costly and labor-intensive, but it allows companies significant room for improvement. “With this kind of freedom, you can usually achieve your objective,” Stuckey told Food Dive.

The second type focuses on reformulating within the existing ingredients and labels. Stuckey noted this is often driven by the need to replace an ingredient that has become too expensive or is no longer available. While companies may pursue this route to enhance the eating experience or reduce costs, it is generally more challenging to achieve desired outcomes without the flexibility of the first option.

Around the same time Campbell announced its intention to eliminate artificial ingredients and preservatives, General Mills’ cereal division declared it would also remove artificial flavors and colors from all its products. Last year, the company reported successfully phasing out artificial ingredients in 75% of its cereals and reducing sugar in many kid-focused cereals like Trix and Lucky Charms. Like Campbell, General Mills aimed to attract health-conscious shoppers while maintaining its appeal to core customers. Dana McNabb, president of U.S. retail cereal for General Mills, noted that these changes helped win back some customers who had previously avoided the products due to sugar content and artificial ingredients, although reports indicated the impact on sales was moderate.

General Mills faced challenges, for example, recreating the vibrant colors and flavors of cereals like Trix and Golden Grahams using natural ingredients such as turmeric and annatto, while consumers expressed dissatisfaction with Trix appearing too pale. Lucky Charms presented a unique difficulty due to its various marshmallows, which were tough to replicate with natural ingredients. The company anticipates having this line reformulated by the end of the year.

Tom Vierhile, a director at research firm GlobalData, stated that manufacturers often utilize reformulations to strengthen their customer base or reclaim those who have drifted away. However, these decisions require careful consideration, as reformulation can sometimes backfire. “People really dislike it when you alter a product they grew up with,” Vierhile explained to Food Dive. For General Mills, maintaining the expected taste of brands like Trix and Lucky Charms is critical and the most important metric in any reformulation project, according to McNabb.

Simultaneously, General Mills seeks to penetrate new consumer segments, a goal its traditional cereal lineup has struggled to achieve. This led the company to introduce 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 shared.

In addition to targeting new consumer segments, Vierhile highlighted that new product launches can also tap into unexplored market opportunities. The snacking category, which has seen significant growth as consumers opt for mini-meals and between-meal bites, is becoming increasingly popular for innovation. “There’s a whole new category opening up in snacking, and companies are eager to launch new products to meet that demand,” Vierhile remarked.

For Campbell, new product introductions like Well Yes! and Prego Farmers Market provide avenues to engage health-conscious consumers while guiding them back to the company’s core grocery categories, according to Shewchuk. Yet, the company has faced challenges in this endeavor, 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 the flagship soups and sauces division also experienced a 2% decrease.

Nonetheless, Shewchuk remains optimistic, asserting the company has the right strategies and focus with its “Real Food Philosophy,” using reformulation and new product launches to appeal to fresh-focused consumers. The ambitious goal is to not only draw these consumers back to the center of the store but also to ensure their return. “We don’t believe the center of the store is dead,” Shewchuk stated. “We believe we just haven’t reinvented it yet.”

In this evolving landscape, products like Solgar Calcium Magnesium Citrate with Vitamin D3 may also play a role in meeting the demands of health-conscious shoppers. By integrating such health-oriented products into their offerings, companies can further enhance their appeal to consumers who prioritize wellness in their purchasing decisions.