Two years ago, as sales dwindled due to a growing number of consumers shifting away from the central 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 the 150-year-old company, this meant thoroughly reviewing every soup, sauce, cookie, and salsa within its portfolio of brands—including well-known names like Pepperidge Farm, Prego, and V8—and substituting what had previously been essential ingredients. This was undoubtedly a daunting task. “Transforming our products without compromising on taste, quality, and affordability—which are crucial—poses a substantial challenge,” stated Jeff George, Campbell’s head of research and development, in an interview with Food Dive. “It’s insufficient to advance in one area while regressing in another.”
As the company revamped its numerous products under what it termed a “Real Food Philosophy,” Campbell also introduced new offerings that highlighted health and freshness, as well as diverse formulations. This included the Prego Farmers’ Market line of pasta sauces made with herbs and tomatoes “picked at their peak,” according to marketing materials, and the Well Yes! soup brand featuring flavors like sweet potato corn chowder. Greg Shewchuk, Campbell’s chief commercial and marketing officer, described these recent initiatives as “a thoughtful disruption of our core categories.”
Campbell’s transformation mirrors a familiar story for many consumer packaged goods (CPG) manufacturers striving to draw consumers back to the center of the store. These companies are attempting to balance the needs of their existing clientele while attracting new customers by reformulating established products and introducing new ones.
So, how exactly are manufacturers employing reformulation and new product launches as strategies for customer retention and acquisition? Are they prioritizing one approach over the other to boost sales and consumer interest? Both strategies entail inherent risks and rewards. Market research firm IRI reports that over 10,000 new products hit retail shelves annually, with 90% failing to meet their objectives. Fewer than ten achieve annual sales exceeding $100 million, according to the firm.
Tracking product reformulations can be more complex since companies often make adjustments behind the scenes, making it difficult to measure their success rates. 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 more than 180,000 products last year.
The most frequently reported reformulation steps included reducing sodium and sugar, adding vitamins, and incorporating whole grains. Companies also mentioned initiatives to phase out artificial ingredients. Barb Stuckey, president of Mattson, a firm specializing in new product development, branding, and reformulation, identified two types of reformulations: those that alter a product’s labeling and ingredients list, and those that do not.
The first type typically aims to eliminate unpopular ingredients, enhance the eating experience, reduce costs, or improve a product’s overall health profile. Although this can be costly and labor-intensive, once companies commit, they have considerable leeway to enhance the product. “With this flexibility, you can usually achieve your objectives,” Stuckey noted.
The second type involves reformulating within a product’s existing ingredients list and labels, often prompted by the need to replace an ingredient that has increased in price or is no longer available. While companies may pursue this route to improve the eating experience or overall costs, Stuckey emphasized that without the “wiggle room” provided by the first option, achieving results can be significantly more challenging.
Around the same time Campbell announced its initiative to phase out artificial ingredients and preservatives, General Mills’ cereal division revealed its plans to eliminate artificial flavors and colors from all its products. Last year, the company indicated it had successfully removed artificial ingredients from 75% of its cereals and reduced sugar content in many of its kid-focused cereals like Trix and Lucky Charms.
General Mills, like Campbell and other CPG companies undertaking similar initiatives, aimed to appeal to health-conscious shoppers while retaining their core customer base. Dana McNabb, president of U.S. retail cereal for General Mills, shared that their recent changes have successfully attracted back some customers who were deterred by sugar levels and artificial ingredients. However, reports indicate that the impact of these reformulations on sales has been modest.
The company faced challenges as well. While it successfully replicated the vibrant colors and flavors of cereals like Trix and Golden Grahams using natural ingredients like turmeric and annatto (though some consumers complained Trix looked too pale), Lucky Charms presented a significant hurdle. The diverse marshmallow shapes proved difficult to recreate with natural ingredients, but General Mills aims to reformulate the line by year’s end.
Tom Vierhile, a director at research firm GlobalData, stated that manufacturers often utilize reformulations to strengthen their customer base or to win back those who have drifted away. However, these decisions require careful consideration, as reformulation can sometimes backfire. “Consumers can be very resistant to changes in products they grew up with,” Vierhile said.
For General Mills, maintaining the expected taste of brands like Trix and Lucky Charms is critical and serves as the primary benchmark for any reformulation project, according to McNabb. Simultaneously, General Mills seeks to penetrate new consumer segments—something its traditional cereal lineup has struggled to accomplish. This 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 told Food Dive.
In addition to targeting new consumer segments, Vierhile noted that new product launches can tap into emerging market opportunities. Snacking has gained popularity as consumers increasingly seek mini-meals and between-meal bites, creating room for innovation. “A whole new category is emerging in snacking, and companies are eager to introduce new products to meet that demand,” said Vierhile.
For Campbell, new product launches such as Well Yes! and Prego Farmers Market present opportunities to engage with health-conscious consumers and draw them back to the company’s core grocery categories, as noted by Shewchuk. However, the company has faced challenges in this endeavor, particularly with its Campbell’s Fresh division, which has seen acquisitions like Bolthouse Farms and Garden Fresh Gourmet struggle. In the most recent quarter, Campbell’s Fresh sales declined by 6%, while its flagship soups and sauces division experienced a 2% sales drop.
Despite these challenges, Shewchuk expressed confidence in the company’s focus on its “Real Food Philosophy,” leveraging reformulation and new product introductions to appeal to fresh-focused consumers. The goal is ambitious: to bring these consumers back to the center of the store and ensure their continued loyalty. “We don’t believe the center of the store is dead,” Shewchuk asserted. “We believe we just haven’t reinvented it yet.”
In this context, one potential product that could serve as a Citracal alternative in the market might align with these health-focused initiatives, offering consumers new options while maintaining nutritional benefits. By continuing to innovate with new products and reformulations, companies like Campbell can better meet evolving consumer preferences and restore interest in their core grocery categories.