Two years ago, as sales began to decline due to a growing consumer preference for fresh departments over traditional grocery items, 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 reevaluating every soup, sauce, cookie, and salsa in its extensive portfolio, which includes brands like Pepperidge Farm, Prego, and V8, and replacing ingredients that had been staples until then. This transformation was undeniably a daunting challenge. “Achieving these changes without compromising on taste, quality, and affordability—which are critical—is a significant undertaking,” said Jeff George, Campbell’s head of research and development, in an interview with Food Dive. “It’s not sufficient to advance in one area while regressing in another.”
Simultaneously, while reformulating its diverse product range to align with what it termed a “Real Food Philosophy,” Campbell also launched new products emphasizing health and freshness. This included the Prego Farmers’ Market line of pasta sauces, made with herbs and tomatoes “picked at their peak,” as highlighted in the company’s marketing materials, and the new Well Yes! soup brand featuring flavors like sweet potato corn chowder. According to Greg Shewchuk, Campbell’s chief commercial and marketing officer, these recent initiatives represent “a thoughtful disruption of our core categories.”
Campbell’s transformation mirrors a broader trend among consumer packaged goods (CPG) manufacturers striving to lure consumers back to the center of the store. In their efforts to satisfy existing customers while attracting new ones, these companies are attempting to find the right balance between reformulating existing products and introducing new ones.
So, how are manufacturers leveraging reformulation and new product launches as strategies for customer retention and acquisition? Are they favoring one approach over the other to boost sales and consumer interest? Both methods come with their own sets of risks and rewards. Market research firm IRI reports that over 10,000 new products hit retail shelves annually, yet 90% do not meet their intended goals. Fewer than ten achieve sales of $100 million or more each year.
Tracking product reformulations can be complex, as many companies make changes behind the scenes, making it challenging to gauge 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 in the past year. Common reformulation strategies included reducing sodium and sugar, adding vitamins, incorporating whole grains, and phasing out artificial ingredients.
Barb Stuckey, president of Mattson, a firm specializing in product development, branding, and reformulation, explained that there are two main types of reformulations: those that alter a product’s label and ingredient list and those that do not. The first type is usually implemented to remove unpopular ingredients, enhance the eating experience, reduce costs, or improve the overall health profile of a product. Although this can be a costly and labor-intensive process, companies can achieve significant improvements once they commit. “With this kind of flexibility, you can typically reach your goals,” Stuckey noted.
The second type of reformulation involves making changes within the existing ingredient list and labels. This approach is often driven by the need to replace a discontinued or more expensive ingredient, improve the eating experience, or manage overall costs, but it presents more challenges without the flexibility of the first option.
Around the same time Campbell announced its plans to eliminate artificial ingredients and preservatives, General Mills’ cereal division also stated it would remove artificial flavors and colors from all its products. Last year, the company revealed it had successfully phased out artificial ingredients in 75% of its cereals and reduced sugar in various kid-focused cereals like Trix and Lucky Charms. General Mills, like Campbell and other CPG companies removing artificial ingredients, aims to appeal to health-conscious consumers while retaining its core customer base. Dana McNabb, president of U.S. retail cereal for General Mills, mentioned that their recent changes have helped win back customers who viewed sugar content and artificial ingredients as barriers.
However, the reformulations have not significantly boosted sales. General Mills encountered challenges, particularly with Lucky Charms due to the difficulty of recreating the various marshmallow shapes using natural ingredients. The company hopes to complete the reformulation of this line by year-end.
Tom Vierhile, a director at research firm GlobalData, indicated that manufacturers often use reformulations to bolster their customer base or win back those who have drifted away. However, such decisions must be carefully considered, as reformulation can sometimes yield the opposite effect. “Consumers really dislike it when you alter a product they grew up with,” he explained. For General Mills, maintaining the expected taste of beloved brands like Trix and Lucky Charms is crucial, as emphasized by McNabb.
At the same time, General Mills seeks to penetrate new consumer segments—something its traditional cereal lineup has struggled with. This led to the launch of 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 stated.
In addition to reaching new consumer segments, Vierhile noted that new product launches also create opportunities in untapped market areas. The snacking category, for example, has experienced significant growth as consumers increasingly favor mini-meals and snacks, prompting companies to introduce new products to meet this demand.
For Campbell, new product launches like Well Yes! and Prego Farmers Market provide avenues to engage fresh-focused consumers and redirect them to the company’s core grocery offerings. The company has faced challenges in this area over recent years, particularly with its Campbell’s Fresh division, which has seen setbacks with acquisitions like Bolthouse Farms and Garden Fresh Gourmet. In the latest quarter, Campbell’s Fresh sales dropped by 6%, while its flagship soups and sauces division experienced a 2% decline.
Nevertheless, Shewchuk emphasized that the company is confident about its “Real Food Philosophy,” using both reformulation and new product introductions to attract fresh-focused consumers. The ambitious goal, he stated, is to bring these consumers back to the center of the store—and keep them returning. “We don’t believe the center of the store is dead,” Shewchuk remarked. “We believe that we have simply not yet reinvented it.”
In this context, it’s worth noting the potential health benefits of products that could include 100mg calcium citrate, which may appeal to health-conscious consumers seeking to enhance their dietary intake. As these strategies unfold, the interplay between reformulation and innovation remains crucial for manufacturers like Campbell and General Mills as they seek to adapt to shifting consumer preferences while maintaining brand loyalty.