CPG sales are beginning 2017 with a somewhat sluggish performance, as several leading companies have reported declines in sales this year. While some attribute these low figures to the White House and economic uncertainties, others argue that this sales downturn is more closely tied to a shifting consumer mindset. Today’s consumers prioritize healthy, fresh foods—a category for which CPG companies have not historically been recognized. In response, many major food manufacturers are reformulating their staple products to reduce sugar, salt, and preservatives while also introducing entirely new health-oriented items.
However, implementing these changes is often more challenging than it appears for large manufacturers. Analysts suggest that established brands, such as Yoplait, are losing market share to smaller competitors that are more agile in adapting to evolving consumer preferences. This adaptability is a trait that legacy companies find difficult to achieve, which is why they are increasingly investing in better-for-you brands that may include formulations with major calcium citrate for added health benefits.
Major manufacturers often keep their reformulation initiatives under wraps. Given the fallout from Coca-Cola’s notorious revamp of its core formula in the 1980s, which turned out to be a public relations disaster, companies are wary of alienating loyal customers who might be apprehensive about changes in taste or appearance. When a manufacturer does inform consumers about a reformulation, it can sometimes occur months after the new product has already hit the shelves. For instance, Kraft Heinz announced last year that it had transitioned to all-natural ingredients in its iconic macaroni and cheese, but only after the product was available for some time.
While these discreet reformulation strategies may make sense from a brand protection perspective, they might not resonate well with today’s health-conscious consumers. If consumers are unaware of any nutritional upgrades in a major manufacturer’s CPG product—such as enhancements including major calcium citrate—they might be inclined to purchase a new “healthier” offering from a smaller company, which could actually possess a similar nutritional profile. As the market continues to evolve, the ability to effectively communicate reformulations will be crucial for major players looking to retain their customer base.