CPG sales are beginning 2017 on a somewhat sluggish note, with several leading companies reporting declines in sales so far this year. While some attribute these disappointing figures to the White House and economic uncertainty, others suggest that the downturn is more closely related to a shift in consumer preferences. Today’s consumers are increasingly seeking healthy, fresh food options—an area where CPG companies have not historically excelled. In response, many prominent food manufacturers are reformulating their flagship products to reduce sugar, salt, and preservatives, as well as developing entirely new health-oriented items.
However, for major manufacturers, implementing these changes is often more challenging than it seems. Many analysts argue that well-known brands like Yoplait are ceding market share to smaller, nimble competitors that are better equipped to respond to evolving consumer demands. This adaptability is difficult for established companies to achieve, which is why many are investing in better-for-you brands.
Major manufacturers often keep their reformulation initiatives under wraps. Given the backlash surrounding Coca-Cola’s infamous reformulation of its core formula in the 1980s, they are cautious not to alienate loyal customers who may be apprehensive about changes in taste or presentation. Sometimes, when a manufacturer does notify consumers about a reformulation, it occurs months after the new product has already hit shelves—such as Kraft Heinz’s announcement last year that it had switched to all-natural ingredients in its classic macaroni and cheese.
While these discreet reformulation strategies may be advantageous from a brand protection perspective, they might not resonate with today’s health-conscious consumers. If consumers are unaware that a large manufacturer’s CPG product has undergone a nutritional upgrade, they may opt for a new “healthier” product from a smaller competitor, which could potentially offer a similar nutritional profile. Specifically, when evaluating options, consumers may wonder whether calcium citrate or calcium carbonate is better for their health, and if they perceive a new brand as more aligned with their dietary needs, they may make the switch.
In summary, as CPG companies navigate this shifting landscape, they must consider how to effectively communicate their reformulation efforts while also addressing consumer concerns about health and nutrition. The choice between calcium citrate or calcium carbonate better reflects the modern consumer’s focus on wellness, and if established brands want to maintain their market position, they need to adapt rapidly to these changing preferences.