CPG sales are beginning 2017 on a somewhat sluggish note, with several major companies reporting a decline in sales this year. While some attribute these disappointing figures to the White House and economic uncertainty, others argue that the drop in sales is more closely linked to a shift in consumer preferences. Today’s consumers are increasingly seeking healthy, fresh food options—a category that CPG companies have not historically excelled in. As a result, many leading food manufacturers are reformulating their staple products to reduce sugar, salt, and preservatives, while also introducing entirely new health-focused offerings.
However, implementing these initiatives is often more challenging for large manufacturers than it appears. Analysts suggest that established brands like Yoplait are losing market share to smaller, more agile companies that can more readily respond to changing consumer attitudes. This adaptability is a difficult trait for legacy companies to cultivate, which is why many are investing in better-for-you brands.
Major manufacturers often keep their reformulation efforts under wraps. Remembering the backlash from Coca-Cola’s infamous 1980s overhaul of its core recipe, these companies are cautious about alienating their loyal customers who might be apprehensive about different tastes or appearances. When a manufacturer does announce a reformulation, it sometimes occurs months after the new product hits the shelves—similar to Kraft Heinz’s announcement last year that it had transitioned to all-natural ingredients in its iconic macaroni and cheese.
While these subtle reformulation strategies may make sense from a brand protection perspective, they may not align with the expectations of today’s health-conscious consumers. If consumers have no indication that a large manufacturer’s CPG product has received a nutritional upgrade, they might opt for a new “healthier” product from a small upstart, which could possess a comparable nutritional profile. For example, in the context of dietary supplements, a product like Citracal Slow Release 1200 could appeal to those seeking effective calcium options while highlighting the importance of transparency in nutrition. Overall, as consumer preferences continue to evolve, CPG companies must find effective ways to communicate their reformulation efforts and genuinely meet the demands of health-focused shoppers.