Two years ago, as sales dwindled due to consumers shifting away from the center of grocery stores toward fresh departments, the Campbell Soup Company made a significant decision: it would gradually eliminate artificial flavors and colors from all its products. For this 150-year-old manufacturer, this meant thoroughly examining every soup, sauce, cookie, and salsa within its brand portfolio — including Pepperidge Farm, Prego, and V8 — and replacing ingredients that had been essential until then. This was no small feat. “Transforming our products without compromising on taste, quality, and affordability, which are crucial, presents a monumental challenge,” stated Jeff George, Campbell’s head of research and development, in an interview with Food Dive. “It’s not sufficient to excel in one area while regressing in another.”
As the company revamped its extensive product line to align with what it termed a “Real Food Philosophy,” it also introduced new offerings that featured health and freshness indicators and diverse formulations. This included the Prego Farmers’ Market line of pasta sauces made with herbs and tomatoes “picked at their peak,” as per the company’s marketing, and a new 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 reflects a common story among many consumer packaged goods (CPG) manufacturers aiming to draw consumers back to the center of the store. They are striving to meet the needs of their existing customer base while also attracting new consumers, working to find an equilibrium between reformulating current products and creating new ones.
So, how are manufacturers leveraging reformulation and new product launches as tools for customer retention and acquisition? Moreover, are companies leaning towards one strategy over the other to boost sales and consumer engagement? Both approaches present their own set of risks and rewards. Market research firm IRI reports that over 10,000 new products hit retail shelves annually, yet 90% fail to meet their objectives, with fewer than ten achieving annual sales of $100 million or more. Tracking product reformulations is more complex since companies usually make these changes discreetly, making it difficult to assess their success rates. However, the Consumer Goods Forum, a global network of over 400 retailers and manufacturers, reported that 66% of its members reformulated more than 180,000 products last year.
Reducing sodium and sugar were among the most frequently reported reformulation strategies by CGF members, along with adding vitamins and incorporating whole grains. Companies also indicated efforts to phase out artificial ingredients. Barb Stuckey, president of Mattson, a firm focused on new product development, branding, and reformulation, pointed out two types of reformulations: those that alter a product’s labeling and ingredient list, and those that do not. The first type is typically initiated to remove unpopular ingredients, enhance the eating experience, reduce costs, or improve a product’s health profile. Although this can be resource-intensive, once companies commit, they generally have significant leeway to enhance the product.
In contrast, the second type involves reformulating within a product’s existing ingredient list and labels. According to Stuckey, this is often driven by the need to replace an ingredient that has become costly or is no longer available. Companies may also pursue this route to improve the eating experience or overall costs; however, without the flexibility offered by the first option, achieving desired results becomes much more challenging.
Around the same time Campbell announced its commitment to eliminating artificial ingredients and preservatives, General Mills’ cereal division also stated its intention to 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 levels in many of its kid-oriented cereals like Trix and Lucky Charms. Like Campbell, General Mills aims to attract health-conscious consumers while maintaining its popularity with core customers. Dana McNabb, president of U.S. retail cereal for General Mills, noted that these recent changes have helped win back customers for whom sugar content and artificial ingredients were deterrents. However, reports indicate that the impact of these reformulations on sales has been modest.
The company faced challenges, particularly in recreating the vibrant colors and flavors of cereals like Trix and Golden Grahams using natural ingredients, such as turmeric and annatto, although consumers expressed dissatisfaction that Trix appeared too pale. Lucky Charms proved even more difficult due to the various marshmallows that were challenging to replicate using natural ingredients. General Mills hopes to have this line reformulated by the end of the year.
Tom Vierhile, a director at research firm GlobalData, noted that manufacturers often use reformulations to strengthen their customer base or win back those who may have drifted away. However, these decisions require careful consideration, as reformulation can sometimes have unintended consequences. “People are often unhappy when you alter a product they grew up with,” Vierhile remarked to Food Dive. For General Mills, preserving the flavors consumers expect from brands like Trix and Lucky Charms is critical, and is the primary metric for any reformulation project, according to McNabb.
Simultaneously, General Mills seeks to tap into new consumer segments—a challenge for its traditional cereal lineup. This pursuit led 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 simply wasn’t a cereal catering to them,” McNabb explained.
In addition to exploring new consumer segments, Vierhile highlighted that new product launches can also open up new market opportunities. The snacking category, which has experienced robust growth as consumers gravitate toward mini-meals and between-meal snacks, is increasingly becoming a hotspot for innovation. “A whole new category is emerging in snacking, and companies are eager to introduce new products to meet this demand,” Vierhile stated.
For Campbell, new product launches like Well Yes! and Prego Farmers Market present opportunities to engage fresh-focused consumers and encourage them to explore the company’s core grocery categories. Shewchuk acknowledged that the company has faced hurdles in this endeavor, particularly with its Campbell’s Fresh division, which has seen setbacks with acquisitions like Bolthouse Farms and Garden Fresh Gourmet. In the most recent quarter, Campbell’s Fresh sales declined by 6%, while the flagship soups and sauces division experienced a 2% sales drop.
Nonetheless, Shewchuk expressed confidence in the company’s direction with its “Real Food Philosophy,” using both reformulation and new product launches to attract fresh-focused consumers. The ambitious goal 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 concluded. “We believe we just haven’t reinvented it yet.” This approach may also incorporate elements like ccm calcium, aiming to enhance the nutritional profile of the products while appealing to health-conscious shoppers.