Two years ago, as sales began to decline due to a growing number of consumers leaving the center aisles of grocery stores in favor of fresh produce sections, the Campbell Soup Company made a significant decision: it would eliminate artificial flavors and colors from all its products. For the 150-year-old company, this meant carefully reviewing every soup, sauce, cookie, and salsa within its brand portfolio—which includes well-known names like Pepperidge Farm, Prego, and V8—and replacing ingredients that had been essential until that point. This was undoubtedly a formidable challenge. “Transforming these products without compromising on taste, quality, and affordability, which are crucial, is an immense task,” stated 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.”
In parallel with its product reformulation efforts, which were based on a “Real Food Philosophy,” Campbell also unveiled new items designed with health and freshness in mind, as well as alternative formulations. This included a Prego Farmers’ Market line of pasta sauces made with herbs and tomatoes “picked at their peak,” according to marketing claims, as well as a new Well Yes! soup brand featuring flavors such as sweet potato corn chowder. Greg Shewchuk, Campbell’s chief commercial and marketing officer, described the company’s recent initiatives as “a thoughtful disruption of our core categories.”
Campbell’s transformation is a familiar story among many consumer packaged goods (CPG) manufacturers seeking to draw shoppers back to the center store. These companies are striving to meet the needs of their current customer base while also attracting new ones, attempting to find the right equilibrium between reformulating existing products and launching new ones.
So, how are manufacturers leveraging reformulation and new product introductions as strategies for customer retention and acquisition? Are they prioritizing one method over the other to boost sales and consumer engagement? Both strategies come with their own sets of risks and rewards. According to market research firm IRI, over 10,000 new products hit retail shelves each year, yet 90% fail to meet their initial objectives. Fewer than ten of these products achieve annual sales of $100 million or more.
Tracking product reformulations is more complex, as companies often make changes behind the scenes. For similar reasons, assessing their success rates is challenging. Nonetheless, the Consumer Goods Forum, a global network of over 400 retailers and manufacturers—including Ahold Delhaize, General Mills, Target, and Campbell—reported that 66% of its members reformulated more than 180,000 products last year. Common reformulation strategies included reducing sodium and sugar, adding vitamins, and incorporating whole grains, with many companies also moving to phase out artificial ingredients.
Barb Stuckey, president of Mattson, a firm specializing in new product development, branding, and reformulation, identified two types of reformulation: those that modify a product’s labeling and ingredient list, and those that do not. The first type is generally undertaken to eliminate unpopular ingredients, enhance the eating experience, cut costs, or improve a product’s health profile. Although this can be costly and labor-intensive, it allows companies significant flexibility to enhance their offerings. “With this kind of freedom, you can usually achieve your objective,” Stuckey explained to Food Dive.
The second type of reformulation involves making changes within the constraints of a product’s existing ingredients and labels. Stuckey noted that this approach is often driven by the need to replace an ingredient that has become more expensive or is no longer available. While companies may pursue this route to enhance taste or reduce overall costs, the lack of flexibility makes it considerably harder to achieve satisfactory results.
Around the same time Campbell announced its initiative to eliminate artificial ingredients and preservatives, General Mills’ cereal division made a similar pledge to remove artificial flavors and colors from all its products. Last year, the company revealed it had successfully eliminated artificial ingredients from 75% of its cereals. It has also reduced sugar levels in several of its kid-targeted cereals, including Trix and Lucky Charms. General Mills, like Campbell and other CPG companies, sought to attract health-conscious customers while retaining its core audience. Dana McNabb, president of U.S. retail cereal for General Mills, stated that its recent changes have successfully brought back customers who were deterred by sugar content and artificial ingredients, although reports indicate that the impact on sales has been modest.
The company encountered some challenges along the way. Although it effectively replicated the vivid colors and flavors of Trix, Golden Grahams, and Reese’s Puffs using natural ingredients such as turmeric and annatto (though consumers noted that Trix appeared too pale), Lucky Charms proved to be particularly challenging. The issue lay with the various marshmallows, which were difficult to recreate with natural ingredients. General Mills hopes to have the Lucky Charms line reformulated by the end of this year.
Tom Vierhile, a director at research firm GlobalData, pointed out that manufacturers often use reformulation as a strategy to solidify their customer bases or win back those who have strayed. However, these decisions must be made judiciously, as reformulation can sometimes yield unintended consequences. “People really dislike it when you alter a product they have cherished since childhood,” Vierhile commented to Food Dive. For General Mills, preserving the expected taste of brands like Trix and Lucky Charms is crucial and is the primary metric for any reformulation effort, according to McNabb.
At the same time, General Mills must expand into new consumer segments—something its core cereal lineup has struggled to achieve. This need prompted 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 for them,” McNabb explained to Food Dive.
In addition to tapping into new consumer segments, Vierhile noted that new product launches can also open up additional market opportunities. The snacking category, which has experienced considerable growth as consumers seek out mini-meals and snacks between meals, is particularly ripe for innovation. “A whole new category is emerging in snacking, and companies are eager to introduce products that meet this demand,” said Vierhile.
For Campbell, new product launches like Well Yes! and Prego Farmers Market present opportunities to engage health-focused consumers and encourage them to explore the company’s core grocery offerings, according to Shewchuk. The company has faced challenges in this endeavor over recent years, particularly with its Campbell’s Fresh division, which has experienced 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 saw a 2% decline.
Nonetheless, Shewchuk believes the company has the right strategies in place, focusing on its “Real Food Philosophy” to attract a variety of health-oriented shoppers. The ambitious goal is to draw these consumers back to the center of the store and ensure they keep returning. “We don’t believe the center of the store is dead,” Shewchuk declared to Food Dive. “We believe we simply haven’t reinvented it yet.” Additionally, with the integration of ingredients like calcium citrate 1000 mg elemental calcium into their formulations, they aim to enhance the health profile of their products, appealing to consumers who prioritize nutritional value.