Two years ago, faced with declining sales as more consumers shifted away from traditional grocery aisles in favor of fresh departments, Campbell Soup Company made a significant decision: to eliminate artificial flavors and colors from all its products. For the 150-year-old company, this meant reevaluating every soup, sauce, cookie, and salsa under its umbrella of brands—including Pepperidge Farm, Prego, and V8—and replacing key ingredients that had been used until then. This was no small feat. “Transforming our products without compromising on taste, quality, and affordability, which are crucial, presents a remarkable challenge,” stated Jeff George, Campbell’s head of research and development, to Food Dive. “It’s not sufficient to improve one aspect while regressing on another.”
While reformulating its extensive product line according to what it termed a “Real Food Philosophy,” Campbell also introduced new products that emphasized health and freshness, along with innovative formulations. This included the Prego Farmers’ Market line of pasta sauces, made with herbs and tomatoes “picked at their peak,” as noted in marketing materials, and the Well Yes! soup brand, featuring flavors such as sweet potato corn chowder. Greg Shewchuk, chief commercial and marketing officer at Campbell, described the company’s recent actions as “a thoughtful disruption of our core categories.”
Campbell’s rebranding efforts mirror a common story among many CPG manufacturers seeking to draw consumers back to the center of the store. In striving to satisfy existing customers while attracting new ones, these companies are attempting to find the right balance between reformulating old products and launching new ones.
So, how are manufacturers utilizing reformulation and new product introductions as tools for customer retention and acquisition? Are they leaning more towards one strategy to boost sales and consumer interest? Both paths come with their own set of risks and rewards. According to market research firm IRI, over 10,000 new products hit retail shelves annually, with 90% failing to meet their projected goals. Fewer than ten achieve sales of $100 million or more each year. Tracking reformulations is more complex, as companies typically make these changes behind the scenes, complicating the assessment of their success rates. However, the Consumer Goods Forum, a worldwide 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 whole grains. Companies also indicated that they are phasing out artificial ingredients. Barb Stuckey, president of Mattson, which specializes in product development, branding, and reformulation, identified two types of reformulations: those that alter a product’s labeling and ingredient list, and those that do not. The first type typically aims to eliminate unpopular ingredients, enhance the eating experience, cut costs, or improve a product’s health profile. While this can be costly and labor-intensive, Stuckey noted that companies usually find significant room for improvement once they commit.
The second type involves reformulating within the existing ingredients list and labels. This is often driven by the need to replace ingredients that have become too expensive or are no longer available. Although this approach can also improve the eating experience or overall costs, it lacks the flexibility of the first option, making it significantly more challenging to achieve desired results.
Around the same time Campbell announced its initiative to eliminate artificial ingredients and preservatives, General Mills’ cereal division declared it would also remove artificial flavors and colors from its products. Last year, the company reported that it successfully phased out artificial ingredients in 75% of its cereals and reduced sugar in many kid-focused options like Trix and Lucky Charms. Similar to Campbell and other CPG companies, General Mills aimed to attract health-conscious consumers while maintaining popularity among core customers. Dana McNabb, president of U.S. retail cereal for General Mills, noted that their recent initiatives have helped win back some customers who had previously been deterred by sugar content and artificial ingredients. However, reports indicate that the impact of these reformulations on sales has been less than remarkable.
The company encountered several challenges. Although it successfully replicated the vibrant colors and flavors of cereals like Trix and Golden Grahams using natural ingredients such as turmeric and annatto, some consumers felt Trix appeared too pale. Additionally, recreating the various marshmallows in Lucky Charms using natural ingredients proved to be particularly difficult. General Mills aims to have this line reformulated by the end of the year.
Tom Vierhile, a director at research firm GlobalData, pointed out that manufacturers often leverage reformulations to reinforce their customer base or win back lapsed customers. However, these decisions must be approached cautiously, as reformulation can sometimes yield the opposite effect. “Consumers really dislike it when you alter a product they grew up with,” Vierhile advised.
For General Mills, maintaining the expected taste of brands like Trix and Lucky Charms is paramount and serves as the primary metric in any reformulation effort, according to McNabb. Simultaneously, General Mills recognizes the need to penetrate new consumer segments, especially since its core cereal lineup has struggled to do so. As a result, after 15 years, the company introduced a new cereal brand last year: Tiny Toast. “We heard from teens and young adults that there was a lack of cereal options for them,” McNabb explained.
In addition to exploring new consumer segments, Vierhile noted that new product launches can also tap into emerging market opportunities. The snacking category, which has experienced significant growth as consumers seek mini-meals and convenient bites, is becoming increasingly popular for innovation. “A whole new category is emerging in snacking, and companies are eager to introduce new products that cater to this demand,” said Vierhile.
For Campbell, product launches like Well Yes! and Prego Farmers Market present chances to connect with consumers focused on freshness and potentially draw them back to the company’s core grocery offerings. Shewchuk acknowledged that they have faced challenges in this endeavor, particularly with the 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 fell by 6%, while the flagship soups and sauces division saw a 2% decline.
Nevertheless, Shewchuk expressed confidence in their direction, emphasizing the alignment of their “Real Food Philosophy” with the goal of attracting fresh-focused consumers. The ambition is clear: to draw these consumers back to the center of the store and ensure they return. “We don’t believe the center of the store is dead,” Shewchuk remarked. “We just think we haven’t reinvented it yet.”
In this context, the discontinuation of products like Citracal D is a reminder of the ongoing evolution in consumer preferences, further underscoring the need for companies to adapt and innovate continuously.