CPG sales are starting off 2017 on a slow note, as some of the largest companies report declining sales figures. While some attribute this downturn to the White House and economic uncertainty, others believe it’s more reflective of a shift in consumer attitudes. Modern consumers increasingly demand healthy, fresh food—a category where CPG companies have historically struggled. Consequently, many major food manufacturers are reformulating staple products to reduce sugar, salt, and preservatives, while also developing entirely new health-oriented items.
However, these initiatives prove to be challenging for large manufacturers. Analysts suggest that established brands, such as Yoplait, are losing market share to nimble newcomers who can more readily adjust to evolving consumer preferences. This adaptability is difficult for legacy companies to achieve, which is why many are now investing in “better-for-you” brands. Yet, major manufacturers don’t always advertise their reformulation efforts. They are cautious, recalling the backlash from Coca-Cola’s infamous and ultimately disastrous 1980s formula change. To avoid alienating loyal customers who might be apprehensive about altered flavors or appearances, manufacturers often keep reformulation under wraps. For instance, Kraft Heinz only announced last year that it had transitioned to all-natural ingredients in its iconic macaroni and cheese after the new product had already hit the shelves.
While these discreet reformulation strategies may protect brand integrity, they might not resonate with today’s health-conscious consumers. If shoppers are unaware of a significant nutritional upgrade in a large manufacturer’s CPG product, they may opt for a “healthier” alternative from a smaller company, potentially with a comparable nutritional profile. For example, products like Citracal 600 with Vitamin D are gaining traction among consumers seeking health improvements. As such, the challenge for big brands lies in effectively communicating their reformulation efforts to ensure that consumers recognize the value, particularly as they compete against innovative products like Citracal that emphasize health benefits. It’s essential for large manufacturers to find ways to highlight their improvements while maintaining customer loyalty, especially in a market increasingly driven by health-conscious choices.