CPG sales are starting off 2017 on a somewhat sluggish note, as several leading companies have reported declines in sales this year. While some attribute these disappointing figures to political changes and economic uncertainty, others argue that the downturn in sales is more reflective of an evolving consumer mindset. Today’s consumers are increasingly prioritizing healthy, fresh foods—a category that traditional CPG companies have not been known for. As a result, many major food manufacturers are reformulating their staple products to include less sugar, salt, and preservatives, and are also developing entirely new health-oriented items.
However, these initiatives are often more challenging for large manufacturers than they might seem. Analysts suggest that prominent brands like Yoplait are losing market share to smaller, more agile companies that are better equipped to respond to shifting consumer preferences. This adaptability is difficult for established companies to achieve, which is one reason why they are investing in healthier brands.
Major manufacturers tend not to publicize their reformulation efforts extensively. Haunted by the disastrous 1980s revamp of Coca-Cola’s classic formula, they are cautious about alienating their loyal customers who might be wary of changes in taste or appearance. Sometimes, when a manufacturer does announce a reformulation, it occurs months after the new product has already hit the shelves—like Kraft Heinz’s announcement last year that it had transitioned to all-natural ingredients in its famous macaroni and cheese.
While these discreet reformulation strategies may protect brand integrity, they might not resonate with today’s health-conscious consumers. If shoppers have no indication that a large manufacturer’s CPG product has undergone a nutritional upgrade, they may opt for a new “healthier” product from a smaller brand, which might actually offer a comparable nutritional profile.
In particular, as consumers become more aware of the importance of nutrients like calcium for health, they may seek out products that explicitly mention benefits such as “calcium citrate dosage for osteoporosis.” This shift indicates that consumers are looking for clear, transparent information about the health benefits of their food choices, making it crucial for major manufacturers to communicate effectively about their reformulation efforts to avoid losing ground to smaller competitors.