Shoppers today are losing their appetite for unhealthy food, and they’re letting their wallets do the talking. It’s one of the reasons why established consumer goods brands are losing billions to upstarts. People are moving away from Big Food towards smaller brands that offer healthier options, simpler ingredients and greater transparency in nutrition and packaging. In the UK alone, the “free from” market, a relatively new industry that creates products that do not include things like gluten or lactose, has grown to £355 million as of 2014.
In the recent Consumer Analyst Group of New York conference, the packaged-goods industry’s premier annual gathering, big brands openly admit that they need to win back customers.
“We understand that increasing numbers of consumers are seeking authentic, genuine food experiences,” said Denise Morrison, CEO of Campbell Soup. “We know that they are skeptical of the ability of large, long-established food companies to deliver them.”
As this week’s articles show, CPG brands are adopting different tactics in order to build a more health-conscious image. Here are three ways they’re doing that.
- Removing artificial ingredients
Following the lead of many restaurants, Taco Bell is promising to drop artificial flavor and coloring from its menu. As noted by the CBC, the Mexican-style chain is promising to remove the artificial dye Yellow No. 6 from its nacho cheese, artificial black pepper from its seasoned beef and unsustainable palm oil from its food.
“It will be the same great tasting Taco Bell that people love,” promised Brian Niccol, CEO of Taco Bell. “I do not want to lose any element of being accessible to the masses.”
- Expanding product lines
Chocolate manufacturer Hershey is introducing healthier offerings to its product line, focusing on simpler ingredients. Starting this August, the company will sell products like Brookside Fruit & Nut Bars, a snack bar with natural ingredients like real fruit, whole roasted almonds and rolled oats. The company is also introducing a natural jerky called Krave—the company’s first foray into the $2.5-billion meat-snacks industry.
Customer feedback inspired the introduction of these products. “Consumers are at the heart of all we do at Hershey and we are focused on driving innovation that anticipates changing consumer preferences,” said Michele Buck, president of North America for Hershey.
- Giving priority shelf space to healthier foods
Retailers are also eager to project a healthier image. Earlier this year, Target notified manufacturers that it would start promoting healthier options in its stores.
“Canned soup, cornflakes, boxed macaroni and cheese and other packaged, processed foods will get less optimal shelf space and promotional signage in its grocery aisles in favor of items such as fancy sauces and oils and granola,” Reuters reported in May, adding that the move is influenced by the changing taste of American shoppers.
Going healthy is a no-brainer for many retailers and food and beverage manufacturers today—especially given the evolving perceptions and expectations of Millennials and Gen Z consumers. The examples above show that there are many ways companies can change public perception about the healthiness of their products and their brands. Beyond following trends, however, companies need to better understand what constitutes “healthy” for today’s consumers. More and more organizations are leveraging secure communities of customers to gain deep immersive insight into consumer preferences so they can quickly anticipate and adapt to the rapidly engaging marketplace.