- Executives from Procter & Gamble Co., PepsiCo Inc. and Nestlé SA have all reported that decreased U.S. spending in 2017 has cut into results, but most expect things to pick back up, according to The Wall Street Journal.
- Nielsen reported that overall purchases of consumer packaged goods in the U.S. dropped 2.5% in unit terms in the first quarter.
- The 20 biggest CPG companies reported flat sales last year while smaller ones posted sales growth of 2.4%, according to Nielsen.
CPG sales are starting 2017 on something of a slow note, as some of the biggest companies have reported decreasing sales so far this year. While some may point to the White House and economic uncertainty as the cause of these low numbers, others believe this sales dip has more to do with a changing consumer mindset.
Today's consumer demands healthy, fresh food — a category for which CPG companies have not traditionally been known. Because of this, many major food companies are reformulating their mainstay products to contain less sugar, salt and preservatives, as well as creating entirely new health-focused items.
Still, these initiatives are easier said then done for major manufacturers. Many analysts say that big brands like Yoplait are losing ground to smaller upstarts because they are better positioned to adapt to changing consumer sentiment. This flexibility is hard for legacy companies to attain, which is one of the reasons why big companies are investing in better-for-you-brands.
Major manufacturers don't always publicize their reformulation efforts. Remembering the nightmare of Coca-Cola's well publicized and ultimately disastrous 1980s revamping of its core formula, they want to make sure not to alienate their core customers who might fear different tastes or appearances. If a manufacturer tells consumers about a reformulation, sometimes it happens months after the new product has been on the shelves — like Kraft Heinz announcing last year that it had already switched to all natural ingredients in its iconic macaroni and cheese.
While these stealth reformulation efforts make sense from a brand defense standpoint, they might not be the best idea for today's health-conscious consumer. If consumers have no reason to think that a large manufacturer's CPG product has had a nutrition upgrade, they may instead buy a new "healthier" product from a small upstart, which could actually have a similar nutrition profile.