Food makers bulk up on simple ingredients as consumers embrace clean labels
General Mills, Hershey, Campbell Soup and Nestle are among the companies replacing artificial colors and flavors with natural ones and using a smaller roster of components
For food and beverage giants plagued by slowing growth and heightening competition from nimble upstarts, the motto "less is more" is playing a bigger role in their everyday operations.
The emphasis comes as nearly every big food products manufacturer ranging from General Mills and Hershey to Campbell Soup and Nestle is turning away from artificial colors and flavors, along with other additives such as preservatives and artificial sweeteners. Instead, they are increasingly turning to natural foods with a smaller roster of better-for-you ingredients when they introduce new products or reformulate existing ones. It's a delicate endeavor for food companies to overhaul these household staples while maintaining the holy grail of taste that drew consumers to the item in the first place — and kept them coming back.
“I’ve been in R&D development roles for over thirty years, and this has been one of the biggest challenges of my career,” Jeff George, head of research and development at Campbell Soup, told Food Dive. “The reason is to make these transformations without sacrificing taste or quality, which are paramount, and affordability, which is also paramount … to do all of those three things at the same time is a tremendous challenge. It’s not good enough to move forward on one and take two steps back on the other.”
“I’ve been in R&D development roles for over thirty years, and this has been one of the biggest challenges of my career."
Head of research and development at Campbell Soup
Food companies improved the health profile of about 180,000 products in 2016, an increase of more than 100,000 items from the prior year, according to the Consumer Goods Forum, a global network of more than 400 retailers and manufacturers, including Ahold Delhaize, Target, General Mills and Campbell Soup. The group found reducing sodium and sugar were two of the most common reformulation steps reported by its members, along with adding vitamins and incorporating whole grains. Other companies also took steps to phase out artificial ingredients.
The reason is simple: More consumers are loading up their shopping carts with healthier, fresher fruits and vegetables — and when they indulge in a bowl of ice cream, cereal or mac and cheese, they want a slimmed-down roster of ingredients they recognize and can pronounce. Innova research estimates 75% of U.S. consumers claim to read the ingredient labels of food products, while 91% contend those with ingredients they recognize are healthier.
Need to communicate
Big food companies have no choice but to embrace the clean label race, according to Brittany Weissman, an analyst at Edward Jones. If they don't, they risk finding their increasingly out-of-favor products at a further competitive disadvantage to fresh items and other brands that have chosen to invest in this challenging and sometimes costly undertaking. She cited center-of-the-aisle products such as soups, cereal, crackers and canned goods as the most likely targets for further bouts of innovation.
“You’ll see a lot of these companies slowly but surely build out their better-for-you products,” Weissman told Food Dive in an interview. “The thing that’s most important is that whatever these investments are, that they do communicate them to the consumer, because what’s the point of reformulating these products if it doesn’t happen?”
The list of companies overhauling the ingredient list in many of their existing products or rolling out new ones is seemingly endless.
Campbell Soup, which announced in 2015 it will remove artificial colors and flavors from nearly all of its North American products by the end of its fiscal 2018, has introduced new items with simple ingredients to appeal to consumers seeking clean labels. These products include its Well Yes! line of soups including sweet potato corn chowder and black bean with red quinoa that contain no artificial colors, flavors or antibiotics and come packaged in cans that are non-BPA lined and recyclable.
Hershey announced in 2015 that it will use simpler ingredients in many of its candies, beginning with its popular chocolate bars and Kisses before moving on to other products in its portfolio. The chocolate icon is taking out artificial vanilla in favor of the real thing and using non-genetically modified sugar and milk from cows that have not been treated with growth hormones. Cocoa butter is replacing polyglycerol polyricinoleate, an emulsifier used to improve the flow of chocolate.
The confectioner said not all of its brands are easy to fit in the clean label parameters. It has struggled to recreate vibrant reds, greens and other colors that give its Jolly Ranchers hard candies their signature brightness without using artificial colors.
Darwin Bratton, Hershey's vice president of research and development, told Food Dive the biggest challenge in changing some products is the limited availability of certain “natural” ingredients like vanilla or the color blue — a problem the company is confident will be rectified as more food companies turn to clean labels and suppliers boost their output.
"We knew it would be very difficult when we embarked on the work," Bratton said. "Simple Ingredients is not about driving short-term sales. It’s about being responsive to what consumers want from our products and being mindful about the long-term equity of our brands and products based on meeting consumer expectations."
Even smaller brands have latched onto the growing demand for clean labels.
Bridor, a producer of European-style croissants, pastries and breads to the U.S. foodservice and retail markets, launched its Clean Label program in May 2017 — highlighted by a logo placed on approved items — after starting work on the measure more than a year earlier.
The initiative, which bans the use of more than 150 ingredients, including artificial colors and flavors, preservatives, artificial sweeteners, bleached flour, high fructose corn syrup and hydrogenated or partially hydrogenated fats, includes more than 200 items with plans to reach 300 by the end of the year. Many of the products already met Bridor's clean label standard, but the company wanted a way to tap into growing public interest for these foods.
Olivier Morel, a senior vice president of sales and marketing at Bridor, said when a "story" like a clean label is included on the product, consumers are more likely to purchase it.
"In essence, we were already clean, but wanted to create a program to back up our claims and promote it," Morel told Food Dive. "We know for a fact that the customers and their consumers are looking for clean label products, and we are confident that being ahead of the game with this program will have a positive impact on our business."
'A lot of complexity at play'
While most companies trumpet their efforts, some find it more effective to make the change quietly. Kraft Heinz only announced it switched to natural ingredients in its Kraft Macaroni & Cheese products months after making the changes in what it called the world's largest "blind taste test." The company, which declined to comment for this story, proved it could reformulate its legacy brand with healthier ingredients without much attention to the difference in taste or appearance.
Kelly Malley, director of marketing for Nestle’s food division, said the company has adopted what it calls a "Kitchen Cupboard standard" for its product renovations by using only ingredients that consumers would find in their own homes, such as vine-ripened tomatoes, fresh pasta and real mozzarella cheese for its pastas.
The consumer products giant has rolled out a massive advertising campaign for its Häagen-Dazs brand in cities such as New York, Los Angeles and Washington, D.C., featuring a spoonful of ice cream and the slogan: “5 ingredients, one incredible indulgence." Nestle also introduced a new Coffee Mate creamer with all-natural ingredients and took out artificial flavors and reduced sodium across its pizzas and snacks, including its Tombstone and Hot Pockets brands.
“Given the wide range of offerings that Nestle has, there’s a lot of complexity at play,” Malley told Food Dive in an email. “One unique component of Nestle brands like Stouffer’s is that many of our customers have been lifelong fans. They know the taste exactly — it may even be something they grew up with. Making changes to ingredients while delivering an amazing experience for lifelong consumers and meeting their expectations has been our biggest challenge.”
In reformulating its Stouffer's Lasagna with Meat and Sauce, the company conducted multiple taste-testing rounds that allowed customers to try the new and old versions side-by-side to see which ones they preferred. A similar strategy was used for its macaroni and cheese: The company went through more than 15 recipes until it came across the one with the right mix of cheddar cheese, skim milk and butter.
“As consumers’ expectations of food and beverages change, we’re adapting to meet their demands by expanding our offerings,” Malley said. "We want to be straightforward and open about the changes we make."
It's just not enough
Despite these efforts, some critics continue to push food companies to do more.
Lisa Lefferts, a senior scientist at the Center for Science in the Public Interest, said it doesn’t matter whether companies announce they are going to make the change first or wait until after it’s done before communicating with the public as long as they are open and transparent about what they are doing.
While an overwhelming amount of attention has been placed on removing many of the riskiest food additives like synthetic food dyes, Lefferts said not enough attention has been given by companies to reduce sodium and sugar levels in their products.
“We’re pleased that companies are taking steps to get rid of some of the most worrisome ingredients, that’s great,” she told Food Dive. “If we really want to be serious about making clean labels more about public health than public relations, those ingredients need to be included in clean label programs.”
The nonprofit group, which has been among the most vocal in encouraging wider adoption of clean labels, recently studied the progress restaurants and supermarket chains, including Ahold Delhaize, Aldi, H-E-B, Kroger, Meijer, Supervalu, Target and Whole Foods, are making in adopting the initiative.
Lefferts, who authored the study, found most supermarkets apply their clean label policies only to one or a few house brands — the exception being Whole Foods, which has a long list of prohibited ingredients that applies to all the products it sells. In its findings, CSPI recommended supermarkets provide ingredient and nutrition information online and expand their clean-label programs to all private-label brands.
“I’m not sure it’s something that will necessarily reverse some of these broader packaged food trends. For some of them it’s more about the premium-ization of the portfolio. It’s just not enough to overcompensate for some of the declines they are facing elsewhere.”
Analyst at Edward Jones
But clean labels may not solve big food makers' biggest challenge — falling sales. Wasserman, the Edward Jones analyst, said while cleaner label products might contribute to a brief uptick in sales, it’s unlikely to be enough to help offset the declines these companies are facing elsewhere in their businesses.
“I’m not sure it’s something that will necessarily reverse some of these broader packaged food trends. For some of them, it’s more about the premiumization of the portfolio,” she said. “It’s just not enough to overcompensate for some of the declines they are facing elsewhere.”
Follow Christopher Doering on Twitter