The U.S. packaged foods industry is a $378 billion year industry, and it is facing changes in the upcoming year, particularly in the packaged foods sector. Consumers today are turning away from the mass-produced pantry staples of national packaged brands and turning to healthier, local and more “authentic” food.
Large packaged foods companies like Kraft, Kellogg and ConAgra, have reported a decline in sales, as consumers are moving towards fresher options. Kellogg saw a 5.7% decline in the breakfast foods category, which makes sense as breakfast routines are changing. Kellogg’s Special K brand was created with calorie-counters in mind. Now that the diet trend has shifted to low carb/protein, Special K is losing traction with consumers. Instead of carb heavy cereals like Kellogg’s Special K, consumers are seeking on-the-go options like Greek yogurt and protein bars. Kraft also saw a decline in sales of their Mac & Cheese and Velveeta products, explaining this reflects changes in consumer preferences.
As more consumers focus on sugar as a primary source of unnecessary calories and connect it to unwanted weight gain, brands will need to re-engage shoppers with more nutritious options. Many packaged food companies are working to reduce ingredients like sodium, sugars and fats, and are making commitments to remove “unnecessary” calories out of their products. A recent study found that 71% of consumers read the sugar content on ingredient labels, and 46% strongly want to reduce their consumption of sugar. Manufacturers are trying to win back sugar-conscious consumers by highlighting the reduced amount of sugar in their products. The number of products launched with a ‘low/no/reduced sugar’ claim increased 45% in 2017 compared to five years ago. Another tactic packaged foods companies are using is to switch the type of sweetener used or substitute with one perceived as healthier. The number of products carrying a ‘no artificial sweeteners’ claim has increased 4.4% from a year ago, and products with ‘no added sugar’ claims are up 2.6%.
Regardless of their chosen strategy, manufacturers need to re-engage consumers with more nutritious options if they want to preserve their place in the market.
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