The Health & Wellness movement has made great strides over the past few years. And, the trend only intensified during the pandemic, although indulgent eating was a contradictory development for many consumers.
CPG companies are positioning themselves and their product portfolios to appeal to those with healthier lifestyles, as consumers pay more attention to the healthfulness of the food they eat, especially when snacking.
To gain insight into how CPG companies are addressing this consumer movement, The Food Institute recently presented a webinar titled “How the Health & Wellness Trend Is Impacting CPGs.” Joseph Chen, Consumer Insights Lead, Wellbeing and Sustainability USA at Mondelez International and Fran Guzman, Lead, Insights & Strategy, Kraft Heinz, addressed how these giants of the food industry are adapting to keep up with consumer demand.
NEW, TRENDING INITIATIVES
Chen presented a Mondelez initiative called “Snacking Made Right.” The mantra of the company behind Oreo, Belvita, Tang, Triscuit, and scores of other brands is “the right snack, for the right moment, made the right way.” Chen mentioned “mindful snacking,” when people think about and enjoy their snacks. Mondelez research shows that 75% of consumers say snacking provides an essential break in their busy day. Eight of 10 millennials use snacking moments as “an opportunity to slow down and find moments of quieter, mindful reflection.” In other words, they are not gobbling down a bag of potato chips while driving on the interstate.
Mondelez’s goal is to have 20% of snack revenue from portion control products by 2025.
Kraft Heinz’s Guzman pointed out that his employer has products across no less than 55 categories. It has recently reoriented the business to focus on consumer needs rather than competing in crowded categories. For instance, instead of looking at “how can I sell more peanut butter,” the company looks at “how can I own the breakfast toast occasion.” Kraft Heinz is also focusing on “real food snacking,” delivering a nutrition-rich, tasty, convenient, clean food experience. Kraft Heinz brands include Lunchables, Capri Sun, and Planters, as well as the iconic Kraft Mac & Cheese.
EVOLVING CONSUMER HABITS
Both Chen and Guzman noted that the pandemic had altered consumer behavior. People are looking for healthy foods yet also embracing indulgent brands as a way to deal with the worries of the world. Oreo cookies, Kool Whip, Triscuits and Kraft Mac & Cheese were among the go-tos when people needed comfort food earlier in the pandemic.
Nevertheless, the future appears to be in health and wellness. The companies have been acquiring and developing brands such as Back to Nature (Kraft Heinz) and Dirt Kitchen (Mondelez.) Mondelez even has a program called Snack Futures through which entrepreneurs are mentored and funded to develop health and wellness products.
Yet much of the change is through “renovation” of existing brands. Guzman pointed out that renovation can be a long process in which sugar, fat and other less healthy ingredients are gradually removed from the products, complemented by consumer-facing marketing campaigns. For instance, Kraft Heinz has a goal of eliminating 60 million pounds of sugar in its products by 2025.
FOCUS ON SUSTAINABILITY
Sustainability and environmental impact are also part of health- and wellness-oriented consumer values. Responsible sourcing is a mantra for both companies, who can use their size to make a positive impact on the world. For instance, 100% of the tomatoes in Heinz ketchup will be “sustainably sourced” by 2025.
Both Chen and Guzman worked in innovation at QSR companies prior to their current positions, at McDonald’s and Sonic respectively. When asked how that affected his current role, Chen said, “You learn to innovate quickly. We could come up with a menu idea and it would be on the market within a few months.” Guzman added, “Creativity was encouraged. Products either succeeded or failed and it was easy to make changes either way.”
With giant CPG corporations embracing the health and wellness space, people can be expected to continue to eat and drink better. It’s good to have a Smart Ones 280-calorie dinner. With a side of tater tots!