Reformulation? Think Renovation


August 07, 2017

by Andrew Wardlaw

Innovation is taking a back seat. The current focus is reformulation. But are we missing out on a bigger prize? Our 2017 Consumer & Category Health Check provides some clues…

Working with the world’s leading FMCG players, we’re witnessing a marked rise in activity around reformulation. So, to promote best practice, we recently hosted a forum for Britvic, Weetabix, Danone, Nomad, Mondelez, Asahi and many more to share their experiences. The key message from the floor was that we need to be less reactive and more proactive – for example, realizing that better nutrition is serviced more by what you put in rather than what you take out.

Must try harder

Progress is being made, but daily salt consumption is still around 8g and it should be nearer 6g. Some of us are still consuming 3 times the recommended amount of sugar (it should be no more than 5% of daily energy) – and we’re a little unsure if fat is actually bad for us. The very large elephant in the room is the fact that we’re still on course for an obesity time bomb by 2050 – where half of us will sport a BMI in excess of 30.

Reformulating nutritional profiles is no walk in the park, as anyone working on them will testify. Changes can present real risks to the brand proposition – both physically (the experience) and conceptually (the equity).

Consumer landscape

Taking a step back, we know that nearly 2/3 of the UK population are ‘Mindful Nourishers’ or ‘Hedonists’. These mind sets couldn’t be further apart. ‘Mindful’ consumers make more deliberate choices: going beyond natural – towards nourishment (choices perceived to offer greater nutritional value). A ‘Hedonist’ surrenders to convenient propositions with familiar tastes. So here’s the rub – how do you reformulate and keep both these mainstream mind sets on side? Any communication alerting consumers to a new recipe will alarm ‘Mindful’ shoppers, reminding them their favourite food has been played with (processed). Hedonists will see reduction claims as the enemy of taste and will drift elsewhere. The trick, it was suggested, is to follow Kit Kat. Reformulate in a way that doesn’t just remove stuff. Furthermore, Kit Kat deliberately focuses communication on the added amounts of milk and more cocoa. They keep the reduced sugar quiet. 

This Kit Kat example is a great example of a renovation approach. Renovation promotes the idea of making things better. By contrast, reformulation suggests changing the recipe to stand still.

MMR 2017 Consumer & Category Health Check

As part of the mix of information shared on the day, we revealed the results of our latest Consumer & Category Health Check. The data illuminates perceptions of leading food & drink categories - capturing the strength of association between the category (for example, Breakfast Cereals) and 12 different health markers (for example, sugar, salt, fat, protein, fibre, wholegrain). As well as category specific profiles, meta-analysis allowed for a more holistic understanding…

The chart here illustrates that where a category is perceived to be ‘Healthy’, it is also likely to be highly associated with ‘Natural’ and/or ‘Protein’. ‘Sugar’ and ‘Sweeteners’, as well as ‘Fat’ and ‘Calories’ pull furthest way from overall health.Overlaying a selected number of categories (below), threw up a few surprises…

Breakfast Cereals, Fruit Juice & Smoothies, Yogurt and (more curiously) Baked Beans compete for most ‘Healthy’, whereas Crisps, Biscuits and Tomato Sauce struggle in the nutritional stakes.

A key message from the study is that the categories that perform better tend to command strong associations with multiple positive nutrition markers. For example, Breakfast Cereals, despite all the negativity surrounding its prospects, still boasts relatively good scores for ‘Natural’, ‘Protein’, ‘Fibre’ and ‘Wholegrain’ – despite a raised association to ‘Sugar’. Cereals have a strong functional footing!

Renovation, not reformulation

Experiences from Sean Dowie (with recollections from Rubicon Exotic Fruit Juices) and Halak Parikh (Britvic) highlighted typical problems associated with reformulation.

With the onset of a sugar tax, should they change much loved recipes to avoid sizable price increases? Should they entertain artificial sweeteners – particularly if Stevia proves difficult? Should they make the changes with or without communications?

What emerged was the idea that many brands – particularly those with strong loyalists – should perhaps resist reformulation. To reformulate is to risk the very essence of a brand. In these cases, it may be better to create additional lower calorie alternatives. It’s the model Coca-Cola appears to have adopted after all.

Experience has shown that reducing one element (such a sugar) has implications well beyond the obvious: viscosity, mouthfeel and the overall balance of flavours can also be affected. Extend this in to baked goods and a whole different set of implications come into play. Put simply, reformulation can seriously dilute what you’re famous for, so research needs to understand how consumers will feel about your brand if you change it.

If your decision is to reformulate (preferably with consumer consent), then there is still opportunity for a more positive spin: that of renovation. Where the mind-set shifts to how we create a more compelling proposition – incorporating elements of reformulation, but aiming for a bigger prize: where brand, pack and product are even more closely aligned in terms of their emotional impact.

We live in interesting times across the food & drink industry, and reformulation is undoubtedly the dominate narrative right now. Spending a morning immersed in the subject – with a diverse set of views and experiences – taught us all that there is no 'one size fits all' solution. But it did suggest that there is an opportunity to be more ambitious: thinking more opportunistically. 

Thinking renovation, not reformulation.

Most FMCG innovation fails, and everyone has got used to this fact. Now the focus is on reformulation – but things can still go wrong. Samuel West, Founder of the Museum of Failure shared some warnings from history. Take a look at my full overview of his talk here.

In part 3 of this series Luisa Robertson (Director of Future Focus) will share our 3 top-tips for successful renovation.

Andrew Wardlaw is Director of Insight at MMR Research Worldwide