The complicated quest for simpler foods
Campbell Soup (CPB) is among a growing number of food companies that are simplifying their products in response to growing consumer unease over ingredients they consider to be unnatural. But it's a process that can be surprisingly complicated.
Consider it's new version of chicken noodle soup. As The New York Times noted, it took the world's largest soup producer two months of "intense work" to create the right balance of ingredients that would yield a broth and noodles that tasted the same or better than it did in 2011 when the company last altered the product's recipe.
Anna Burr, communications director for Campbell, pointed out in an email to CBS MoneyWatch that the new, scaled-down recipe is being used just for "two varieties of kids chicken with pasta shapes soup." She added, "We have not changed the recipe of our Campbell's Condensed Chicken Noodle Soup."
Still, considering how the Camden, New Jersey-based company has struggled for several years to jump-start stagnant soup sales, no wonder it's in the midst of promoting the "simple" soup in a new ad campaign. It's also now tinkering with its tomato soup, another of its iconic products.
"Food has really improved over the years, and I think people have a feeling that all these things (food companies) put in food are bad for them," said John Stanton, a professor at St. Joseph's University in Philadelphia who also consults for the industry. "Campbell is on this bandwagon like everyone else."
Under CEO Denise Morrison, Campbell has placed more of an emphasis on marketing the freshness of its ingredients and has pledged to reduce the use of artificial flavors and high-fructose corn syrup. The company also has launched a line of organic soups to capitalize on the growing demand for products in this category.
Other food companies have heard from consumers that simpler is better, and they've spent big bucks in recent months expanding into the fast-growing organic market. Hormel (HRL), best known for its canned meat product Spam, acquired organic meat producer Applewood Farms for $775 million earlier this year, while General Mills (GIS) added Annie's to its product portfolio last year at a price of $820 million.
General Mills, whose products range from Cheerios to Pillsbury baking products, found that nearly half of the consumers it surveyed were "making an effort" to avoid products with artificial flavors and colors. That's a message the company couldn't ignore, according to Jeff Harmening, a General Mills executive vice president and its U.S. Retail chief operating officer. He said the company "renovated" about $5 billion worth of U.S. Retail's $10.5 billion portfolio last year.
Nonetheless, General Mills proceeded cautiously when it removed sugar from its Yoplait yogurt line and its cereals in recent years to avoid alienating consumers.
"What's hard to do is simplify ingredient lists and get products that people love," he said. "It's not really much of a win if you make products simpler and 20 percent of your volume goes away."
Campbell calls its reformulated soups simple because they use 20 ingredients instead of the previous 30. However, "simple" means different things to different companies, according to Bonnie Liebman, director of nutrition at the Center For Science and the Public Interest. She noted that the Food and Drug Administration hasn't defined the term "simple" for regulatory purposes.
"It's really a double-edged word," she said. "On the one hand, some of these companies are getting rid of artificial ingredients like food dyes and artificial sweeteners in some cases." But Liebman added that consumers shouldn't be lulled into thinking that simple foods are necessarily healthy. Haagen Dazs, for instance, sells a "simple" line of ice cream with only five ingredients. Other companies sell "simple" candy products.
"People are often looking for excuses to eat junk food," she said, "and companies are always willing to give them that excuse."