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Keren Novack is president of Curion. Opinions are the author’s own.
Have you ever reminisced about a nostalgic product, like a beloved cereal or snack that no longer feels the same or is no longer available? Take, for example, Fruit Stripe gum, a colorful gum that was discontinued after 54 years due to changing consumer preferences and purchasing patterns.
Or how about Kirkland’s Signature Chocolate Chips, which Costco discontinued because of rising cocoa costs? And the iconic Choco Taco? Klondike removed it from their product line due to increased demand for other products.
These cherished products that have been trusted by consumers for generations are now facing a crisis. Some are being overlooked by consumers, others are losing quality due to rising costs and ingredient changes, and some now contain ingredients that are under scrutiny by the government.
To stay relevant, brands today must be aware of evolving consumer expectations, maintain product quality despite rising costs, and navigate a complex regulatory landscape proactively.
The challenges faced by legacy brands
A mix of changing consumer preferences, inflation, and intensified regulatory pressure from government initiatives like “Make America Healthy Again” is creating a triple threat for legacy brands.
These trends become more apparent when examined closely:
Shifting Consumer Behavior
Consumer behavior has been evolving for years, with a significant divide in what people are looking for becoming more prominent. Some consumers are opting for healthier, albeit more expensive options, while others are focused on getting the best value for their money, leaving little room for traditional “middle-class” brands.
For instance, traditional boxed mac and cheese has seen a decline in market share from both ends. Premium brands like Goodles have doubled their sales, while private label alternatives priced at half the cost have seen a 6% increase in sales.
Many struggling middle-market brands are attempting to either premiumize their offerings with ‘artisanal’ options or cut costs through value engineering. However, without a deep understanding of what consumers value, many fail to establish credibility in either direction. With the right insights, brands can revitalize these middle-market favorites, enhancing their quality and aligning with modern consumer needs.
Rising Costs and Inflation
Brands are facing higher ingredient and production costs, leading some to substitute premium ingredients with cheaper alternatives to maintain margins. These gradual changes can erode consumer trust over time, resulting in a “slicing the salami” effect where each compromise diminishes the product’s appeal.
Brands must be careful not to let rising costs compromise their product promise. Any alterations to the product can impact its credibility, as incremental changes move it further away from what consumers originally loved. These small compromises accumulate, disappointing loyal customers and accelerating the brand’s decline as they seek alternatives that match their expectations.
Ingredient Scrutiny and Regulatory Pressures
Government agencies are paying closer attention to food ingredients, especially with initiatives like “Make America Healthy Again” led by Health and Human Services Secretary Robert F. Kennedy Jr.
This initiative aims to address the national health crisis by focusing on preventive care and examining food production and nutrition. Regulatory bodies are intensifying scrutiny on ingredients that have been used in trusted products for years, such as calling for the replacement of artificial dyes by 2026.
Consumers are becoming more knowledgeable about product ingredients, and with initiatives like “Make America Healthy Again,” brands are taking proactive steps by allocating funds for research and gaining leadership support for redevelopment.
States like West Virginia have implemented strict bans on synthetic food dyes, signaling a bipartisan push towards a safer food system. Brands are under pressure to adapt to these changing regulations and consumer demands.
Brands must act promptly
Navigating evolving consumer expectations, inflationary pressures, and increasing regulatory requirements is a significant challenge. Reformulating products to meet new standards or consumer preferences can be costly and may compromise the elements that made the product successful, such as taste or functionality.
The risk of reformulations missing the mark is damaging consumer trust, eroding brand equity, and disrupting production and supply chains. On the other hand, delaying necessary changes can leave brands struggling to catch up or being surpassed by more agile competitors.
Consumers are demanding higher-quality products with transparency and cleaner labels. Brands in the consumer goods and food service industries must prioritize better ingredients, improved formulations, and consumer-driven innovation to stay competitive.
This period presents both challenges and opportunities. Brands that address these pressures with transparency and a focus on delivering exceptional products aligned with consumer values can differentiate themselves and foster strong customer loyalty.
While the products we grew up enjoying may be at risk, brands that prioritize quality, trust, and relevance can not only survive but thrive in today’s evolving landscape.