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 Food companies are grappling with how to market brands such as Lean
Cuisine, Healthy Choice and Special K, and come out with new
products tailored to changing tastes. These days, companies say,
consumers care more about ingredients that are simple to understand
than they do about counting calories. They also want more ethnic
flavors, as well as foods that are higher in protein and
gluten-free.
Nestle will shift its Lean Cuisine frozen dinners from a diet brand
to one built around "healthy eating and healthy lifestyles," said
Jeff Hamilton, president of the prepared food division, in an
interview on Thursday.
The company, whose 2014 sales fell below its long-term goals, said
that its performance in North America was hurt by its frozen foods
business. Hamilton said the category has been declining annually at
an average of 2 percent in recent years.
Instead of retaining the brand's signature white box, which gave it
a "diet" look, Nestle said, the company will use new packaging with
bolder graphics to help Lean Cuisine stand out in the grocery aisle.
Nestle is also rolling out new ethnic flavors such as Sweet & Spicy
Korean-Style Beef.
"We have a heritage of being a diet brand, and we need to move to
where the consumer is going," Hamilton said in an interview.
The changes come at a time when U.S. consumers' perceptions of what
is healthy are changing. According to a Nielsen study of 30,000
people released in January, the number of U.S. respondents who said
they were cutting down on fats dropped 14 percent between 2011 and
2014. Meanwhile, the number of people who turned to diets low in
carbohydrates to lose weight increased 10 percent.
Eating smaller portions and fewer processed foods was also popular
strategy, the study said.
John Bryant, CEO of Kellogg, said in an interview last week that
consumers wanted snack bars with ingredients that appear to be
natural even if they are not low in calories.
"They're still buying bars, but they're often buying bars that are
higher in calories and higher in fat," he said.
The company is changing the packaging and advertising for its
Special K brand to reduce a focus on weight loss, as well as adding
varieties of bars with ingredients that consumers can see in the
product, such as fruit pieces and rice crisps.
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Kellogg is making the changes in response to sluggish sales in its
U.S. snack business, which declined 3.1 percent when adjusted for
currency and acquisitions in its fiscal fourth quarter, ended Jan.
3.
Investors should not expect to see immediate results from companies'
efforts to rebrand diet foods, however. In Kellogg's case, Special K
is "obviously something that has been challenging the business for
some time," said Morningstar analyst Erin Lash. "It definitely is
not something we expected to change and improve over night."
ConAgra Foods Inc says its new Healthy Choice Simply Café Steamers
are made with "100 percent natural chicken.” "As the definition of
health evolves, we evolve our meals," saidJenn Freeman, vice
president and general manager, through a ConAgra spokeswoman.
Consumers should also be skeptical that the new wave of foods
marketed as healthy will help them lose pounds. "Researchers say
that health and wellness foods carry a health halo that seduces
people into thinking the products have no calories," said Marion
Nestle, a professor in the department of nutrition at New York
University. "Alas, they do."
(Reporting by Anjali Athavaley)
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