How to Avoid a FMCG Reformulation Disaster

Humans are amazing at detecting differences in things, particularly in food and beverages. With our refined senses, we can distinguish small changes in taste, mouthfeel, appearance and smell.

Never before has consumer feedback on products been so transparent and instant.  When consumers are unhappy with a change in their usual product they are quick to jump onto Facebook and Twitter to voice their outrage.

When reformulating, FMCG producers must avoid alienating their loyal users.  If a new formulation is not liked or accepted by the current users of the product, then the producer risks losing precious market share and negatively affecting brand perceptions.

It’s not just small players who can fail to transition to a new formulation, any sized company can be at risk. Here are some recent examples.

Recent Reformulations Gone Wrong

In late 2013, Mondelez Australia decided to make Easy Mac ‘healthier’ and substituted the processed cheese with cheese powder. Consumers were quick to post comments on social media such as “It tastes weird. It is a vomitty flavour”. The consumer backlash was overwhelming and after a loss of over $10 million in revenue, Mondelez was forced to revert back to the original recipe.

In 2014, Coca Cola US changed the sweeteners in its Vitaminwater from fructose and sugar, to stevia and sugar in the hope of making it ‘healthier’. After the change, consumers hit Facebook with comments such as “The new taste is nasty. You just lost a customer. I can’t drink it now.”  Within a few months Coca Cola went back to the original formula saying “…We tinkered with the taste of Vitaminwater and our fans haven’t had the greatest things to say about it. So we are changing back to the taste you know and love…”

In early 2015, Cadbury UK switched the Cadbury Dairy Milk Chocolate in its Crème Egg for a cheaper chocolate. Again, loyal consumers of the product took to social media with passion.   This cost reducing reformulation, has cost the company dearly.  According to London’s Daily Telegraph, Cadbury lost £10 million in sales (AUD 20.6 million) from its best selling Easter lines last year.

In mid 2015, Nestle in NZ changed its iconic Milo product to attain a 4.5 health star rating. Consumers took to social media with their complaints such as “Omg!!! What have u done 2 milo? It tastes terrible!!!”

So in a time when we have so many resources available to ensure changes to product recipes are seamless and accepted by consumers, why is it that these blue chip FMCG companies got it wrong? Was it: poorly designed sensory research (or lack of it), that the projects were carried out by researchers with a poor understanding of how to interpret the results, DYI research platforms, inadequate action standards, incorrect respondent sample, budget constraints, or perhaps factors outside of their control?

Regardless of what went wrong in the above examples, there are steps to ensure that this doesn’t happen to you. 

Steps to Reformulation Success

• Define simple, clear objectives for the reformulation project. Typically most reformulations aim to either to improve the current product (eg where a product is failing to deliver on expectations) or match the current product (eg when an ingredient is changed).
• Develop several new prototypes that meet the objectives.
• Run the prototypes through a consumer taste test against the current product. This can be done internally or externally, however, it is important that the research is carried out with regular users of the product and not a random sample. These consumers are very familiar with your product and will act as an instrument to measure if the new formulations differ in sensory profile to the current product, whether or not the new formulations are well liked, and if moving to a new formulation would result in alienation.  The research should be properly designed with a rigorous methodology, have comprehensive product evaluation questionnaires, and be interpreted by a sensory scientist.
• And finally, once the results of the research have been reviewed against your initial objectives, a strategy for implementing the new formulation should be created.  You should consider whether you move forward with a direct replacement of the current formulation, stagger the introduction of the new formulation, introduce an entire new variant, be silent or overt in your communication, or go back to development.

When reformulating, FMCG companies cannot afford to offend their loyal consumers with an inferior or dissimilar product.  Ensuring acceptability of the new reformulated product amongst regular consumers of your product is critical for reformulation success.