Finding the Recipe for Success
Change isn't always a bad thing.
Changes in companies' signature recipes happen more often than people might think. Recent health kicks have sent several famous companies back to the measuring cups to make their products more consumer-friendly. Companies from Yum! Brands' (YUM) KFC to McDonald's (MCD) have tried to reduce the trans-fat in their products that comes from the partially hydrogenated oils used in cooking and baking. But not all companies succumbed to the change easily; in 2003, a lawsuit was brought against Kraft Foods (KFT) for the trans-fat used in its Oreo cookie recipe. The chocolate and cream sandwich cookies have been around for almost a century, but the original recipe hasn't endured. Kraft eventually crumbled under the pressure and eventually changed the recipe of its famous cookies.
But trans-fats haven't been the only health issues to crop up in foods loved by the masses. High salt and sugar contents have also pushed companies to make the switch. General Mills (GIS) announced in early December that it would be cutting the sugar in its most highly marketed children's cereals, including Lucky Charms, Trix, and Cocoa Puffs. The change came after a study by the Rudd Center for Food Policy and Obesity showed that the least-healthy breakfast cereals were the most aggressively marketed to children. General Mills, along with Kellogg (K) and Post Foods, have reduced the sugar content of their cereals over the last two years, as well as added more whole grains and other nutrients.
Sometimes great marketing can pull a brand through this often awkward transition. In 1997, Burger King launched a $70 million advertising campaign to push the new recipe for its French fries, claiming they were better tasting than McDonald's French fries. The new fries were treated with potato starch so that a coating formed as they emerged from the fryer, giving the potatoes a hotter, crispier taste. The company admitted that its original fries were inferior in taste to its competitor, which, at the time, held more than 40% of the market share, compared to Burger King's 20%.
See the slideshow below to find out about the success and failure of other brands that have tried to change their recipes.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter