Demand for natural foods is changing iconic products

WASHINGTON – Consumer demand for healthier and more natural ingredients is prompting a growing number of corporate giants, including Hershey Co. and McDonald's Corp., to overhaul iconic products they sell, a trend industry watchers say is just getting started.

The shift toward simpler ingredients has gained momentum the past few years as people become more interested in knowing what's in the food they eat, and don't hesitate to air their concerns on social media. Major retailers such as Wal-Mart, Costco and Whole Foods, cognizant of what consumers want, have pushed food producers to make sweeping changes to the products they supply to them.

Food manufactures have started responding by replacing artificial colors and flavors with natural ingredients to create what the industry calls a "cleaner label." Other companies have removed genetically modified ingredients from their products, supplied pork and chicken raised under conditions viewed by some as more humane, and shunned animals given antibiotics also administered to humans.

"I think it's really just the beginning. It's only going to get more intense," said Ken Cook, the president and co-founder of the nonprofit Environmental Working Group. "This is still the country where the customer is always right. I think companies rushing to clean up their labels to respond to consumer demand, like McDonald's and others, that's an indication of the direction."

In February, Nestlé USA, a division of Switzerland food giant Nestlé S.A., announced it will remove artificial flavors and colors from more than 250 chocolate products by the end of the year.

For example, instead of Yellow 5 and Red 40, the crunchy center of a Butterfinger will be colored by annatto, from the seeds in an achiote tree. And in its Nestlé Crunch Girl Scouts Caramel and Coconut bars, paprika and cocoa powder will replace Blue 2, Yellow 5 and Yellow 6.

"It wasn't done because we want to create a PR moment. It was done because we are finding more and more consumers are reacting to things like artificial. They want more naturals," said Paul Bakus, head of corporate affairs with Nestlé USA. "These brands that we have are iconic brands — and we want consumers to continue to think of our brands versus the competition."

Bakus said that while some of the new ingredients will be more expensive for Nestlé, consumers won't feel the impact. "They shouldn't have to pay more for a product that doesn't have artificial" flavors, he said.

Nestlé has already made similar changes in the United Kingdom, giving it previous experience in removing artificial ingredients.

Even though artificial colors used by food companies have been approved by the Food and Drug Administration, consumer advocacy groups such as the Center for Science in the Public Interest have argued they could be harmful to a person's health, leading to hyperactivity, allergic reactions and other illnesses. A 2014 study from the marketing research firm Nielsen showed that more than 60 percent of Americans said the absence of artificial colors or flavors is important to their food purchase decisions.

Sophie Ann Terrisse, chief executive of the brand-management firm STC Associates, said companies unwilling or unable to find new ways to produce or supply products risk falling behind competitors that are keeping up with changing consumer demand.

"The consumer is pretty much in the driver's seat," said Terrisse, who has worked with Johnson & Johnson and Weight Watchers. "A consumer can make or break a brand with a post, with a review, with a comment and an idea. Any brand has to listen today harder than they've ever listened."

Nancy Gilly, 68, of Des Moines said while shopping at a Des Moines Hy-Vee on Friday that she looks at nutrition labels more now than she did when she was younger.

"I think the older we get, the more we start watching," Gilly said. "You have more health issues, so you do watch. There's no choice."

Gilly said she supports companies simplifying nutrition labels. When she knows what is in a food item, Gilly feels "more confident about throwing it in the cart," she said.

Charmaine Wade, 62, of Des Moines said she would likely look at nutrition labels more if they were simpler and more understandable.

"And in bigger letters," Wade added.

This year, Hershey Co. announced it will use simpler ingredients in its candies, beginning with its popular chocolate bars and Kisses in 2015 before moving on to its other 80 or so brands. The company is ditching artificial vanilla in favor of the real thing, and switching to non-genetically modified sugar and milk from cows that have not been treated with growth hormones. Polyglycerol polyricinoleate, an emulsifier used to thicken the chocolate, is being replaced by cocoa butter.

But Hershey officials said the company has to be careful it does not change the flavor or texture of its products. Increasingly, companies are putting more information on their websites about what's in their products, and if an ingredient has to stay, why. In the case of Hershey, for example, the confectioner says it's difficult to create vibrant reds, greens and other colors in its Jolly Ranchers and other candies without using artificial colors.

"At the end of the day, no matter what we do it's still down to consumer choice," said Jeff Beckman, director of communications with Hershey. "We all know the old tired saying that they vote with their dollars. If you don't do it right and the product doesn't taste right to consumers, they will vote against us."

Cook with Environmental Working Group said brands are no longer "bulletproof." For decades, companies pumped billions of dollars into promoting and shaping the way their products were perceived through television, billboards, magazines and newspapers.

But now with the surge in blogs, Facebook, Twitter and other tools, the way the public goes about forming an opinion has changed. It can only take a single blog or tweet to catch fire and churn up a discussion that wouldn't have happened a decade ago. "It can be very threatening to a brand," Cook said. "Brands are not as robust. They are very vulnerable."

To help minimize the impact, Cook said food, personal care and cleaning product companies have asked the nonprofit for advice on ingredient changes.

Early last month, McDonald's, the world's largest restaurant chain, said it would gradually stop buying chicken raised with antibiotics used to treat human infections during the next two years. And giant retailer Costco Wholesale, which sells 80 million rotisserie chickens annually, recently announced it is working with suppliers to restrict antibiotics in chicken and meat.

Consumer groups and lawmakers have been pressuring the White House, drug manufacturers and livestock producers to act after bacteria have started to become resistant to the antibiotics when they are given to humans.

The FDA asked drug companies to stop labeling antibiotics as acceptable for growth production in animals if those drugs also are used to treat infections in humans. Most firms, including Boehringer Ingelheim Vetmedica with operations in Fort Dodge, complied. In March, the Obama administration proposed a plan to reduce the use of antibiotics at farms and hospitals as part of a five-year effort to fight antibiotic-resistant bacteria.

Tyson Foods said it has reduced human antibiotics in its chicken operations by more than 80 percent since 2011, and expects more cuts. The largest U.S. meat processor said it worked closely with McDonald's and supported the restaurant's decision.

Donnie Smith, the head of Tyson, said young adults 18 to 34 have been instrumental in forcing companies such as his to be more transparent. As part of that push, the company has become more engaged on social media and encouraged farmers to communicate with the public what happens on their farms each day.

"Think about America today: We are two or three generations off the farm now and so most Americans aren't intimately familiar with what happens on the farm or how the food moves from the farm, to the grocery store, to the restaurant, wherever," Smith said at a recent food summit in Washington. "So it's important for us to be more and more transparent."

— Register staff writer Katherine Klingseis contributed to this story.