Kraft Mac & Cheese is trying to maintain its dominance with flavor drops and new shapes

With Kraft Mac & Cheese’s latest product, the 87-year-old brand is taking a page from hip streetwear companies.

By Robin Ray | Dec 02, 2024 Updated 03:16 p.m. ET

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The pantry staple is forgoing its usual strategy of a nationwide release at grocery stores for its newest offering. Instead, it’s emulating “drop” culture, often seen in the sneaker world, by releasing a limited number of boxes of its everything bagel flavor to capture buzz and (if it’s lucky) TikTok notoriety.

Available Friday exclusively on Walmart’s website, Kraft is selling just 15,000 boxes of its limited-edition everything bagel flavor. That represents less than 2% of the number of boxes of its original version sold every day, according to the company.

Kraft’s take on everything bagel seasoning has garlic and onion powder plus poppy seeds but doesn’t contain sesame seeds commonly found in other iterations.

For Kraft, the unorthodox marketing approach is an attempt to drum up excitement for the pasta, which is still the top-selling boxed mac and cheese brand in the United States but has seen its dominance decline in recent years as new competitors entered the space.

Squeezed in the middle

Lately, consumers are either splurging for pricier, health-focused brands (i.e. protein-packed Goodles and organic mainstay Annie’s Homegrown) or gravitating toward cheaper, private label brands that cost about half the price of a box of Kraft. That has put these middle-tier brands in a precarious position.

The brand’s struggles are indicative of the broader problems the “center store” category (a.k.a consumer packaged goods that are the bulk of grocery store sales) are facing, according to Connor Rattigan, a senior research analyst at Consumer Edge.

“There’s multiple headwinds,” he told CNN News. “Consumers are either seeking value, or people are seeking healthier alternatives. Whenever you’re the category leader, sales trends will roughly reflect what’s going on in the category.”

Kraft holds a commanding 41% of the total shelf-stable macaroni and cheese market share, but that is a decline of nearly 2% since 2021, according to Numerator, a consumer insights firm. Velveeta, also owned by Kraft Heinz, sits in second with 21% and its market share has been chipped away, falling nearly 3%.

Both brands are ceding ground to private label options, including Walmart and Aldi, which both grew 3% since 2021 and currently hold 14% share. Meanwhile, Goodles and Mac-A-Roni, a newly released spinoff of PepsiCo’s Rice-A-Roni, have seen the most share growth this past year, Numerator’s data shows, further posing a problem to Kraft’s supremacy.

Adding new flavors is one approach that Kraft is taking to secure its top-selling position. The brand held a “Fan Flavorites” contest on its social media for people to suggest new flavors with jalapeno and ranch being the two recent winners. The new flavors are often priced higher than the traditional versions as well.

Kraft is testing more than 60 potential new flavors and will experiment with their releases, including possibly another “small batch” drop sold exclusively online. That could help attract younger eaters, according to Andrea Hernández, founder of Snaxshot, a food and beverage insights platform.

“Millennials and Gen-Z are more inclined to deviate from ‘traditional’ flavors — a strategy that Oreo is well known for — and putting absurd flavors out there to attract virality but also make consumers nostalgic for the original,” she told The NewYorkBudgets.

Shape shifting

Besides the taste, Kraft is rethinking the strategy behind its pasta shapes.

For the past three decades, Kraft Mac & Cheese has been sold in more than 40 licensed designs, ranging from “Rugrats” to “Spongebob Squarepants,” targeting families with younger children. Now that these kids have grown up with the brand, Kraft is gradually adding designs to attract young adults.

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“We found there’s a nice little intersection that started to happen through properties that were becoming popular with families and kids and also this hunger and need for nostalgia that we’re seeing with young adults,” Ashleigh Gibson, head of marketing for Kraft Mac & Cheese, told The NewYorkBudgets.

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The first concept rolled out this year: “Super Mario Power-Up” shapes that has pasta designed after elements from the video games, including Fire Flower, Super Star and Super Mushroom.

Rattigan sees these innovations as Kraft acknowledging that they “need to invest more and really work on the brand, as well as drive increased consumer interest,” but he said it’s “not going to be an overnight fix.”