Noodles & Company to Eliminate Artificial Food Ingredients - Analyst Blog

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The latest trend at U.S. eateries is to serve a healthy menu, owing to consumer preference for fresh, organic, nutritious and low calorie food. Rising health concerns and increasing awareness about obesity and related diseases have led to the shift in consumer preference toward healthy and "good for you" products. Keeping with the trend, Noodles & CompanyNDLS has laid out plans to eliminate unnatural and unhealthy ingredients from its products. In its first quarter 2015earnings callon May 5, the company announced that it plans to remove all artificial colors, flavors and preservatives from its soups, sauces and dressings by the end of the third quarter.

This restaurant that offers noodles and pasta, soups, salads, and sandwiches is testing naturally-raised, antibiotic-free chicken at its restaurants (started in 2014) and is working with its suppliers to expand this initiative throughout the nation over the rest of 2015 and into 2016.

In fact, this fast-casual chain already offers antibiotic-free, vegetarian-fed pork system-wide as well other sustainable ingredients, which include cage-free eggs and organic tofu, milk and tea.

Increasing Demand for Natural Ingredients

With this move, Noodles & Company joins a long list of companies including Chipotle Mexican Grill, Inc. CMG , Panera Bread Company PNRA Pepsico, Inc. PEP , McDonald's Corp., The Hershey Company and Kraft Foods Group, Inc. that are pushing for food items made of natural ingredients

While Panera Bread plans to remove 150 artificial ingredients from its kitchens by 2017, McDonald's stated that it will discontinue the use of chicken raised with antibiotics at its U.S restaurants that are important to human medicine within the next two years. Also, recently, Pepsico decided to drop the artificial sweetener aspartame from Diet Pepsi. Kraft Foods Group stated that it would remove artificial dyes from its mac and cheese. Not only this, Hershey has also announced plans to eliminate high fructose corn syrup from its candy products.

However, we believe it will be difficult for these companies to eliminate or change ingredients and at the same time maintain the same taste. At the end of the day, customers want good and tasty food. While making the changes, these flagship brands will have to be very careful about not altering the taste that consumers are used to. Chipotle had reportedly experienced some negative publicity when it announced its intention to eliminate genetically modified ingredients from its menu.

Noodles & Company has a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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