CPG boosts new-product impact by targeting innovation

May 15, 2013

IRi’s latest look at new items tells what it takes to set sales pace and help lift categories.

CPG brand marketers released 1,862 new products into a crowded marketplace in 2012—690 in food and beverage, and 1,172 in nonfoods.

The Top 200 sellers among these are IRi’s New Product Pacesetters—100 in food/beverage and 100 in nonfoods.  These launches best attracted the 20% of consumers who “always look” for new products to try, plus other financially confident consumers.  Together, their new-item uptake and willingness to experiment give worthy products first-year sales momentum across multiple retail channels. 

To identify Pacesetters, IRi now measures beyond FDM channels to include sales at Walmart, dollar, club (Sam’s, BJ’s) and military commissaries as well.  IRi’s latest annual study, issued in April 2013, shows that 2012 Pacesetters averaged year-one retail sales of $39.5 million and rang up a collective $7.9 billion.  By contrast, 68% of new CPG launches posted year-one sales of $7.5 million or less across multiple outlets, says IRi.

In a lackluster economy, where nearly one-fourth of U.S. households find it difficult to pay for regular groceries and aren’t inclined to buy unfamiliar items, this standout performance stems from targeted innovations—such as gluten-free, protein-rich or functionally enhanced foods, easy prep or portability.  Not surprisingly, the latest crop of Pacesetters gained leverage from known brand names—82% in food/beverage and 91% in nonfoods are brand extensions.

The Top 10 food and beverage Pacesetters of 2012 include:

  • Dannon Oikos yogurt, $283.8 million in year-one sales across multiple outlets.
  • Starbucks K-Cups coffee, $198.9 million.
  • Bud Light Platinum beer, $162.2 million.
  • TruMoo milk, $158.3 million.
  • Breyers BLASTS! ice cream, sherbet, $147.3 million.
  • MiO brink mixes, $127.6 million.
  • Sparkling ICE bottled water, $122.7 million.
  • Nature Valley protein bars, $95.7 million.
  • Orville Redenbacher’s Pop Up Bowl, $92.1 million
  • Daily’s Frozen Pouches premixed cocktails, coolers, $89.2 million.

Their effect on category sales can be significant.  For example, while Dannon Oikos is key to breakfast solutions’ dollar sales growth of 12.1% between 2009 and 2012, so are launches of Eggo Wafflers and KIND Plus snack bars; portability is their common theme.  Similarly, introductions of TruMoo, MiO and Sparkling ICE raised dollar sales in the milk-juice-water sector by 8.4% between 2009 and 2012, says IRi. 

“Variety innovation across the food and beverage arena is clearly playing to the blurring of eating occasions, while simultaneously reflecting numerous long-standing trends, including flavor excitement and on-the-go eating,” the IRi report states.  It further notes the five most common benefits offered by the 2012 Pacesetters:

  • Distinctive new flavor or flavor combination (offered by 65% of Pacesetters)
  • Improved/authentic flavor (47%)
  • New product design/look (29%)
  • Bite-sized/hand-held (27%)
  • New use/approach in existing category (24%)

With 64% of consumers telling IRi they try to eat healthier, it’s no surprise that 27% of the 2012 Pacesetters tout better-for-you benefits.  Specifically, 41% claim “real/100% real”; 37% say “good source of vitamins/minerals”; 33% say “less calories/sugar”; 30% say either “more natural/organic,” “good source of protein,” or “fiber/whole grain’; and 22% say “less/reduced/no fat.”