For the past 16 years, Chicago-based Information Resources, Inc. (IRI) has crunched numbers on crackers, dug up data on Doritos, and analysed analgesics and other consumer packaged goods that have launched onto store shelves in a given year. That new product debut in the marketplace is just the tip of the iceberg; it’s followed by tracking months of data, which is then followed by more months of reviewing the data from all sides to see what it’s saying about consumers, products, buying habits, and more.
The end result is the annual New Product Pacesetters report, which tames the jungle of knowledge into a concise and readable forest, and tells the story of the new products to hit store shelves, and highlights those products that set examples for new product launches.
This year, the New Product Pacesetters report went to new depths thanks to the data pulled for new product launches. In years past, IRI looked at data that came from the traditional FDMx channels. That is, grocery, drug, and mass merchandisers, excluding Walmart. But this year, explains Susan Viamari, editor for IRI’s Times & Trends, “Products were measured across what we call the multi-outlet geography.” That, she continues, includes grocery, drug, and mass merchandise channels, plus dollar and club channels and Walmart. Analysing in a broader geography means a 54 percent increase in distribution coverage and a more robust picture of what’s happening in the consumer packaged goods industry, Viamari says.
“The impact of this deeper data is huge,” Viamari adds. “Where we are looking at the differences in the pure number of introductions in 2012 versus earlier years, we’re seeing a significant jump. Some of that is innovation, but it’s also because some of the new products may only be available in Walmart, club and/or dollar stores, or they may get a majority of their distribution in these channels, and not in just traditional FDMx channels. It’s a bigger universe.”
While the analyses may have changed, one thing about New Product Pacesetters has stayed the same: these products are a key lens through which marketers should look to understand consumers’ desires and shopping habits, and see what products have – and will – hit the mark with consumers.
And, which new products were bulls-eyes with consumers. In 2012, seven new food and beverage products raked in more than $100 million in sales across IRI’s multi-outlet geography, including Dannon Oikos Greek yogurt, TrueMoo milk, MiO drink mixes, and Bud Light Platinum beer. In non-food, the prescription to over-the-counter switch for Allegra topped the list with more than $342 million in sales, and PetArmor fl ea and tick treatment rolled with the big dogs, bringing in $126.4 million in sales. While coffee and tea as a whole contributes about 15 percent to average annual total consumer packaged goods industry dollar sales, new coffee and tea products accounted for 33 percent of 2012 food and beverage Pacesetter dollars, thanks in large part to the launch of Starbucks K-Cups, which helped to drive category growth rates to remarkable heights.
Consumers are creatures of habit, and the trends threading through this year’s report are evidence of that. Many of this year’s key trends are evolutions of existing trends and themes that have been growing steadily in recent years. For example, in 2011, 20 percent of convenience-oriented food and beverage Pacesetter brands were either hand-held or bite-sized forms. In 2012, 26 percent hold those same attributes. But, while convenience such as this is prevalent, it has become secondary to other themes. The primary food and beverage themes in recent years have been health, wellness, and indulgence. These trends are growing and evolving, and are becoming more and more entwined.
“We are seeing wellness and indulgence spinning into one another,” Viamari says. “Consumers are looking to eat healthier, but they still want treats as well. So, the two trends are converging and innovation in this area is making it easier to find relatively healthy indulgences these days.”
Another example of commingling of trends is anti-aging and prevention, which hit hard in the non-food segment of Pacesetters. Moisturizers that prevent wrinkles, or toothpastes that whiten teeth and prevent enamel erosion, for example, have struck a chord with consumers.
“There is a strong theme of prevention in the marketplace today,” Viamari notes. “Many are targeting anti-aging opportunities. There are products that nourish hair or skin more, or take a more holistic approach to health and beauty care. These types of products are appealing to a broad spectrum of shoppers. Those aged 55-plus, for instance, are managing ongoing conditions while trying to stay ahead of potential age-driven pitfalls up ahead. Meanwhile, millennials are starting in their early days. They are hitting on that fountain of youth, trying to ward off wrinkles and other signs of aging before they even begin to emerge.”
Healthy, wealthy, and wise
There are many factors that keep consumers wanting more of a good, familiar thing. First, who doesn’t like tasty and exciting food and beverage options that are healthful and offer pure, unadulterated indulgence? Who isn’t receptive to cleaning products that make it quicker and easier to get housework done? Who wouldn’t want a moisturizer that also reduces blemishes and wrinkles? That these options provide excitement and indulgence that fit into a tight budget is all the more appealing.
“The fact is that the economy is still very unsettled, and, last year, we had an issue with inflation,” Viamari explains. “A lot of the inflationary pressure was due to weather and crop issues rather than a spiraling economy, but the result is the same—more pressure on consumer budgets.”
A look at the Pacesetters shows, however, that while consumers are keeping a close eye on their purse strings, they’re willing to open their wallets if they feel the product is worthy, and if it meets their needs at a reasonable price tag.
“Value does not necessarily mean cheap,” according to IRI’s report. Sure, consumers are still struggling. Recent job reports show job growth slowing down, and there are mixed economic signals coming from across the globe. Still, consumers don’t want to go without. Some may pay for premium hair colour in a box, because even though it’s more expensive versus other boxed options, it provides salon-like results with a price tag that is a lot lower versus going to a salon for professional services. Others will pay a premium for Greek yogurt, which is more expensive than a traditional yogurt, but provides more in the way of satiation and can serve the role of a meal Replacement.
“It’s important to understand that value to me is different than value to you, versus value to someone else,” Viamari emphasises. “Everyone looks at products differently, so marketers really need to understand the mindset among their target consumers — what does value mean to that key audience?”
The world is changing
Food and beverage marketers need to know their target consumer, but they must also know the role their product is perceived to play in consumers’ daily diet. How does that perceived role match up with corporate goals and expectations? Is there opportunity to grow and change that perceived role to open the door to opportunity across additional dayparts? Indeed, determining the answer to that last question is becoming a little trickier every day, but it is a key to maximising growth potential. IRI’s 2013 State of the Snack Industry report illustrated a strong trend toward increased snacking frequency.
“During the past three years,” Viamari says, “the percentage of consumers who say they snack one to two times daily declined 15 points. Meanwhile, share of consumers snacking three or more times daily has increased sharply. ” A look across dayparts, she continues, is consistent with the notion that people are moving away from the traditional three square meals. Instead, they might grab a yogurt at 11 o’clock, and a granola bar at one or two o’clock.
“That’s your lunch,” Viamari says, “but you’re spreading it out through the midday hours.” This new way of looking at eating has further blurred the already hazy lines of eating occasions, and the top Pacesetters reflect the power of this trend. For instance, the blurring of eating occasions is being supported by increased prevalence of products suited for on-the-go consumption.
Nature Valley Protein Bars and the KIND Plus snack bars are not only portable but have added protein, vitamins and/or nutrients that provide satiation and health benefits, and products like the Tyson Mini Chicken Sandwiches are microwave ready in moments, so consumers can grab one on the way out the Door.
“Eating occasions really have blurred,” Viamari says. “Today, powerful innovation is delivering more to fast-moving consumers. They provide new options that serve crossoccasion eating behaviours, support proactive wellness efforts and satisfy desires for intelligent indulgence.”
Small but mighty
While more than a few of this year’s class of New Product Pacesetters launched from companies with strong brand recognition, smaller companies still play a big role in driving trends and innovation.
“Smaller companies can, and do, play a big role in driving industry change by bringing to market unique products that really identify critical consumer needs and wants,” the report states. Last year, gluten-free products fi lled an important niche for consumers, and this year, products such as Talking Rain’s Sparkling ICE beverage have grabbed the spotlight.
“Increasingly, shoppers are looking for products that are more tailored to their specific needs,” Viamari says. This method of targeted innovation has not stemmed consumers’ desires for broad-appeal products or slowed down “blockbuster” innovation. As mentioned earlier, top introductions across food and beverage and non-food alike are products that have a broad base of appeal. But, more finely targeted innovation opens the door to new, more specialised growth opportunities.
“You can do well with widely targeted innovation,” Viamari says, “just don’t overlook opportunities to supplement those ‘big picture’ efforts with smaller, more nuanced innovation. These products, too, provide sizable growth opportunities for CPG marketers.”
And next we have…
While the Pacesetters of 2012 are enjoying their day in the sun, a bevy of new products are waiting in the wings — or should we say store shelves — to take their place. IRI notes some of the “Rising Stars” they’re seeing, many of which mirror themes evidenced among Pacesetters of today. These Rising Stars, it should be noted, won’t complete their fi rst year of sales until 2013. Because of the timing, they weren’t eligible to be a 2012 New Product Pacesetter.
Yes, that’s right: More single-cup brewed coffee. But more than that, products that “avow that the blurring of eating occasions will only intensify,” Viamari says. “CPG marketers really need to think outside the plate. Consumers lead on-the-run lifestyles, and they need food and beverage products that make it easy for them to fuel up without slowing down.”
The idea of broadening horizons goes beyond just thinking outside the plate, though. It is a mistake to think of a brand as only playing a single role in consumers’ daily diet. Today, the CPG aisles are replete with products and ingredient combinations that would never have been thought viable just a few years back.
And in non-food, Rising Stars are commonly products that do more than one thing or offer unexpected benefits: for instance, razor blades that cut a close shave while also nourishing the skin; mascara that gives volume, but is Waterproof.
Above all, innovators across CPG aisles need to continue to look far and wide for new, perhaps unexpected, opportunities to drive Growth.
“The world has gotten bigger,” Viamari explains. “Today, we don’t just have plain fried or hard-boiled eggs; we have egg sandwiches and egg burritos. Fruit is now available in squeezable pouches. And, the largest ‘home care’ launch of the year is an air freshener designed specifically for the car. ”
What consumers want, consumers will get as CPG marketers continue to look for ways to raise the bar and deliver more. With a lot of marketing prowess and just a bit of luck, the new products of tomorrow will hit mark, setting the pace for products that follow .