Top-Selling Food and Beverage Products of 2011: Targeted Innovation Rules the Day
This year's SymphonyIRI New Product Pacesetters appeal to increasing at-home consumption.
By Diane Toops, News and Trends Editor | 04/30/2012
Even in times of plenty, bringing new products to market is challenging. So in this time of not-yet-plenty, it is not shocking to see the pace of new product innovation within the consumer packaged goods (CPG) industry on a downward trend.
In 2011, overall brand introductions were off 3 percent from last year and numbered 13 percent fewer versus 2008 levels. However, in contrast to declining non-foods new product introductions (from 957 to 896), new food & beverage products and brands rose slightly from 647 in 2010 to 665 in 2011, according to the 2012 New Product Pacesetters report from Chicago-based Symphony IRI Group (www.symphonyiri.com).
Most launches fail to garner more than $7.5 million in year-one sales across food, drug and mass channels (excluding Walmart), thereby not meeting the first criterion for SymphonyIRI New Product Pacesetters. Launched between February of one year and January of the next, new products also must achieve 30 percent national distribution and complete a full year of sales (brands that do not are considered Rising Stars for the following year). Only 2 percent of 2011 new products achieved those criteria; only one broke $100 million in sales.
Food and beverage innovation fell, it could be argued, as 92 percent of this year's Pacesetters are brand extensions. Yes, this road is shorter and easier. Having established brand equity goes a long way to supporting new, related products, which add excitement and longevity to the life of the core brand in a relatively inexpensive and less risky manner.
But the easier road comes at a price Year-one sales of product line extensions are generally much lower than sales achieved by net-new brands. During the past 10 years, food and beverage line extensions averaged one-year sales of $27.7 million, about 9 percent less than net-new brands introduced during the same timeframe. New food and beverage products yielded average sales of $35.5 million in 2011, but the gap for brand extensions was much more substantial at $21.5 million, or more than 64 percent.
Despite prolonged economic difficulties, 22 percent of consumers are actively looking for new products to try, reinforcing the notion that new products are the lifeblood of the CPG industry, according to the Symphony IRI 2012 New Products Survey.
The best selling food and beverage launches brought restaurant and gourmet quality into the home kitchen, made snacking and on-the-go foods more fun with new textures, exciting flavor combinations and convenience, and were highly targeted.
Two-thirds of food and beverage 2011 New Product Pacesetters bring distinctive flavors, new flavors or new flavor combinations into the marketplace, a substantially higher focus than in recent history, and occurring across aisles, categories and manufacturers. Kellogg launched seven brands with distinctive/new flavors, and General Mills launched six.
On the healthier-eating front, the most common wellness-related benefit among 2011's Pacesetters is natural and/or organic ingredients. In fact, 23 percent of the top food and beverage launches were natural/organic, versus a historical average of 19 percent.
Consumers looking to eat well without derailing their dietary efforts are in luck, too. You can create mornings that shine with Thomas' Bagel Thins ($73.6 million). And, with Kellogg's Special K Cracker Chips ($50.6 million), you can have your chips and eat them too! It's a perfectly seasoned way to satisfy your salty snack craving. Both offer calorie-controlled indulgence without the guilt.
Taking a dive in 2011, innovation in two groups fell: breakfast solutions and sweet snacks. In the past, those categories were driven by snacks/granola bars and ice cream/sherbet.
Make mine dinner
With more than 55 percent of all shoppers eating at home today (more than prior to the recession), skewing new product innovation to complete dinner solutions accounted for 23 percent of total sales, compared to 18 percent on average from 2002-2011. The No. 1 Pacesetter brand, P.F. Chang's Home Menu line of frozen entrees from Unilever, touts signature bold flavors of Asian restaurant cuisine. Promising to "ignite the night" with meals that can be ready in less than 13 minutes to appetizers that are "too good to have just one," the line enjoyed phenomenal first year sales of $101.6 million.
Another frozen dinner/entree line that made the list was Nestle's Lean Cuisine Market Creations ($48.6 million), while Stouffer's Farmers' Harvest and Buitoni Riserva exemplify quick and easy meal solutions that offer variety, comfort and/or restaurant quality at a solid value.
In recent years, small companies have made quite a splash in the new products pool. Indeed, 2010's top-selling food launch was Chobani yogurt. With a purse-string advertising budget, this relative unknown brand took the country by storm, garnering nearly $150 million in year-one sales.
While a little late to that Greek yogurt party, Dannon's Oikos yogurt is one of the Rising Stars SymphonyIRI is watching for next year's Pacesetters.
You don't have to be big to make a big splash – or to be a Pacesetter. SymphonyIRI called out Denver-based Udi's Gluten Free Foods. The company (and brand) launched a line of gluten-free appetizers, breakfast foods, breads and desserts. And although it may not be $100 million blockbuster success story, these products fill a compelling need.
And shining bright among this year's Rising Stars is Talking Rain Beverage Co.'s Sparkling Ice, a line of fruit-flavored waters. They have no calories or caffeine but do have vitamin D, B vitamins and antioxidants.