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
During the past year, 6 percent of food and beverage Pacesetters boasted a gluten-free claim to accommodate those with celiac disease, as well as others who feel that gluten-free eating offers health benefits. To that end, other manufacturers, including Frito-Lay, added a gluten-free label to appropriate existing product lines to raise awareness among consumers.
SymphonyIRI's "15 Years of New Product Pacesetters" report shows new product average year-one sales declined from $35 million in 2002 to less than $25 million in 2011. Indeed, new products are becoming increasingly targeted to the needs and wants of smaller, more discrete consumer segments.
The trend toward highly targeted new products, whether line extensions or net-new brands is strengthening. With the growing presence and power of social media, as well as the potential to innovate freely and creatively, the "go to market" playing field is a bit more level.
Across most beverages, the pace of successful innovation remains on par with historic norms in 2011. But activity in the coffee and tea sector was quite high, driven heavily by the proliferation of single-cup coffee products designed for Keurig coffee machines.
For the year, nine coffee and tea innovations achieved New Product Pacesetter status, versus an historic average of four per year between 2002 and 2011. Five of those nine coffee and tea launches included single-cup, K-Cup coffees, making the enjoyment of a fancy beverage quick, easy and portable. Folgers Gourmet Selections K-Cups ($54 million) was the top-selling single-cup coffee launch.
Green Mountain Coffee-branded K-cups were among last year's Pacesetters. And that same Mountain launched multiple Pacesetter K-Cup coffee brands for 2011, including Caribou Coffee, Tully's and Donut House Collection. Starbucks Coffee Co. also joined the K-cups craze.
Gold Peak Chilled Tea ($44.3 million) was the pause that refreshed, and Folger‘s Gourmet Selections K-Cups ($54 million), was the top-selling single-cup coffee launch, and one of two J.M. Smucker brands to achieve New Product Pacesetter status. Millstone was the other.
At first glance, it appears innovation in the carbonated beverage, sports and energy drink arena – normally hotbeds of activity -- was down. Actually, the number of new brands achieving Pacesetter status in this area was on par with historical trends, at five – just none of them made the top 10. For the year, Pacesetters in this group represented about $27 million in year-one sales, or 23 percent of total beverage Pacesetter dollars. This is well below the historical average of more than $58 million in year-one, a shift caused by the adoption of a focus on more targeted beverage innovation.
According to SymphonyIRI's 2011 State of the Snack Industry report, snack frequency is on the rise, with increases occurring across dayparts. CPG marketers are aware of and playing to this trend.
Consumers' quest for experiential eating is driving significant growth in food and beverage variety, with new products bringing excitement to both healthier-for-you and indulgent food and beverage categories. Leverage consumer-centric brand extensions as a tool to maintain brand vitality and consumer engagement, while stepping up efforts to bring truly new innovations to market, where feasible
Manufacturer efforts to cater to home-based eating rituals and an increasing focus on targeted/niche market innovation helped support growth within the food and beverage arena. Be on the lookout across and outside of the CPG industry for emerging consumer trends and associated opportunities to develop products that meet consumers' needs/wants.
Successful candy and gum launches represented 19 percent of food New Product Pacesetter dollars, more than double their average share 2002-2011. Mars is a driver of candy and gum innovation trends, and the company placed four brands in the Top 20 food and beverage New Product Pacesetters, including two chocolate products (M& M's Pretzel and Snickers Peanut Butter Squared) and two gum products (Wrigley's 5 React and Wrigley's Extra Dessert Delights). Together, these products play to a range of key snacking trends.
More consumers are trying to eat healthier, up from 76 percent to 87 percent in just three years, according to SymphonyIRI's annual Consumer Snacking Survey, and healthier living has become a key means of managing medical expenses. Given this powerful trend, it is logical that manufacturers are embracing new ingredients and new technologies to raise the bar on the taste and texture of healthier-for-you food and beverage options.
A healthy-spin on an indulgent product, made possible by adoption of a more natural approach to manufacturing, is Oscar Mayer Selects ($69.2 million), frankfurters, which contain no artificial preservatives and only naturally occurring nitrates and nitrites.
PepsiCo is another historical contributor to the New Product Pacesetters. This year it, too, brought to market products that landed just outside of the top 10. Two products come from Gatorade's G Series line. Gatorade Prime is a pouch filled with pre-game fuel designed to give your body the energy it needs to own the first move. Gatorade Recover is an after-workout beverage with protein that helps to rebuild muscles.
"The Pacesetters of today, having beaten the new product odds regardless of a difficult and complex environment, are truly remarkable," says Larry Levin, executive vice president of consumer insights at SymphonyIRI. "It all begins with really listening and responding to consumers. Manufacturers taking the time to gain an intimate knowledge of the needs and wants of their consumers are cracking the code on true innovation."