Brand extensions dominated in 2004

Packaged food sales were fairly flat in 2004 with few firms making any real headway, according to a new report from Information Resources Inc. "Less than 1 percent achieved over $1 million in year-one sales," said the company in its annual New Products Pacesetters report.

The most successful new food and beverage products played to consumers’ desires to manage weight and improve their overall health, while simplifying their lives through added convenience. The report predicted that these trends will continue with increased demand for food and beverage products (beyond energy and sports drinks) offering energy and vitality, specific disease management benefits, hearty satisfying meals and premium indulgence.

Brand extensions dominated the past year. Over the past 10 years, said the report, new brands have dropped from an average of 13 percent of new product pacesetters (actually hitting a high of 22 percent in 1997) to only 6 percent today.

The past year's winners in the brand extension stakes were Pepsi Vanilla, Diet Coke with Lime and Sprite Remix, with each earning more than $100 million in year-one sales. Offerings such as Yoplait Nouriche smoothies and Healthy Choice Flavor Adventures frozen dinners were popular as they allowed consumers to “manage weight but still enjoy flavor.”

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