Top Selling New Food Products of 2008

The new "kids" on the block: top-selling new products of 2008 focused on convenience, steaming technologies, full flavor and fewer calories, according to IRI’s annual list of Pacesetters.

By Diane Toops, News and Trends Editor

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Even in good times, launching a successful new consumer packaged goods (CPG) product is a daunting task. In a recessionary economy, new product successes are even harder to achieve as consumers count their hard-earned pennies.

New products are the life force of food and beverage manufacturers. A hit sustains consumer loyalty, drives profits and pays off the R&D costs behind less successful introductions. When a new product hits the ground running, it has the potential to be a Pacesetter, as defined by Chicago-based Information Resources Inc. IRI has tracked CPG introductions for 14 years via its New Product Pacesetters Report, which ranks each year’s most successful new brands.

The 2008 Pacesetters report is full of brands that used innovation to beat the new product odds and a recessionary economy. Pacesetters are those products launched between February of one year and January of the next that reach two milestones: 30 percent national distribution and retail sales of at least $7.5 million. After those criteria are met, IRI tracks them over the next 12 months to determine the most successful new products in their first year of “national” sales in food, drug and mass merchandising channels, excluding Wal-Mart.  

Successful brands and products have characteristics that make them unique and qualities consumers are looking for. Performance among top food and beverage introductions has remained steady over the past decade, with about 9 percent earning more than $20 million. 

2008 New Product Pacesetters

“These brands are truly remarkable,” says Anne Berlack, IRI’s Consumer and Shopper Insights Practice executive vice president. “Even in the best of times, approximately 75 percent of new products fail to earn more than $7.5 million during the first year of availability. In 2008, 78 percent of food products failed to break that revenue threshold. [The 2008] New Product Pacesetters faced unprecedented challenges and came out on top, even though last year was less kind than most.”

New brands vs. extensions

One would assume that given today’s economy, characterized by Americans eating out less and dining at home more, shoppers would snap up new products in an attempt to add variety to their home menus. Instead, they are staying with familiar brands that provide comfort, and they’re diversifying their meals through brand extensions.

There were 859 new food and beverage introductions in 2008 (excluding Wal-Mart), and an unusually high 94 percent of the Pacesetters were brand extensions. Historically, new food brands outperform brand extensions. However, this trend slipped over the past two years, and in 2008, brand extensions ($27 million) and new brands ($26 million) had nearly identical average year-one sales. 

2007 New Product Pacesetters

This downward slide across new products is partly attributable to the prevalence of brand extensions made with niche-market focus — such as organic products or those targeting specific health concerns or day parts. But it also reinforces the importance of innovation offering authentic and enticing product features.

In the face of mounting financial pressures, away-from-home dining activity saw sharp declines in 2008. Answering consumer needs for quick and convenient but novel solutions are Hormel Compleats (No. 5), DiGiorno Ultimate pizza (No. 6) and Tyson Any’tizers (No. 9). Other offerings such as Healthy Choice Café Steamers (No. 3) and Progresso Light soups (No. 4) marry convenience with a health message.

Two new beverages boast new experiences with few or no calories. The No. 1 product on the list, Gatorade G2, provides all of the electrolytes of regular Gatorade but with only 25 calories. Pepsi Max (No. 8), with ginseng and added caffeine, provides a calorie-free energy boost. 

And despite hardships, consumers are not willing to give up occasional indulgences. No. 2 Dunkin Donuts coffee and No. 7 Smirnoff Ice Flavors malt beverages bring the indulgence of restaurant dining to the home. With distinctive flavors, products such as these allow consumers to enjoy a treat without breaking the budget. Speaking of distinctive flavors, Doritos Collisions (No. 10) offers two different flavors of chips in the same bag.

“In a world of economic uncertainty, consumers seek comfort and stability in small ways,” adds Berlack. “Home dining occasions are proving to be an area of opportunity. Shoppers are staying with trusted brands that provide value and comfort and are diversifying their menus through brand extensions, such as chicken breasts with new flavor offerings or ice cream with new, indulgent mix-ins.”

Back to basics

Looking beyond that top 10 list to other products that made the Pacesetters cut provides more insight into product development trends. This past year, a whopping 13 new cereal introductions vaulted into the ranks of New Product Pacesetters. Several, including General Mills’ Fiber One Raisin Bran Clusters, Post’s Live Active line and Kellogg’s All Bran Strawberry Medley, target the health-conscious at-home breakfast diner, and Kellogg’s Cereal Straws targets younger households with children. 

2008 Pacesetters by Category

In the frozen meals aisle, Bertolli’s Mediterranean Style Multi-Serve line and Stouffer’s Lean Cuisine Flatbread Melts found success.

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