Consumers are still hungry for new products, despite a challenging economic environment. Making new products stand out from more than 40,000 items in the supermarket and many more items in larger-format stores is no walk in the park. But stealth marketers are winning this and other challenges, according to the annual New Product Pacesetters report from Chicago-based IRI.
Announced April 21 during the IRI Summit conference in Austin, Tex., the New Product Pacesetters uncover the latest, most innovative ways to build growth in the consumer packaged goods industry (CPG).
On average, 2014's Pacesetters earned $34.8 million. Yet Kraft Foods’ Lunchables Uploaded meal kit took the highest ranking in IRI's Pacesetters report, as the best performing new product, based on year-one sales, with $143.2 million.
Though meal kits are popular, yogurt may actually be the big news this year. Chobani, which entered the Greek yogurt segment a few years ago with its flagship Chobani brand, cranked up its share of sales with two 2014 Pacesetter brands: Chobani Flip and Chobani Simply 100. These new brands earned Chobani an extra 1.3 yogurt dollar share points worth more than $184 million, said the IRI report.
In addition to issuing its Pacesetters, IRI also announced its Rising Stars for 2014/2015, which are new products currently performing well within the year-one launch timeframe.
In the 2014 Pacesetters report, IRI observed that 17 percent of consumers are new-product enthusiasts, and they still like to indulge at home and avoid paying restaurant prices. Growth increased moderately for U.S. CPGs in 2014. There are many new product developments, yet marketers who fail to lead the way or don't create something quickly enough will be pushed right off the store shelf, said Susan Viamari, report author and IRI's editor of thought leadership. "Those that succeed create a sales and revenue splash, start a buzz, garner market share and drive outsized growth," she notes.
Thousands of new brands hit store shelves annually, yet only 200 achieve best-of-the-best IRI Pacesetter status. Products must gain attention by satisfying crucial needs and wants, Viamari says. "They must bring value in a concise, clear format that breaks through the clutter and attracts target shoppers." Gaining a better understanding and applying these insights to current and emerging shopper trends, such as the move to healthier eating, can translate to enormous revenue and market share gain opportunities.
This year, more new brands have been launched in the food category than in the beverage sector, which Viamari believes is driven by the continual changes in consumer palates and food pangs. Also in 2014, 53 percent of new brand entries came from the food and beverage aisles of the store (IRI also tracks non-food CPGs). On average, new food brands brought more sizable year-one sales in 2014 (year one means the product must complete a full year of sales in the 2014 calendar year, for example). And 15 percent of Pacesetting brands were new brand rollouts.
Nearly four out of 10 top-selling product launches in 2014 were more powerful, more delicious and more rewarding in some way. That's not exactly new, however, Viamari points out, but it keeps picking up steam. "Consumers have come to expect great things from packaged goods, and CPG marketers are delivering in spades," she says.
Greek yogurt is still a favorite breakfast or snack, and it found its way into the Top 10 Food & Beverage Pacesetters list four times this year. There are a few brands in this sector pushing the envelope – in addition to Chobani's two, Dannon's Activia Greek and General Mills' Yoplait Greek Blended also made the list.
Beverages need to be truly new and different. Alcoholic beverages are extending beyond the norm with more targeted spins. In the beer category, for example, the apple-crisp Redd's Apple Ale from MillerCoors is brewed like an ale, but has the tart bite of an apple. It was the largest of the launches, capitalizing on the search for trendy alternatives to conventional beer. Anheuser-Busch had a Top 10 launch for the third year in a row, with its Bud Light Lime line extension Straw-Ber-Rita, which the report says aims to broaden its market reach. MillerCoors in fact ranked three Pacesetter launches for the year. Redd's Apple Ale made the Top 10 list, and its companion Strawberry Ale also made the 100 products IRI identifies as the larger Pacesetters list. Third Shift, another MillerCoors product, came in at No. 82.