More new products were added to supermarket shelves than almost ever before, but many are cannibalizing sales of old product lines rather than expanding the market.
In 2007, 6,472 food, beverage and personal care packaged products debuted, up from 3,825 in 2006 and 3,408 in 2005, according to Mintel global new products database. That computes to almost 70 percent more new products over the past year. But sales have risen just 4.7 percent over the same period.
Chris Meredith, Leading Edge consultancy, who has advised multinational conglomerates in the food, mobile phone and banking sectors, says new product lines are just helping companies keep up with rivals, and that few products were innovative enough to leapfrog rivals with rates of sales growth above the market average, reports the Sydney Morning Herald.
Simply releasing new fragrances, flavors and packaging formats was not enough to urge shoppers to fill their carts more than before. Companies across a wide variety of products merely jumped on the environmentally friendly and healthy-living bandwagons in the past year, but neglected to create innovative products that shoppers actually wanted to buy, he adds.
"In the food market they are taking everything they can think of out of products," he says. "Fats are coming out, additives are going out and vitamins are going in but it is not generating market growth."
Meredith says successful new products need to both fill a gap in the market and react to consumer needs by going out on a limb with a new service.
