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The 2015 New Product Pacesetters report, available exclusively from IRI, was compiled based on insights from IRI’s New Product Innovation Practice and 2016 IRI New Product Survey. To download the full report, visit IRI's website
If there's a common thread to at least some of the best-selling new products of 2015 – and this is a bit of a stretch – it's that protein hit full stride that year and continues a run so far in 2016.
From day one, Greek yogurt boasted of more protein; Fairlife Farms' new milk is concentrated to yield more protein; and Cheerios Protein – well, it's right there in the name. Those are four of the top 10 new products announced in late April by IRI in its annual New Product Pacesetters report.
The Greek yogurts on the list are Dannon Oikos Triple Zero and Yoplait's Greek 100 Whips. The No. 1 spot belonged to McDonald's branded coffee (McCafe), which is manufactured by Kraft Heinz. Others on the list were Oscar Mayer Deli Fresh Bold (also Kraft Heinz), Chili's At Home (Bellisio Foods), Simply Juice (Coca-Cola), Breyers Gelato Indulgences (Unilever) and Cobblestone Bread (Flowers Foods).
Market research firm IRI for years has been tracking the new product launches in all consumer packaged goods (CPGs). We're focusing on the food and beverage products here. (If you're curious about the biggest-selling new product in all categories, it was Nexium 24HR, an omeprazole acid reducer, with first-year sales of nearly $271 million.)
To be considered for Pacesetters, the product must complete a full year of sales in calendar year 2015. IRI starts tracking year-one sales after a product reaches 30 percent of national distribution across multi-outlet geography. This means grocery, drug, mass, dollar stores, club and convenience store channels.
Thousands of new brands hit retail shelves during 2015, with 54 percent of all new product launches hailing from the food and beverage aisles, according to IRI. The 200 top-selling new brands captured cumulative year-one sales of more than $6.5 billion across IRI’s multi-outlet geography.
For the top 100 food and beverage champions, median year-one dollar sales were $19.6 million, down from $22.9 million in 2014. These top-performing products provide much-needed indulgence and offer an experience that brings excitement into the kitchen, according to IRI's analysis.
Exciting and high-end attributes are found in the top-ranking products and are in line with what consumers are saying they want from new food products. According to IRI’s 2016 New Product Survey, 29 percent of consumers want to indulge without paying restaurant prices; 24 percent want to add excitement to their daily diet; and 21 percent seek options that are truly new and different.
Consumers want flavor excitement to spice up their daily diets, as well as healthier-for-you solutions. For instance, Fairlife milk uses a new, patented filtration process that concentrates some of milk’s natural nutrients, while filtering out lactose and reducing sugars. And loads of flavor is found in crossover brands from restaurants and other realms, such as Chili’s At Home frozen dinners and McCafé coffee.
In the C-store
In the convenience store arena, median year-one sales across the top 10 New Product Pacesetters were $18.6 million – "astounding," IRI put it, "demonstrating the power behind consumers’ ongoing quests for uniquely indulgent experiences."
The first- and third-place C-store items were electronic cigarettes – No. 1 Vuse brought in a remarkable $221 million in a single year. But all others in the top 10 were food and beverage items. Monster is a perennial C-store contender, with 2015's Ultra Sunrise coming in second and Unleaded placing eighth. The Redd's brand placed No. 9 on last year's grocery store list and No. 8 on the C-store list with its first-generation Apple Ale (in bottles). In 2015, the Redd's Wicked Ales variant (in cans) came in fourth on the C-store list. Wrigley chewing gums came in seventh and ninth.
Notable for their absence: Usually Coca-Cola and/or Pepsi place a carbonated soft drink on the C-store list, but that was not the case in 2015 (although Coke does own 16.7 percent of Monster and PepsiCo's Ruffles Deep Ridged made the cut). Last year, Mountain Dew Kickstart placed fifth, and the year before Pepsi Next came in eighth. Also ending multi-year runs on the C-store top 10 list were Red Bull and Budweiser.
“The key to launching a successful new product today is not only understanding your core and target shoppers but also how these shoppers view the CPG marketplace,” says Susan Viamari, vice president of thought leadership at IRI. “Their viewpoint is very different from manufacturers and retailers. Consumers think about satisfying needs in terms of eating occasions, drinking occasions and product usage occasions. CPGs need to recognize which CPG categories compete for each occasion. It varies by mind-set, daypart, channel and shopper, so the days of one-size-fits-all strategies are gone forever.”
“The good news is that technology and analytic know-how play a huge role in creating an understanding about market trends and consumers’ needs and wants, and how those factors impact the way consumers make purchase decisions,” added Larry Levin, executive vice president for business development. “CPG marketers must harness that knowledge to understand sources of volume and incrementality for each of their brands across usage occasions — in other words, know where your sales are coming from. Ultimately, marketers are looking to get the full pool of potential consumers to buy more, rather than just shifting dollars from one brand within the portfolio to another.”
“To be successful, marketers must have a clear, comprehensive and consistent understanding of their competitive set, despite rapidly changing market conditions and fickle consumer attitudes and behaviors,” concludes Viamari. “These insights will help CPGs address white space innovation opportunities that meet the needs of high-potential consumer segments. This knowledge will also support development of highly accurate sales forecasting and brand development programs that will minimize launch failure and maximize market potential.”