CPG product innovation and the pace of change
New product innovation in CPG is tough. Meeting consumers’ growing expectations is even tougher. Add this to a constantly-changing marketplace in which larger companies are still losing share to smaller ones, the need to move faster and with more precision is increasingly imperative for CPG brands. Innovation, when done right, can not only help brands more effectively compete, it positively impacts the bottom line, and creates new value and new customers.
The 23rd annual IRI New Product Pacesetters report provides insights into the top new product launches for 2018 and the marketing stories behind them. These innovative products show that CPG companies are tapping into top trends of convenience, value and small rewards across food and beverage, non-food, and convenience store sectors, and savvy marketers are focusing efforts on the consumer segments that these new products are most likely to resonate with.
- Four of 2018’s IRI New Product Pacesetters had sales of more than $100 million.
- Companies with annual sales of less than $1 billion account for 51% of 2018 New Product Pacesetters, the largest share ever.
- The beauty and personal care category had the most Pacesetters: 28 new products met the Pacesetter criteria.
- Three key trends among the 2018 New Product Pacesetters are experiential, expectation and simplicity.
While the products in this report are new, the overarching themes they address have been bubbling for years: The focus of 2018 product innovation was on delivering against consumer experience and expectations, with simplicity of ingredients and convenience. The upside of these strategic launches is the momentum many brands maintain into year two and beyond. Seven of the top 10 New Product Pacesetters in 2017 were able to grow or maintain sales in year two.
The difference in total Pacesetters sales dollars from 2012 to 2018 declined by nearly $3.4 billion, but it’s not detracting from overall CPG industry sales. Total IRI-measured multi-outlet channels (outside of c-store) sales growth was up 1.7 percent in 2018, beyond the increase of 1.2 percent in both 2017 and 2016.
The food and beverage multi-outlet products were dominated by indulgence, with Ferrero’s Kinder Joy and Mars’ M&M's Caramel coming in at Nos. 1 and 2, respectively.
Among the non-food multi-outlet Pacesetters, beauty care products, which include hair, cosmetics and fragrances, continued to outpace other categories in the total number of Pacesetter products. This category introduced 28 winning products in 2018, but below the 40 beauty products that made Pacesetter status in 2017.
In the convenience channel, hydration was the name of the game, with beverages accounting for eight of the top 10 products.
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