IRI, Chicago, released its “2018 New Product Pacesetters,” which highlights the most successful new product launches across food and beverage and convenience store sectors, among others. Smaller companies continue to dominate the list, and the most successful products emphasize wellness and convenience.
“The majority of 2018 New Product Pacesetters addressed at least one of the overriding themes we’ve observed over the past few years,” says Joan Driggs, vice president, content and thought leadership. “They’re upping the consumer experience, delivering against expectations and addressing simplicity, either with ingredients, convenience or sustainability.”
Products from smaller companies top 50% for the first time
For the first time, products developed by companies with annual revenues under $1 billion represented the majority of top-ranking brands, accounting for 51% of the products listed and representing 27% of Pacesetters revenues. Companies with sales between $1-5 billion continued to have declining representation, responsible for just 27% of products and 19% of revenues, as compared to 35% and 26%, respectively, five years ago. Larger companies, those with more than $5 billion in revenues, accounted for just 22% of Pacesetters products, but 54% of Pacesetters sales.
Winning companies are growing dollar sales based on an enhanced understanding of consumer wants and needs, capturing adjacent white space and/or acquiring companies that have a demonstrated strength in a particular niche.
Total 2018 Pacesetters’ first-year sales dollars continued the decline IRI previously recognized, with revenues of winners collectively shrinking by $3.4 billion between 2012-2018. However, total IRI-measured multi-outlet channels (not including convenience store) sales grew 1.7% in 2018, following increases of 1.2% in both 2017 and 2016. This reflects improved understanding of consumer behaviors, which results in consumers remaining interested in new products longer. Sales momentum that in the past would often dissipate after year one now continues into Year 2 and beyond. Among 2017 top 10 New Product Pacesetters, seven of the Top 10 maintained or increased sales in Year 2.
“Two driving forces are reshaping the CPG landscape and are deeply reflected in this year’s New Product Pacesetters,” says Larry Levin, executive vice president, market and shopper intelligence. “E-commerce is driving home to consumers the value of convenience, and shoppers now expect convenience in the products themselves, in addition to how they purchase them and have them delivered. Second, artificial intelligence (AI) and machine learning (ML) are arming manufacturers and retailers with new insights into consumers’ wants and needs, resulting in a new wave of products that capture shoppers’ initial interest and maintain that interest over the longer term.”
Food and beverage leaders concentrate on indulgence
For consumers with a sweet tooth, 2018 was their year. In fact, five of the Top 10 Food and Beverage Pacesetters featured sweet or savory indulgence as well as health and wellness.
