New Product Update: Part 1 - Innovation in Food & Beverage

The recession has undoubtedly had a profound effect on consumer purchasing attitudes and, consequently, new product development, but the essential principles remain intact. New products continue to breathe new life into core brands, and they bring fresh news into the CPG environment.

Bringing new products to market is not an easy task, even in the best of times. Amazingly, some products have been able to beat the odds in the last couple of years and make a splash.

SymphonyIRI recognizes the most remarkable of these as its New Product Pacesetters. Only about one-quarter of products released, according to the firm, achieve the minimum $7.5 million required to achieve Pacesetter status. And a mere 3 percent of new products achieve "blockbuster" status, year-one sales of more than $50 million.

Innovation has suffered to some extent, particularly in the food & beverage sector. Earlier in the decade, according to SymphonyIRI data, new product introductions in the sector numbered in the 900-range. In 2009 and 2010 those numbers dropped to 659 and 647 respectively. Meanwhile, in non-foods, launches surprisingly kept pace, and even grew to over 950 new products in 2010.

A great deal of food and beverage innovation has been centered on bringing healthier solutions to the marketplace. According to SymphonyIRI's 2011 Consumer Snacking Study, 71 percent of consumers are trying to eat healthier these days. In a prolonged economic downturn, this has seemingly translated into a consumer money saving strategy, i.e. eating healthier to avoid medical costs.

When viewing new products from the perspective of the benefits they offer consumers, variety was prevalent in food and beverage innovation in 2010. Last year, three-quarters of successful food and beverage launches expanded available variety. Some examples:

Stouffer's Easy Express Skillets: This line offers a "wide range of delicious, wholesome meals that let you feed your family in 20 minutes or less."

Doritos Late Night tortilla chips: Promises "great taste, great crunch and good fun™" rolled into one.

Special K Fruit Crisps: Offers the opportunity to satisfy a sweet tooth without completely derailing healthier eating efforts.

Pepsi Throwback and Mountain Dew Throwback: Made with real sugar, using iconic packaging that captures the spirit of the 1970s and 1980s.

YoCrunch 100 Calorie Cup: Exemplifies the innovation trend around texture, which also picked up in 2010. For the year, nearly one-quarter of new food innovation brought different textures to the marketplace, ranging from thick and creamy to crispy and crunchy.

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