The Drivers Behind 2011's Most Successful Launches
Last year’s most successful food/beverage and non-foods product launches were led by P.F. Chang’s Home Menu line ($101.6 million in year-one sales) and Pampers Cruisers/Swaddlers with Dry Max ($296 million in year-one sales), according to SymphonyIRI Group’s 2011 New Products Pacesetters report.
Other top-10 food/beverage launches (in $ millions) included Thomas’ Bagel Thins ($73.6); Oscar Mayer Selects ($69.2); Folgers Gourmet Selections K-Cups ($58.4); M&M’s Pretzel ($58.4); Sun Drop carbonated beverages ($55.8); Kellogg’s Special K Cracker Chips ($50.6); Lean Cuisine Market Creations ($48.6); Gold Peak Chilled Tea ($44.3); and Bailey’s Coffee Creamer ($44.2).
Other top-10 non-foods launches (in $ millions) included Gillette Fusion ProGlide ($169.4); U by Kotex ($74.6); Schick Hydro ($64.9); Maybelline Volum’ Express Falsies eye cosmetics ($46.5); Nicorette Lozenge ($45.2); Sally Hansen Salon Effects ($41.8); Tide Plus Febreze Freshness ($37.9); Ensure with Revigor ($37.5); and Maybelline Fit Me facial cosmetics ($36.2).
The overall number of launches (not just the high-performing Pacesetters) was down 3% in 2011 versus 2010 (and down 13% versus 2008). That was due to non-foods launches, which declined to 896 versus 957 in 2010. Food/beverage launches rose a bit, to 665 versus 2010’s 647. Launch numbers have been slowly recovering since the onset of the recession (they dropped by 10% between 2008 and 2009), Susan Viamari, editor, Times & Trends for SymphonyIRI, tells Marketing Daily.
Although new brands historically outperform brand extensions in first-year sales, 92% of food/beverage and 91% of non-foods launches last year were brand extensions. New food/beverage products yielded average sales of $35.4 million last year, versus $21.6 million for brand extensions. However, non-foods extensions outperformed new brands in 2011, with average sales of $22.9 million to new brands’ $14 million.
The vast majority of new products fail to garner more than $7.5 million in year one (the minimum to make the Pacesetters lists). Last year, 77% of new food/beverage and 84% of new non-foods products yielded less than $7.5 million. At the other extreme, only 2% of food/beverages and 0.2% of non-foods products achieved sales of $50 million to $100 million in 2011, and just three launches over both categories reached more than $100 million. Over the past 10 years, fewer than 2% of all launches have reached $100 million-plus.
“One lesson for manufacturers is, be realistic about your goals,” says Viamari.
But Viamari also stresses that the trend to lower overall first-year sales levels reflects the new core driver of success for both food/beverage and non-foods launches: heightened targeting.
While the top-10 lists are dominated by major CPGs, small as well as large companies are launching winners by listening to and anticipating evolving consumer needs and preferences, and focusing on highly targeted products.
“Big or little, CPG manufacturers with a laser-like focus on true marketplace needs, at an increasingly granular level, will be the ones to enjoy new product success in the years to come,” says Viamari, adding that social media has also helped level the playing field.
In the food/beverage arena, recent targeted winners from smaller companies have included Udi’s line of gluten-free foods across meal occasions (2011) and Chobani, the Greek yogurt that was 2010’s top-selling food launch.
2011’s food/beverage launch hits also very much reflected consumer demand for convenient, yet out-of-the-ordinary products.
With 55% of consumers eating out less frequently now than when the recession began (per SymphonyIRI’s Q1 2012 MarketPulse survey), it’s not surprising that 23% of last year’s food/beverage Pacesetters were complete dinner solutions (up from an average 18% over the 2002-2011 period). It also makes sense that that a substantial 12% of those were products that offered restaurant-quality ingredients/recipes and novel textures and flavor combinations -- products that lend variety and “pizzazz” to at-home meals.
Indeed, the top benefit of 84% of food/beverage Pacesetters was variety in flavors/recipes, followed by new/unique recipes (64%), distinctive/new flavors (62%) and convenience/ready-to-serve (37%).
Other categories showing high rates of innovation included candy and gum (accounting for 19% of all food Pacesetter dollars, through products addressing snacking trends including satiation, healthy eating, indulgence and on-the-go consumption); and meal makers/light meals/appetizers (18% of Pacesetter food dollars).
Within beverages, coffee and teas saw an innovation surge driven by brands’ single-serve offerings, particularly for Keurig machines. Nine coffee and tea innovations achieved Pacesetter status (representing 49% of total Pacesetter beverage dollars), versus an average of four per year between 2002 and 2011 (averaging 10% of total Pacesetter beverage dollars).
Carbonated, sports and energy drinks were 2011’s second-most active beverages launch category (accounting for 23% of Pacesetter beverage dollars), but that was significantly down from an average of 45% for 2002 through 2011.
Natural/organic was the dominant health/wellness benefit (23% of food/beverage Pacesetters made this claim, versus 19% in 2010). Reduced-calorie was second, at 20%, down from 23% in 2010. High fiber/whole grain is on the rise (23%, versus 20% in 2010). Added vitamins/nutrition declined from 25% of Pacesetters in 2010 to 19% last year. Lower fat/fat-free claims were unchanged (15% of Pacesetters made them in both 2010 and 2011).
On a projected basis, top “rising star” food/beverage brands include Dannon Oikos, Dr Pepper TEN, Healthy Choice Top Chef Café Steamers, Kraft MiO, Magnum Fz Novelties, Nabisco Newtons Fruit Thins, Skinny Cow Chocolate Candy, Sparkling ICE bottled water, Starbucks K-Cups and TruMoo milk.
In the non-foods sector, tech advancements and product performance drove new-product success, reflecting consumers’ desire to save money (but realize professional-quality results) through DYI activities, says Viamari.
Seventy-six percent of non-foods Pacesetters offered a “new technology” benefit, and 75% offered an “expanded/improved effectiveness” benefit (tied with “variety,” also at 75%).
As examples of tech benefits, Viamari cites the Gillette Fusion ProGlide (positioned as achieving close shaves with greater comfort through its thinner, coated blade and accompanying moisturizing/lubricating cream); Pampers Cruisers/Swaddlers with Dry Max (20% thinner but two times more absorbent); and cosmetic foundations that make it easy to pick the right shade for one’s skin tone.
Within health/wellness benefits, “enhanced moisturizing” led (21% of non-foods Pacesetters made this claim). “Added nutrients” and “more natural/organic” followed, accounting for 16% each of non-foods Pacesetter launches’ dominant claims.
Personal/hygiene-care launches accounted for 29% of non-foods Pacesetter launches dollars in 2011 (down 1% versus 2010). Beauty-care launches grew significantly (40 launches representing 24% of non-foods Pacesetter dollars, versus 20% in 2010), reflecting manufacturers’ response to the demand for professional-results at-home beauty treatments.
“Other” products’ share of Pacesetter non-foods dollars jumped to 21% (from 17% in 2010). Those products included a 15% share for baby-care products, and 4% and 3% shares for paper/plastics/foils and air fresheners/candles, respectively.
Home-care detergents and cleaners’ share of Pacesetter non-foods dollars declined to 7%, from 11% in 2010. The big winners not only made cleaning easier, but had “tie-breaker plusses” like fragrances, extended effectiveness and “green” benefits claims, according to the report.
Healthcare products’ share of non-foods Pacesetter dollars also declined a bit (to 14%, from 16% in 2010). Enhanced benefits and patentable advances drove success.
Pet care products’ share of non-foods Pacesetters dollars declined slightly (to 6%, from 5% in 2010). In this category, benefits relating to enhancing the quality of life and longevity of pets drove success.
Projected “rising stars” among non-foods Pacesetters include Allegra, Clairol Nice ‘N Easy Color Blend Foam, Colgate Optic White, Downy Unstopables, Huggies Little Movers Slip-Ons, John Frieda Precision Foam Color, Kibbles ‘n Bits Bistro Meals, Milo’s Kitchen dog food, Olay Body Collections, and Sally Hansen Crackle Overcoat.