IRI Finds New Products With Taste, Health Bennies Do Well

Buoyed by consumers' interest in health and nutrition, consumer packaged goods marketers maintained a brisk pace of new product introductions last year. There were 1,704 new products launched in 2006--up from 1,361 in 2003, according to IRI's "2006 New Product Pacesetters" report.

Consumers' interest in their waistlines has expanded to focus on overall health and nutrition. To that end, products that let consumers have their cake and eat it with vitamins, too have managed to have a pretty good year. Leading the list is Kraft Inc.'s South Beach brand across multiple categories--with sales of $231 million in food, drug and mass channels excluding Wal-Mart. Product marketing focuses on weight management as much as on nutrition, including whole grains and the so-called good fats.

Also benefiting from the better-for-you/tastes-great trend was Dreyer's/Edy's Slow Churned ice cream with half the fat of regular ice cream, which posted $229 million in sales, and Breyer's Double Churned ice cream, with $135 million.

"Taste and variety remain very powerful drivers of consumer purchases and consumption," says Sunny Garga, president of IRI Business and Consumer Insights.

"The number of new varieties introduced over the past year across both healthier and more indulgent products increased substantially over historical averages, as manufacturers seek growth within mature categories through brand extensions."

In fact, all of the products on IRI's Pacesetters list are line extensions of well-known brands supported by hefty ad spending. According to TNS Media Intelligence, Kraft supported its South Beach line with $33.3 million in ad spending in 2006; Dryer's/Edy's was backed by a $21 million marketing budget, and Breyer's Double Churned received $23.9 million in ad spending.

Other IRI's Pacesetters and their sales amounts include:

Dannon Activia yogurt with probiotics, $128 million

Coke Zero, $121 million

Gatorade Rain, $120 million

Black Cherry Vanilla Coke, $83 million

Sara Lee Soft & Smooth whole grain bread, $81 million

Stouffer's Lean Cuisine Paninis, $78 million

Stouffer's Corner Bistro frozen entree, $77 million

To qualify for the list, brands must have been introduced between February 2005 and December 2006 and achieved at least $7.5 million in first-year sales.

Given that the soft-drink industry has taken a major hit in recent years, some may be surprised to find two Coca-Cola brands on the list of IRI Pacesetters. Their buzz may fizzle soon. "Soft drink companies like Coke have recently adopted the practice of trying to stem the decline of full-flavored soft drinks with limited-edition flavors," says Tom Vierhile, director of Datamonitor's Productscan database.

They put a lot of energy behind things like Black Cherry Vanilla, but the brands don't have staying power. People tend to flirt with different beverage flavors on a regular basis. You can't look at this list and say this is proof positive that these brands will be successful five years from now."

Dannon's Activia yogurt faced particular challenges in that it set out to introduce to the U.S. a new yogurt product while also educating people about probiotics, which help with digestion. The brand received $45.7 million in 2006 ad spending, according to TNS Media Intelligence.

"While most of the Top 10 Pacesetters have big marketing budgets supporting them, other factors are also critical to success, including addressing an emerging consumer need, executing with excellence at retail and effectively positioning the product with advertising and marketing messages," says IRI's Garga.

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