Small Companies Now Account for One-Quarter of New Product Pacesetter Dollar Sales; Innovation Trends Heavily Influenced by Millennials
CHICAGO —Garnier Whole Blends, Biofreeze, and Herbal Essences Bio:Renew led last year’s most succesful nonfoods launches, IRI reported today. The three H&BA brands had first-year sales of $122 million, $78 million and $75 million, respectively.
IRI’s 2017 New Product Pacesetters report also listed the top-selling foods and beverages, and convenience store products. Halo Top ($324.3 million), Good THiNS ($87.0 million), and Dunkin’ Donuts Iced Coffee ($67.1 million) topped the consumables. In the c-store arena, Red Bull Green Edition took home $110.7 million, followed by LIFEWTR ($107.6 million) and Monster Mutant Super Soda ($42.3 million).
Thousands of new brands hit retail shelves during 2017, with 49 percent of the top-ranking brands hailing from small manufacturers — defined as those earning less than $1 billion annually — and accounting for 26 percent of Pacesetter dollars. Overall, the top-selling 200 new brands captured cumulative year-one sales of more than $4.6 billion across IRI’s multi-outlet geography.
“Consumers are demanding products that are customized to their needs, and this type of targeted innovation continues to put small and niche companies on the New Product Pacesetter map,” said Susan Viamari, vice president of thought leadership for IRI. “Just five years ago, an estimated nine out of every 10 Pacesetters launched were extensions of existing brand lines. In 2017, 40 percent of food and beverage and 25 percent of non-food Pacesetters were brands entirely new to the CPG marketplace. This clearly demonstrates consumers’ willingness to try ‘unknown’ brands. Millennials, in particular, are more moved by experiences and solutions to their needs and less likely to purchase based solely on brand name.”
“Smaller, more targeted product launches have become the new norm in CPG aisles, as manufacturers look to enhance impact with launches that align more closely with key consumer needs and wants,” added Larry Levin, executive vice president of consumer and shopper marketing for IRI. “In a testament to the power of this shift, 20 percent of this year’s top-selling launches earned less than $10 million during their first year on the shelves, continuing a trend we found in last year’s analysis.”
Food and Beverage Launches Capture $14.5 Million in Median Year-One Sales
For the top 100 food and beverage champions, median year-one sales were $14.5 million, excluding outlier Halo Top. All of the top 10 New Product Pacesetter brands were new market entrants, though many of these — including Dunkin’ Donuts Iced Coffee, Nestlé Splash and Hershey’s Cookie Layer Crunch — benefited from the equity their manufacturers already enjoy in the marketplace.
It’s no surprise that millennials are eager adopters of new CPG products. This group, after all, is continuously on the lookout for new, exciting and unique experiences. This quest for newness is pushing innovation into new territory.
While frugal, millennials will spend on things that matter to them. Of the 20 largest 2017 Pacesetter brands, 85 percent command a price premium compared to their respective category averages. PepsiCo’s LIFEWTR, for instance, sells at a significant premium compared to other convenience/still waters. The brand hit strong in the market as a purified water, pH-balanced with electrolytes added for taste.
Millennials are also embracing wellness and self-care to ward off ailments. Campbell’s Well Yes! soup easily meets this demand because it features clean, simple and nutritious ingredients to make healthy eating quick and easy.
|2017 New Product Pacesetters: Top 10 Food and Beverage Brands
|1. Halo Top||$324.2|
|2. GOOD THiNS||$87.0|
|3. Dunkin’ Donuts Iced Coffee||$67.1|
|4. Nestlé® Splash||$55.2|
|6. SMARTMADE by Smart Ones||$49.3|
|7. HERSHEY’S Cookie Layer Crunch||$47.7|
|8. Hillshire Snacking||$47.5|
|9. Well Yes!||$47.3|
|10. Cracker Barrel Macaroni & Cheese||$46.6|
Source: IRI Market Advantage
Of course, no matter how health conscious consumers become, there will always be room for treats and sweets. Overall, candy and gum accounted for 9 percent of food Pacesetter dollars, which is in line with trends seen during the past five years. The largest launch in this area was Hershey’s Cookie Layer Crunch, a line of milk chocolate bars with a shortbread crunch and creamy fillings. Healthier-for-you indulgences are becoming more prevalent, though. For instance, Weight Watchers ice cream treats are deliciously decadent treats at only 4 SmartPoints value or less.
In the dinner sector, the largest launch was SmartMade by Smart Ones, a frozen meal inspired by the quality ingredients and smart cooking techniques used in the home. Eighteen of the 76 food Pacesetters are breakfast solutions, which cater to consumers at both ends of the wellness spectrum by offering both indulgent flavor experiences, such as Kellogg’s Cinnamon Frosted Flakes (ranked 19th) and healthier, on-the-go options, like Jimmy Dean Delights Frittatas (ranked 23rd).
Non-Food Champions Secure $17.8 Million in Median Year-One Sales
On the non-food side, median year-one sales inched up just slightly, to $17.8 million from $17.6 million, bolstered by the slight uptick in the number of brands earning $40-$59 million. Brands in this range are primarily higher-ticket general merchandise items, such as cookware and hair-styling tools.
|2017 New Product Pacesetters: Top 10 Non-Food Brands
(Total Year-One Dollar Sales, Multi-Outlet)
|1. Garnier Whole Blends||$121.8|
|3. Herbal Essences Bio:Renew||$74.7|
|4. Red Copper||$53.1|
|5. Tide Simply Plus Oxi||$52.1|
|6. Select by Calphalon||$44.4|
|7. Simply Straight||$44.4|
|8. Copper Chef||$42.7|
|9. Maui Moisture||$40.2|
|10. all POWERCORE Pacs||$36.8|
Source: IRI Market Advantage
Co-branded solutions are bringing the benefits and experiences together in one convenient solution. Tide Simply Plus Oxi, for instance, fights stains and odors with twice the Oxi fighting power. There’s no need to pretreat, plus clothes are infused with a fresh, clean scent. Cosmetic and hair care products are also demonstrating the power of fusing benefits to enhance the value proposition. Maui Moisture, for example, is a hair care line that heals and hydrates. The line is gluten-, paraben-, and silicone-free, starting with 100 percent aloe juice and coconut water.
Top Launches Capture Median $31.7 Million in First-Year Sales in Convenience Stores
In the convenience store arena, median year-one sales across the top 10 IRI New Product Pacesetters were $31.7 million, demonstrating the power behind consumers’ ongoing quests for indulgent, on-the-go experiences.
|2017 New Product Pacesetters: Top 10 Convenience Store Brands
(Total Year-One Dollar Sales, Convenience Store Channel)
|1. Red Bull Green Edition||$110.7|
|3. Monster Mutant Super Soda||$42.3|
|4. HERSHEY’S Cookie Layer Crunch||$41.0|
|5. MTN DEW PITCH BLACK||$38.6|
|6. Four Loko Gold||$34.7|
|7. MTN DEW BLACK LABEL||$32.8|
|8. Sprite Tropical Mix||$32.5|
|9. KIT KAT BIG KAT||$30.9|
|10. Pepsi Cherry Vanilla||$23.4|
Source: IRI Market Advantage
Interestingly, most of top 10 products in this channel in 2017 were beverages. And as seen among food and beverage and non-food Pacesetters, categories are starting to blend and blur more. For instance, Monster, which is known as an energy drink brand, launched Monster Mutant Super Soda, a carbonated soft drink. And carbonated beverage Mountain Dew Black Label developed packaging that looks very similar to energy drink cans. All of the top 10 convenience-channel Pacesetters are pure indulgence products (except for bottled water), which reflects consumers’ ongoing desire for healthier-for-you indulgences.
“Innovating to meet core needs and wants is crucial to ensuring new product success, but the challenge doesn’t end there. For a new product to be truly successful, it is up to marketers to ensure that the product — and messaging — are where the shopper is, when the shopper is ready to buy,” said Viamari. “Through big data and advanced analytics, CPG marketers do have visibility into where shoppers go to learn about new products, as well as into what the highest-potential retail banners are, and even where the highest potential locations exist within each of these banners. By understanding key shoppers — what they want, where they go to learn about products and where they go to try new brands — marketers can influence purchase decisions with messaging and assortment that drive sales.”