IRI: Consumers rewarding ‘new’ products over line extensions
IRI on Monday named last year’s most successful consumer packaged goods launches in with the release of its 2017 New Product Pacesetters report. Thousands of new brands hit retail shelves during 2017, with 49% of the top-ranking brands hailing from small manufacturers — defined as those earning less than $1 billion annually — and accounting for 26% 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,” Susan Viamari, vice president of thought leadership for IRI, said. “Just five years ago, an estimated nine out of every 10 Pacesetters launched were extensions of existing brand lines. In 2017, 40% of food and beverage and 25% 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,” Larry Levin, executive vice president of consumer and shopper marketing for IRI, said. “In a testament to the power of this shift, 20% 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.”
For the top 100 food and beverage champions, median year-one sales were $14.5 million, excluding outlier Halo Top, which earned year-one sales of $342.2 million. All of the top 10 New Product Pacesetter brands were new market entrants, though many of them — including Dunkin’ Donuts Iced Coffee, Nestlé Splash and Hershey’s Cookie Layer Crunch — benefited from the equity their manufacturers already enjoy in the marketplace, IRI researchers noted.
Of the 20 largest 2017 Pacesetter brands, 85% 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.
Candy and gum accounted for 9% of food Pacesetter dollars, which is in line with trends seen during the past five years, IRI noted. 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 nutritious and delicious 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).
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 between $40 million and $59 million. Brands in this range are primarily higher-ticket general merchandise items, such as cookware and hair-styling tools.
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 the clothes. Cosmetic and hair care products also demonstrated 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% aloe juice and coconut water.
“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.”
Abbott feeds adult protein need through Ensure Max Protein
Abbott on Tuesday introduced Ensure Max Protein, a 150-calorie nutrition drink with 30 grams of protein and 1 gram of sugar in an effort to meet the protein need of most adults. More than 1-in-3 adults over the age of 50 aren’t getting the protein they need daily, according to the latest National Health and Nutrition Examination Survey data from researchers at Abbott and the Ohio State University.
To help promote the brand Abbott signed “Grey’s Anatomy” actress Kate Walsh. “As we age, our bodies change and so do our nutritional needs. In the last several years, I have made it a priority to understand exactly what my body needs to function at its best,” Walsh said. “Even with my busy lifestyle, I’ve improved my eating habits by finding simple ways to incorporate protein into my diet so I have energy to take on the day. I love that I can now have Ensure Max Protein on the go, and be confident that my body is getting the right amount of protein it needs.”
Abbott’s Ensure Max Protein comes in two flavors, including milk chocolate and café mocha. The café mocha flavor includes 100 milligrams of caffeine from Colombian coffee extract, which is as much as one cup of coffee.
“Abbott has always been about nourishing adults and helping them live stronger, healthier lives powered by the latest advances in science,” Abby Sauer, a registered dietitian at Abbott, said. “For Ensure, helping adults reach their health goals comes in all forms – whether managing an illness or maintaining strength and energy. Our newest formulation – Ensure Max Protein – delivers strength in a bottle, so adults can stay active and tackle life’s demands.”
Starting this month, Ensure Max Protein will be available nationwide at most major retailers and online.
CHPA debuts marketing conference
What keeps marketers up at night? Officials at the Consumer Healthcare Products Association believe that there is so much information out there that the industry needed a marketing conference to sift through the information and, yes, help marketers sleep a bit better at night.
The two-day 2018 CHPA Marketing Conference, set for July 16 and 17 in Philadelphia, is one that organizers said will be filled with education and networking opportunities for OTC marketers looking to figure out how best to activate their target audiences across today’s fractured media landscape. Organizers said that the summer event would give attendees enough time to incorporate new learnings into the coming year’s media plans.
Companies are facing a constantly shifting retail landscape that’s drawing fewer and fewer trips each year from a divergent consumer base with an age range from Gen Z to baby boomers.
“We can help address these issues by continuously educating ourselves and ensuring we utilize all of the resources available to us,” said Jennifer Moyer, vice president of marketing and sales at Clarion Brands and one of the event’s organizers. “People today — of all ages — are engaged in their health and wellness as never before. From wearables and apps to understanding ingredients, people want knowledge, transparency and meaningful information on how to live a better and healthier life.”
Helping consumers, especially younger consumers, identify products that solve their immediate needs is a white-space opportunity for health and wellness, according to John Dowers, president of Wellspring Pharmaceutical. “The key to marketing to millennials is to present content that is ‘authentic’ with elements that are close to them,” he said. “My experience with Gen Zeros is that you need to deliver your message in 8-to-10 seconds in multiple places, and make sure they know what’s in it for them.”
Learning how to activate consumers is only part of the educational offerings that organizers said will be in play at the event. “The July conference will help marketers develop a playbook for the modern day,” said Ben Fishman, director of brand marketing at Emerson Group. “Attendees will take away from this conference the trends and challenges that impact our business, and ideas about how to capitalize on those trends or solve those challenges.”