According to Mintel’s Global New Products Database, the number of new product launches in the United States food and drink categories dropped 51% in the first quarter of 2009 compared with the first quarter of 2008. While manufacturers typically release fewer new products during the first quarter of a year, this year’s reduction is higher than recent years, Mintel reports.
“Faced with low consumer confidence and reduced spending, many food and beverage manufacturers cut back on product development and new product launches,” says Lynn Dornblaser, leading new product expert at Mintel. “Many companies face internal budget cuts that affect everything from new product ideation to development and marketing.”
Compared with the first quarter of 2008, Mintel noticed higher-than-average declines in non-alcoholic beverages, chocolate, sugar and gum confectionery and dairy product launches (56%, 55%, 64% and 60% respectively). However, Mintel points out that confectionery launches may show a higher-than-average decrease due to Easter falling into the second quarter of 2009.
Although food and drink introductions declined steadily from October 2008 to February 2009, they increased in March, Dornblaser says.
“Consumer confidence has leveled off for the time being, which marks an opportunity for manufacturers,” she adds. “Now is the time for ideation and innovation for products that answer shoppers’ desires for value, quality and pleasure.”
Mintel has tracked new product launches through three major recessions, Dornblaser says. As a result, the company has observed that while new product launches decline in the beginning of a recession, they quickly increase once the economy begins to recover.