Kinder Joy and M&M’S Caramel have topped the list of IRI’s 2018 food and beverage New Product Pacesetters, the Chicago-based research firm announced Wednesday.
The 23rd annual ranking and accompanying report highlight the most successful new product launches across food and beverage, non-food and convenience store sectors. Smaller companies continue to dominate the list, and the most successful products emphasize wellness and convenience.
Among food companies, indulgence is in, with Kinder Joy and M&M’S Caramel taking the first and second spots with $124.4 million and $120.6 million in sales, respectively. Within the non-food sector, beauty products bested other categories, with 28 products achieving Pacesetter status, while enhanced laundry products held the number one and four positions.
“The majority of 2018 New Product Pacesetters addressed at least one of the overriding themes we’ve observed over the past few years,” says Joan Driggs, v.p. content and thought leadership. “They’re upping the consumer experience, delivering against expectations and addressing simplicity, either with ingredients, convenience or sustainability.”
For the first time, products developed by companies with annual revenues under $1 billion represented the majority of top-ranking brands, accounting for 51 percent of the products listed and representing 27 percent of Pacesetters revenues.
Companies with sales between $1 billion and $5 billion continued to have declining representation, responsible for just 27 percent of products and 19 percent of revenues, as compared to 35 percent and 26 percent five years ago, respectively. Larger companies, those with more than $5 billion in revenues, accounted for just 22 percent of Pacesetters products but 54 percent of Pacesetters sales.
Winning companies are growing dollar sales based on an enhanced understanding of consumer wants and needs, capturing adjacent white space and/or acquiring companies that have a demonstrated strength in a particular niche.
Total 2018 Pacesetters’ first-year sales dollars continued the decline IRI has previously recognized — revenues of winners collectively shrank by $3.4 billion between 2012 and 2018. However, total IRI-measured multi-outlet channels (not including convenience store) sales grew 1.7 percent in 2018, following increases of 1.2 percent in both 2017 and 2016. This reflects improved understanding of consumer behaviors, which results in consumers remaining interested in new products longer.
Sales momentum that in the past would often dissipate after year one now continues into year two and beyond. Among 2017 Top 10 New Product Pacesetters, seven of the top 10 maintained or increased sales in year two.
“Two driving forces are reshaping the CPG landscape and are deeply reflected in this year’s New Product Pacesetters,” said Larry Levin, executive v.p., market and shopper intelligence. “Ecommerce is driving home to consumers the value of convenience, and shoppers now expect convenience in the products themselves, in addition to how they purchase them and have them delivered. Second, artificial intelligence and machine learning are arming manufacturers and retailers with new insights into consumers’ wants and needs, resulting in a new wave of products that capture shoppers’ initial interest and maintain that interest over the longer term.”
2018 New Product Pacesetters: Top 10 Food and Beverage Brands (Total Year-One Dollar Sales, Multi-Outlet)
|Oui by Yoplait||$100.5|
|Grown in Idaho||$59.9|
|Mountain Dew Ice||$59.9|
|Ritz Crisp & Thins||$49.1|
|Duncan Hines Perfect Size for 1||$47.9|
2018 New Product Pacesetters: Top 10 Convenience Store Brands (Total Year-One Dollar Sales, Convenience Store Channel, in millions)
|Red Bull Purple Edition||$52.7|
|Mountain Dew Ice||$45.8|
|Red Bull Lime Edition||$37.6|
|Starbucks Cold Brew||$32.1|
|Pure Leaf Tea House Collection||$31.8|