New Product Pacesetters Reveal Changed Market
IRI is out with its annual New Product Pacesetters report offering a look at what it takes for new products to break into the market and sustain growth. At a high level, smaller companies continue to dominate the list, and the most successful products emphasize wellness and convenience. Among food companies, indulgence is in, taking the top two spots. Within the non-food sector, beauty products bested other categories, with 28 products achieving Pacesetter status.
“The majority of 2018 New Product Pacesetters addressed at least one of the overriding themes we’ve observed over the past few years,” said Joan Driggs, IRI’s VP of Content and Thought Leadership. “They’re upping the consumer experience, delivering against expectations and addressing simplicity, either with ingredients, convenience or sustainability.”
Of notice, products from smaller companies (revenues less than $1 billion) accounted for more than half of those identified as Pacesetters for the first time in the report’s 23 year existence. 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.
“Two driving forces are reshaping the CPG landscape and are deeply reflected in this year’s New Product Pacesetters,” said Larry Levin, executive vice president, Market and Shopper Intelligence, IRI. “E-commerce 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 (AI) and machine learning (ML) 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.”