We Are What We Eat

Susan Viamari,
IRI Vice President, Thought Leadership

Successful food and beverage products today must bring solutions to demanding consumers. Beyond serving a simple human need to fuel our bodies and nourish our families, food today contributes in a substantial way to consumers' efforts to live healthy lifestyles. People want convenient, prepared, packaged goods, but they also want the attributes and benefits most commonly associated with pure, clean, fresh eating. Simply stated, consumers' food and beverage needs are complex, and manufacturers that can provide quick and easy meal and snack-time solutions will win in the marketplace.

As a result, new product introductions must take a cautious, measured approach, with considerations more complex than ever before. New products must fit everyday lifestyles and goals, and with so many options, consumers do not need to settle for less. Many CPG manufacturers have delivered on that demand, thus, personalization is a huge theme across 2016's top-selling food and beverage launches.

IRI's 2016 food and beverage New Product Pacesetters illustrate the escalating integration of food and beverage into consumers' overall healthy living plans. With exceptional first-year CPG sales success for newly launched products, this year's Pacesetters deliver on consumer interest in proactive measures to protect or improve their health. This has driven innovation in healthier-for-you solutions that also offer the sought-after benefits of convenience and taste experiences.

Food and Beverage Products are the Scaffolding for Building a Healthy Lifestyle

Of 100 food and beverage brands that achieved 2016 Pacesetter status, 47 tout healthier-for-you attributes. With DairyPure® milk's substantial contribution, these brands account for 67 percent of food and beverage Pacesetter dollars — still an impressive 48 percent if DairyPure sales are excluded.

Further, 57 percent of food and beverage categories that introduced healthier NPP solutions grew faster than the sector average, with some outperforming by a wide margin.

Prevention: The First Line of Defense

Non-food items have naturally been a big part of people's preventative care — from vitamins to skin care, the CPG industry churns products to treat and manage simple ailments and chronic conditions. The food and beverage market has shifted its attention to these goals in recent years, as the market for inside-out prevention and management of wellness-related issues is escalating.

CPG food and beverage items that embrace healthier ingredients and eliminate less desirable and/or not easily understood ingredients are hitting the mark with shoppers.

Weigh the Benefits

Benefits positioning is a key growth strategy, well-represented in food and beverage Pacesetters. More than two-thirds of consumers recognize that the food and beverages they consume play an important role in supporting their health. Nonetheless, some consumers are more diet-conscious than others and, dietary mindset significantly impacts the new product purchase consideration set, with different segments of people seeking different product benefits. From fresh/not processed to sugar content and the purity of ingredients, many factors influence new product purchases. Consumers carefully consider their purchases, weighing the value-added benefits and the contribution these purchases will make in supporting their current and desired lifestyle.

Wellness Matters, But Make Room for Indulgence

CPG products delivering clean, simple and fresh are winning, but that's not because people have eschewed indulgent items. Transparency is sought after — better-for-you, natural and organic, healthful ingredients — but the desire for indulgences (on occasion) still is strong.

Restaurant-inspired items, meal solutions that are complex but easy to prepare and convenient, as well as sweet snacks have seen a boon.

This year's food and beverage New Product Pacesetters teach a lot about how consumers spend, what is important to them and what will make an impact on them — and on the market. Food and beverage solutions that tap more targeted consumer preferences — and strike a balance between wellness and indulgence — win with shoppers. IRI's Rising Stars — the market's newest entrants that are poised to earn 2017 Pacesetter status — continue to reflect this movement as they deliver quick and easy, full-flavor solutions to meet the lifestyle needs of today's health-minded, but still occasionally indulgent, population. RL

Factors Influencing New Product
Consideration Set — Percent of Consumers
Healthier EaterFree Eater
52% Is fresh/not processed57% Satisfies my appetite
44% Is low in sugar51% Is quick and easy to prepare
42% Helps me address nutritional goals48% Has low price point
42% Has easy-to-understand ingredients41% Appeals to many peoplein my household
42% Satisfies my appetite37% Has easy-to-understand ingredients

Note: Healthy Eater follows a strict diet or is conscientious about eating behaviors 80 percent of the time and allows for indulgences the other 20 percent; Free Eater eats with little consideration of nutritional or caloric intake.

Food & Beverage Consumers
Make Room for Treats

37% splurge about half the time

26% make room in their diet for occasional treats

22% eat with little or no consideration of nutritional or caloric intake

IRI 2016 New Product Pacesetters