New! Improved! Better than ever!
It's almost like a game - manufacturers and producers constantly trying to come up with new ways to tempt you to spend your money. But it is very serious business. Companies know that if they can come up with the new product - the one that all hungry consumers suddenly flock to - they can rake in megabucks. And so every year, you see all those new products and variations of old products on the supermarket shelves.No matter that there are already more than 21,300 items to choose from in the average supermarket. Last year, companies introduced some 16,863 more.
You'd think that the shelves would soon be too crowded for anything new. But the fact is, most new products don't stay around very long. In fact, according to one source, about 94 percent of them fail. But the possibility that this new one just might be the big hit keeps the producers trying.
Last year was an especially big year for new products, says Lynn Dornblaser, editor of the trade publication New Product News, showing a big increase over 1994. At the same time, said Bruce Pivarunas, senior vice president with Analytic Consulting Group, a marketing research firm, market forces are making new product introduction more competitive than ever.
Speaking at the annual Food Market Institute meetings in Chicago this spring, Dornblaser and Pivarunas provided a look at some of the trends and marketing of new products.
These are both good and not-so-good times for the food marketing industry, they said. On the plus side is the fact that the average consumer makes 1.4 shopping trips per week and spends an average of $32 per trip. But there is also the fact that percentage of money spent on food is declining, and food consumption is continuing to shift away from eating at home to more meals on the go.
Food's share of total consumer spending has decreased from just over 16 percent in 1989 to barely over 14.5 percent in 1995, says Pivarunas. And the percentage of total income spent for "food at home" is also down, from 10.2 percent in 1970 to 6.7 percent in 1995. At the same time, the percentage of income spent on "eating out" has increased from 3.6 percent to 4.5 percent.
"Consumers nightly face the decision: prepare dinner or eat or order out," he said. "And more and more are choosing meals on the go."
So perhaps it is not surprising that food manufacturers are looking for new ways to tempt consumers. Research shows, says Pivarunas, that new products are very important to company growth.
Last year, said Dornblaser, new product introductions were up 12 percent over the previous year. By far the majority (86 percent) of new products come as extensions of existing brand-new lines. Only 14 percent were totally new brands. "Success is particularly difficult for `new' names," said Pivarunas. And even 55 percent of line extensions fail.
Last year the most new products came in the condiment category, followed by beverages, candy-gum-snacks, and bakery goods.
By company, Sara Lee introduced the most new items (largely due to its gourmet coffee line), followed by Philip Morris, Nestle, ConAgra, Campbell Soup, Unilever and Nabisco.
So what did consumers find new on grocery shelves last year?
Among the major trends in new products spotted at New Product News are these, says Dornblaser:
LOW FAT REIGNS: Low fat products are by far the leaders of the new product parade and were at an all-time high. More than 10 percent of all new products last year were low fat.
Low-calorie was also a popular product claim. But last year saw a significant decline in the number of products claiming to be "all natural" or having "no additives" or "low cholesterol." However, Dornblaser's not sure whether its a true decline in number of products or just in the number of claims.
Consumers saw low-fat expansion into all kinds of categories - from candy bars to Italian salami. And almost all major manufacturers have something to offer. Kraft's "free" label has become one of the most widespread; SnackWells and Healthy Choice are among the leaders. And, in the future, look for even more action in the traditional "hot" categories for low-fat foods: ice cream, cookies, crackers, chips and salty snacks.
As an interesting side note to this quest for low fat, Pivarunas points out that 34 percent of Americans are obese - up 25 percent in the last 10 years. The average adult gained eight pounds in the past 10 years, and 4.7 million American younsters (age 6 to 17) are severely overweight. "That's at least a little odd for a health-crazed society. Which shows that low fat isn't everything."
FLAVOR COUNTS: It's almost as though consumers are saying "we need low fat, but we want indulgence." Regular Ranch salad dressing, for example, still outsells low-fat about three to one. Ben and Jerry's Heath Bar Crunch ice cream outsells its frozen yogurt. Campbell's red-and-white label soup outsells all the "healthy" brands. And regular Chips Ahoy and Oreo cookies outsell the low-fat varieties six-to-one and nine-to-one respectively.
Consumers want foods that won't kill them, but they want them to taste good, too, says Dornblaser.
CONVENIENCE WITH A TWIST: Busy consumers are eager to find foods that can be fixed in a hurry, and the ways manufacturers are responding include: frozen pasta/vegetable combinations; salad in a bag; prepacked deli meats; cooked, seasoned poultry cuts for salads and stir frys; cut up fruits and melons, including peeled oranges and grapefruit; yogurt drinks in containers that fit in car-cup holders.
HMRs: The hot new jargon among food manufacturers is "home meal replacements" - foods that are ready or almost ready to eat but can be purchased at the supermarket rather than a fast-food place or deli. Look for even more in the way of hand-held, dough-encased sandwiches (such as Hot Pockets and Healthy Choice Hearty Handfuls). Look for almost ready-to-eat lunches (Bumblebee's tuna salad and crackers combo or even more Lunchables choices, including pizza). Salad-in-a-bag is expanding into salad-in-a-bowl, complete with dressing, croutons and fork.
OTHER TRENDS: If there is one food category Dornblaser would single out as trendy it would be yogurt. Not plain yogurt, but yogurt fancied up with fruit and flavors and marketed as a dessert not a snack.
Also, look for rice pudding and tapioca from traditional yogurt companies.
Other predictions from Dornblaser:
- More flavored milks for adults.
- Beans are in vogue.
- Flavored butters.
- Products packaged for aging consumers.
What does Pivarunas see as the next big hit? If he could design the ideal new product for 1996, it would be in creative, convenience-oriented packaging. It would offer indulgence and reward, but at the same time would be low fat. And it would appeal to both children and adults. But exactly what this wonder product would be is hard to say. Watch the grocery shelves at your nearest supermarket.
*****
ADDITIONAL INFORMATION
Top 10 new food products
Millions of dollar sales 1993-1994
Nabisco Snackwells $605.30
(Cookies & Crackers)
Fat Free Newtons $384.60
Fresh Express $239.00
(Rfg salads)
Liptons $186.00
Recipe Secrets
Weight Watchers $173.90
Smart Ones
Dole $151.70
(Rfg salads)
Nestle $149.70
Sweet Success
Healthy Choice $145.20
Thick & Hearty soup
Post $144.90
Banana Nut Crunch
Source: Information Resources Inc.