In the latest IRI New Product Pacesetters report – released shortly after a report from Nielsen noting that premium options are also driving growth in private label sales – IRI explains that premium launches, especially those touting wellness, indulgence, and giving back to the community, dominated the rankings in 2017.
“Benefits that boost power, experience and convenience give innovators a chance to increase margin potential, and premium-priced launches are moving the year-one sales needle. PepsiCo’s LIFEWTR, for instance [#5 on the pacesetters ranking for 2017], sells at a significant premium versus other convenience/still waters.”
Protein was also a key element in successful new launches, with 36 of 76 pacesetter food brands touting protein attributes, added IRI.
'Millennials are less likely to purchase based solely on brand name'
And while well-known brand owners, from PepsiCo to Hershey, feature prominently in IRI's 2017 Pacesetter list, 40% of food and beverage and 25% of non-food Pacesetters were entirely new brands to the CPG marketplace in 2017, whereas just five years ago, roughly 90% were line extensions, demonstrating consumers’ willingness to try “unknown brands,” claimed IRI.
“Millennials, in particular, are more moved by experiences and solutions to their needs, and less likely to purchase based solely on brand name.
"Small companies — those earning less than $1bn annually — now account for one-quarter of New Product Pacesetter sales, which is a stark change from low double-digit share just five years ago. As a point of comparison, only 15% of non-food and 12% of food and beverage Pacesetters in our 2014 analysis were small companies."
Smaller, more targeted launches have become a new norm in CPG aisles
As for the dollar sales the top new launches notched up, 20% of this year’s 200 top-selling CPG launches generated sales of less than $10m during their first year on shelves, noted IRI, while 89% earned less than $40m in year one sales: “Smaller, more targeted launches have become a new norm in CPG aisles, as manufacturers look to enhance impact with launches that hit more tightly against key consumer needs and wants.”
Susan Viamari, VP, Thought Leadership, Marketing, at IRI, added: “Consumers are demanding products that are customized to their needs, and this type of targeted innovation continues to put small and niche companies on the New Product Pacesetter map."
Asked whether appearing on the Pacesetters report was a good predictor of long-term success, or merely proof that large companies have the money and clout to ramp up distribution and notch up sales of new lines very quickly - she told FoodNavigator-USA: "Many CPG product launches are short-lived—a few years before they’re gone away.
"But, they are still critical because they keep excitement up and generally keep products relevant for consumers (for instance, building in new attributes, new packaging, and other evolutionary changes). We did an analysis last year that showed 61% of top 2015 launches and 78% of top 2014 launches continued growth through their second year."
2017 New Product Pacesetters: Top 10 new food and beverage launches (MULO)
- Halo Top: $324.2m
- GOOD THiNS: $87.0m
- Dunkin' Donuts Iced Coffee: $67.1m
- Nestlé Splash: $55.2m
- LIFEWTR: $50.4m
- SMARTMADE by Smart Ones: $49.3m
- HERSHEY'S Cookie Layer Crunch: $47.7m
- Hillshire Snacking: $47.5m
- Well Yes!: $47.3m
- Cracker Barrel Macaroni & Cheese: $46.6m
Source: IRI Market Advantage, year-one dollar sales, multi-outlet (MULO)
2017 New Product Pacesetters: Top 10 new food & beverage launches (convenience)
- Red Bull Green Edition: $110.7m
- LIFEWTR: $107.6m
- Monster Mutant Super Soda: $42.3m
- HERSHEY'S Cookie Layer Crunch: $4m
- MTN DEW PITCH BLACK: $38.6m
- Four Loko Gold: $34.7m
- MTN DEW BLACK LABEL: $32.8m
- Sprite Tropical Mix: $32.5m
- KIT KAT BIG KAT: $30.9
- Pepsi Cherry Vanilla: $23.4m
Source: IRI Market Advantage, year-one dollar sales, convenience store channel
“New product success is not about launching the next hundred-million-dollar new product. It’s about building relationships that will last a lifetime. Millennials are moved by products that allow them to express themselves as individuals and stewards of benevolence. CPG marketers must invest in innovation that supports these critical priorities."
IRI New Product Pacesetters report April 2018
2017: Halo Top was the clear #1
The annual New Product Pacesetters report looks at year one multi-outlet* dollar sales for brands that completed their first year of sales in 2017.
The clock starts ticking when a product hits 30% distribution and lasts 52 weeks, explains IRI, so would cover, for example, sales of a brand that hit 30% ACV in September 2016 and completed its first full year of sales in September 2017 (and explains why some brands that launched earlier than 2016 – such as Halo Top - are on the list).
The multi-outlet data excludes sales from online platforms, convenience-stores (which IRI tracks separately) and some high-profile retailers including Whole Foods and Costco.
According to these criteria, Halo Top was the clear #1 with sales of $324.2m in US multi-outlet retail sales in its first full year on shelf, followed by Good Thins from Mondelez International at $87m, Dunkin Donuts’ Iced Coffee at $67.1m, Nestlé Splash at $55.2m and PepsiCo’s LIFEWTR at $50.4m.
In the convenience store market, Red Bull Green Edition was #1 with $110.7m in sales followed by LIFEWTR at $107.6m, Monster Mutant Soda at $42.3m and Hershey’s Cookie Layer Crunch at $41m.
Rising stars: Hershey’s Gold, Oui by Yoplait, RXBar, Lay’s Poppables
Rising stars - which IRI defines as promising new brands that have started their year-one, based on above-referenced 30% ACV, and will complete it in 2018 - included Gatorade Flow, Hershey’s Gold, Oui by Yoplait, RXBar, Lay’s Poppables, M&M’s Caramels, Kinder Joy Chocolate Candy, Sunsweet Amazin bottled juice, Jimmy Dean refrigerated simple scrambles, and Ritz Crisp & Thins salty snacks.
* IRI multi-outlet data covers supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar retail chains but excludes online sales, convenience-stores (which IRI measures separately) and some high profile retailers including Costco and Whole Foods.