Between 2009 and 2010, the total number of new products coming to market, across the 49 countries covered by Mintel’s Global New Products Database, grew by around 3%. That’s down on the 8% growth recorded 2008-09, but still reflects an upward trend.
North America in particular experienced a significant uplift in activity in 2010. This followed the dip in 2009 caused by industry consolidation, which saw major players focusing on core brands, and smaller, independent producers facing tougher marketing conditions.
Activity in Europe was down very slightly (2%) in 2010, reflecting the onset of the economic downturn in many parts of the region, and activity in the countries in the Asia Pacific increased by just 2% during the same period. After several years of growth, the number of new products launched in Latin America fell by 10%.
As with all figures, it’s worthwhile to take a more detailed look, as the number of genuinely ‘new’ products has been on a slight downward trend for some years and now represents just half of overall activity. New varieties, for example new flavours, added to existing ranges have also fallen to less than a third of total introductions. Instead, the focus has been on new packaging; new designs, certainly, but often new package formats that seek to address new consumption occasions, or create more affordable options in an increasingly competitive market.
Some categories have also been more badly affected than others. Among those that saw a significant increase in NPD activity were bakery products, snacks (both up 12% between 2009 and 2010), and chocolate confectionery (+8%), which seems to point to the idea that consumers continue to enjoy treating themselves with affordable, everyday indulgence products, perhaps even more so in times of economic pressure.
Growth in new bakery mixes boosted the number of new products launched in the bakery category, reflecting the growing consumer interest in home cooking, driven as much by consumer interest in food preparation as by the economic motivation to create something cheaper than a ready-made equivalent.
The snacks category in particular experienced a greater variety in the new product offering, with new styles of product (and new brands) designed to compete with traditional savoury products appearing on the market.
One of the biggest movers in this area was Special K from Kellogg’s. The brand is synonymous with lower calorie foods and is already active in sweet snacking with cereal bars, but in late 2010 in the US, Kellogg’s launched Cracker Chips, potato-based baked snacks in sea salt and sour cream & onion flavours. These are sold in a 113g pack priced at around US$2.50, with a 30g serving of 30 chips delivering 110 calories and 2.5g fat. Sales have already reached over $8m.
One other factor influencing total new product activity during the past year has been the increasingly important role of retailers’ private label, which has come a long way from being merely a product with a store’s name on it, or a cheaper copy of a leading brand. Private label has built itself into a serious force in food and drink marketing thanks to a combination of convenience, competitive pricing and innovation through differentiation or segmentation.
Private label products now account for 18% of total NPD globally, supported by the effect that the recession has had on consumers’ budgets, and this shows little sign of slowing down.
In Mintel research in August 2010, 44% of respondents in the UK stated that they cook from scratch more at home, instead of eating out. This is clearly not good news for the foodservice industry, but it has presented some interesting opportunities for retail brands, which can capitalise on the growing interest in food and cooking, and consumers’ increased motivation to choose an affordable treat for consuming at home, rather than go out to a restaurant.
One area of strong development has been premium-positioned culinary products that appeal to the experimental and experiential home cook, with some imaginative solutions such as Brum’ from French company MB Aromes.
Described as the new ‘indulgent revolution’, this innovative cooking accessory is available in 22 sweet and savoury flavours that can be used on any kind of dish. The name Brum’ is French for ‘mist’ and indicates the dispense system – a stylish aluminium spray. The product itself is based on organic vegetable oil, distilled water, and organic essential oil, according to variety.
Other recent examples include Florisens’ essential oil crystals for cooking, an award winner at Sial 2010. This innovative range of seasonings provide the benefits of essential oils in a base of prebiotic agave pulp, and can be sprinkled directly on dishes or used to flavour water.
Bringing that concept down to a more everyday level, General Mills in the US introduced Good Earth Restaurant Favorites shelf-stable meal kits, which are described as restaurant quality meals at home. They feature chef-inspired tips to customise the meals and are marketed under the tagline ‘Stay in and go all out’.
Varieties include Tuscan Chicken with Penne Pasta, with the kit comprising whole grain pasta, wine sauce, Tuscan seasoning and seasoned cornstarch. The consumer just has to add chicken. A kit to serve five portions retails at around $4.80.
An investigation of how new products are labelled and positioned to the consumer provides a useful indication of the broad directions that the food and beverage industry is taking. So where has all the effort and budget gone in terms of developing, launching and marketing new products?
Over the past 12-18 months, ‘natural’ claims of various kinds have again been noted on about a quarter of all new products globally. This category includes products labelled as organic, all-natural or made with 100% natural ingredients, as well as ‘additive-free’ where that’s clearly a front-of-pack statement.
Although ‘natural’ products retain a significant share of the overall number of new products, the category has seen virtually no growth in the past couple of years. For some categories, and in some countries, this reflects that it has reached a saturation point. Most leading brands and private labels have reformulated existing lines and continue to launch new lines that are ‘additive-free’ or that emphasise ‘natural ingredients’, leaving much less space for differentiation than was the case three or more years ago.
Indeed, additive-free has become the norm in many sectors. Mintel predicts the occurrence of a ‘natural shakedown’ in this category in the near future, including a likely intervention by regulatory bodies to set clearer guidelines in some areas, most notably governing ill-defined and widely (ab)used terms.
The economic downturn has also had an influence on the ‘natural’ positioning, since natural formulations (natural colours or flavours, for example) are typically more expensive. One area that has become complex recently is that of sweeteners. The use of high fructose corn syrup (HFCS) as an inexpensive sweetener has increased in new product formulations over the past few months. That in itself is hardly surprising, but the use of HFCS was actually in decline in North America (where it’s most widely used) during 2009 in the face of growing media and consumer pressure linking HFCS to obesity.
Several major brands have launched products that specifically feature a ‘no HFCS’ message front-of-pack, usually as part of a more general ‘natural’ positioning. General Mills extended the Yoplait Go-Gurt (yogurt in a tube) brand with Simply … Go-Gurt, prominently labelled as ‘free from high fructose corn syrup, artificial colours and flavours, and made with milk that isn’t treated with rBST/rBGH growth hormones’.
With the Simply version being available in flavours similar to the regular product, and at the same price point (about $3 for eight single-serve tubes), it will be interesting to see how parental concern over the ‘unknown’ and ‘artificial’ ingredient, HFCS, translates into action at the point of sale.
At the same time, especially in Europe, all the discussion around sweeteners has focused on stevia extract and its positioning as a ‘natural’ sweetener.
Used in Switzerland for some time, stevia extract appeared in products in France for the first time in 2010. These included a host of tabletop sweeteners from PureVia, Hermesetas, Canderel, Béghin Say and others.
In beverages, stevia extract was used in combination with sucrose for a reduced sugar and/or reduced calorie message – for example on Fanta still fruit drinks from Coca-Cola, with 30% reduced sugar. In the yogurt market, Danone used stevia extract in a new line of Taillefine 0% fat yogurts. The brand has always been positioned as ‘light’, but these variants are also clearly labelled as free from colours, preservatives and aspartame.
The future for stevia extract in the wider European Union remains unclear, but the French market has already amply demonstrated its potential in terms of new formulations and new consumer messaging.
The number of new products coming to market with nutritional or health positioning seems barely to have changed over the past two to three years. Products with ‘low in’ claims (low or no salt, sugar, calories, sodium etc.) stood at 17% of global food and beverage introductions in 2010, on a par with 2009.
Sodium is still subject to ‘quiet reduction’ – an ongoing process of reduction by incremental amounts – but the reductions are generally not communicated to the consumer. Introductions of new products with added vitamins, minerals or fibre, meanwhile, are at best flat, and products launched with functional health claims have slowed significantly in the face of regulatory difficulties.
However, this doesn’t mean that the past year has passed without the launch of new functional foods, but the great majority of introductions have been from smaller players, and in relatively established areas such as digestive and cardiovascular health.
One notable major launch was from Nestlé in France. Nesfluid, described as a Hydra Nutrition drink, appeared in September 2010. Based on coconut water with whey or skimmed milk, juice, green tea, vitamins and minerals, Nesfluid is available in six varieties, each formulated for specific consumer needs.
A ‘Protect’ variant, for example, features zinc & selenium for seniors and is flavoured with pomegranate, while the chocolate flavoured ‘Reinforce’ variety for children contains vitamin D, calcium & phosphorous. Nesfluid is presented in a 250ml bottle priced at around €1.65, sufficiently large to fulfil on its hydration claim while remaining a convenient, single-serve beverage.
Coconut water has enjoyed something of a boom, featuring in more than twice as many new products in 2010 as in the previous year. Nesfluid may be one influence on that, and the ‘trendiness’ of coconut water brands such as Vita Coco is another major factor. The underlying reason, however, may simply be that coconut water hits all the right buttons: it’s hydrating, natural, works well with fruit flavours and carries a sense of the exotic and healthy.
Although there are other major players active in the area of fortified and functional foods they don’t appear to be making a dramatic play for their share of this increasingly complex and competitive market. They have opted instead for a (relatively) safe course of action by introducing flavour extensions and package format changes to existing lines.
Kraft Foods, now owner of the Trident chewing gum business since it acquired Cadbury, has announced the launch of an interesting new product in the US. Trident Vitality is a sugar-free chewing gum with a soft centre, in three varieties aimed at 25-34 year old consumers.
Trident Vitality Vigorate delivers 10% of the daily value of vitamin C, Rejuve is a blend of mint and white tea, and Awaken features ginseng. It retails at around $1.30 for a pack of nine pieces. Using chewing gum as a carrier for ‘healthful’ ingredients isn’t in itself new, but perhaps the power of the Trident brand can prove that mainstream success is achievable.
Sustainability, ethical and environmental issues haven’t gone away with the recession. They’re arguably stronger than ever, with a greater variety of ‘green’ products and packages appearing in mainstream retail, and even more media coverage.
Ethical and environmental claims on new products continued to rise steadily during the past year, and have been noted on 13% of all new food and drink products globally in 2010 versus 9% in 2009. However, there are few ‘new’ developments to note. The focus has been mainly on the basics and on simple steps that resonate well with consumers in times of economic pressure (and where, preferably, economic and environmental benefits coincide). As a result, some of the greatest focus recently has been on package material reduction – for example, where there are potential benefits both to manufacturer and consumer.
The ‘boxless’ package of cereal bars (eg Quaker’s Rip ‘n Go pack), though not an entirely new concept, offers cost savings to the supplier and is at least ‘as convenient’ for the consumer. A pack of 10 Rip ‘n Go bars sells for about $2. Dolphin Water in The Netherlands is sold in a 250ml Smartpack – a transparent pouch with a drip-free seal that is also lightweight, easy to use and 100% recyclable (about €0.99).
In early 2010, Mintel started to record major companies becoming more involved in ‘alternative’ materials such as bioplastics. In the US for its Coke and Dasani water brands, The Coca-Cola Company introduced PlantBottle technology, which results in bottles that are 100% recyclable and made from PET, plus up to 30% plant-based materials.
PepsiCo selected one of its major snack brands, Frito-Lay Sun Chips, for the North American launch of its environmental initiative. The chips were introduced in the ‘world’s first’ 100% compostable bag made from more than 90% renewable, plant-based materials that break down completely into compost in a hot, active home or industrial compost pile.
Unfortunately, a byproduct of the material was an extremely noisy package, which deterred US consumers to the extent that PepsiCo had to withdraw the pack for modification and eventually relaunch in early 2011.
Heinz has recently announced a move to bioplastics for its lead ketchup brand, while Danone’s Actimel has also recently announced a similar move.
The topic of renewable materials had become something of a controversial issue – ‘Why use food crops to produce packaging?’ – but the involvement of ever larger brands on an international scale could well sway the outcome of this debate. However, only time will tell.
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