Customized products from lesser-known brands are becoming more popular with consumers, especially the Millennial market, according to IRI’s 2017 New Product Pacesetters report.
Among the new brands debuting in 2017, 49% of the top-ranking ones came from small manufacturers — defined as those earning less than $1 billion annually — and accounted for 26% of pacesetter dollars, the report found.
For the top 100 food and beverage winners, median year-one sales were $14.5 million. Halo Top ice cream, which was the top consumer packaged goods brand of 2017, had year-one sales of $324.2 million. (Halo Top’s sales were excluded from the median.) Rounding out the top 10 brands were Good Thins, Dunkin’ Donuts Iced Coffee, Nestle Splash, LIFEWTR By PepsiCo, Smartmade by Smart Ones, Hershey’s Cookie Layer Crunch, Hillshire Snacking, Well Yes! ny Campbell Soup Co. and Cracker Barrel Macaroni and Cheese.
Several of the winning products likely benefited from consumer loyalty to certain manufacturers, such as Dunkin’ Donuts Iced Coffee, Nestle Splash and Hershey’s Cookie Layer Crunch, the report stated.
Yet the overall list shows “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,” said Susan Viamari, vice president of thought leadership for IRI. “This clearly demonstrates consumers’ willingness to try ‘unknown’ brands.”
Five years ago, almost nine out of every 10 Pacesetters launched were extensions of existing brand lines, Viamari points out. But in 2017, 40% of food and beverage Pacesetters were brands entirely new to the consumer packaged goods market.
“Smaller, more targeted product launches have become the new norm in CPG aisles,” said Larry Levin, executive vice president of consumer and shopper marketing for IRI. “In a testament to the power of this shift, 20% of this year’s top-selling launches earned less than $10 million during their first year on the shelves, continuing a trend we found in last year’s analysis.”
“Millennials, in particular, are more moved by experiences and solutions to their needs and less likely to purchase based solely on brand name,” points out Viamari.
Millennials are willing to spend money on things that matter to them. Of the 20 largest 2017 pacesetter brands, 85% command a price premium compared to the average price of other products in their category, such as LIFEWTR, the report stated.
Wellness and self-care is important to Millennials as well, shown in the popularity of Campbell’s Well Yes! soup.
Yet candy and gum still accounted for 9% of food pacesetter dollars, which is in line with trends seen over the past five years. Healthier sweet snacks like Weight Watchers ice cream treats are becoming more prevalent.
Eighteen of the 76 food pacesetters were breakfast foods, such as more indulgent options like Kellogg’s Cinnamon Frosted Flakes (ranked 19) and healthier, on-the-go options like Jimmy Dean Delights Frittatas (ranked 23).
For the full story, go to this week’s Food Institute Report.
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Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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