New products are the lifeblood of the food business. They add excitement to the category... You've heard it all before, and along with the value of new items comes the reality that the vast majority will no longer be on store shelves a year after being introduced for a very simple reason consumers didn't buy them.
Now, there are many reasons products either succeed or fail and many of those have nothing to do with the item's quality or even the retail price. There are slotting fees and associated upfront monies to pay, consumer marketing to create a buzz, retailer support, especially in the area of store-level compliance, etc.
Still with the deck clearly stacked against them, manufacturers continue to roll out record numbers of new items. According to Mintel International, 2006 saw 17,799 new products introduced. That number was almost 2,000 higher than the year before.
As for what was hot in 2006 and what should be hot in 2007, Lynn Dornblaser, director of Mintel Custom Solutions, told The New York Times, "It seems now that everybody is getting into organics."
Mintel's numbers indicate that 3,761 new food items billed as organic or natural were introduced in 2006. That number, many believe, is likely to grow as more manufacturers and retailers place greater emphasis on the business. Wal-Mart's stated commitment to growing organic food sales in its stores is seen by many as the event that will finally bring these items into the mainstream.
Aside from organic and natural foods, there are other categories where Mintel expects to see a jump in new items. Included among these are baby foods, ready-to-eat items and desserts.
"We're also seeing more of a focus on authentically ethnic foods," Ms. Dornblaser said. "It's not just pasta sauce: it's pasta sauce from Tuscany."
Indian food, while still small, is achieving exponential growth. Last year, 143 new Indian items were rolled out, which was nearly twice as many products that had their premier in 2005.
Looking ahead, Mintel has identified trends it believes will have an effect on new items to hit the market this year.
"The overall theme of responsibility - to the environment, to growers, and to one's well-being - can be seen throughout many of the year's upcoming trends," said Ms. Dornblaser in a release put out by Mintel last November. "Manufacturers are offering consumers more opportunities to support causes or to participate in sustainability and conservation. In addition, we are seeing increased targeting of both younger consumers and older consumers, addressing the needs of the two largest consumer groups. While most of the key trends for 2007 focus on simplicity, we will see creative uses of technology, aiming to make the lives of consumers easier."
Discussion Questions: What factors are most likely to determine if a new product succeeds or fails? Does the current procurement system in mainstream grocery work to hinder both manufacturer and retailer success when it comes to bringing new items to market?