BURSTING WITH NEW PRODUCTS, THERE’S NEVER BEEN A BETTER TIME FOR BREAKTHROUGH INNOVATION

Kristin Behrmann, Director, Nielsen BASES

PERSPECTIVES | 12-05-2019

The consumer packaged goods (CPG) market is bursting with new products. Incredibly, an average of 30,000 new products launch each year. That’s enough to fill the average grocery store. With all of this new comes great opportunity, change, and, of course, competition.

Technology has fueled much of that change, allowing consumers to access just about anything they desire with just a few keystrokes. This, in turn, has opened the doors of engagement opportunity to manufacturers, retailers and marketers, given the wealth of information about what consumers need and want to foster sharpened message targeting and a wealth of personalization options.

30,000 new products each year is a lot for anyone to think about, and it might seem hard to stand out in a sea that large. But, in reality, there has never been a better time for manufacturers to find breakthrough success with innovation. In fact, one-third of U.S. consumers say they are actively looking for new products to try. And with so many new launches in the market, this presents a unique challenge for legacy brands and products as well as a great opportunity for bold innovations.

It’s time to think beyond the “fewer, bigger, better” strategy. Marketers need to consider alternative roads to success to: differentiate, remain relevant and win in this increasingly competitive market. Importantly, if done correctly, this dynamic offers opportunity for everyone. Here’s proof: We conducted an analysis of new product launches over the past few years and found that while nearly 70% of all launches were variety extensions off of existing brands, new brands and sub-brands generated the same levels of success* as variety extensions. It’s time to put to bed the perception that close-in line extensions are “safer”; it just isn’t true.


While there hasn’t been a better time for achieving breakthrough success, not all innovations get there. Notably, only 30% of all U.S. launches will sustain or grow their sales in market during their first two years. The ones that succeed combine a great idea with an outstanding product experience and a tailored launch plan specific to the initiative. And this isn’t just for big companies with long track records.  We see that strong initiatives and outstanding products are coming from a remarkably diverse set of places. For example, newcomer White Claw Hard Seltzer is a stand-out trailblazer in the alcoholic beverage space, while Harry’s carved out success in the e-commerce space before expanding in retail. Brands with longer histories can find success too: For example, huge successes were seen from both Dove, which entered baby care, and Yoplait, which launched a French style yogurt.

Importantly, there isn’t just one path to innovation success. In looking at Nielsen’s 2019 Top 25 U.S. Breakthrough Innovations, we see a handful of standout approaches:

• Brand extensions from other countries and channels
• New brands to the U.S. market
• “In and out” strategic innovations
• Extensions from current brands and products

Collectively, these 25 launches contribute more than 70 times their fair share to the innovation marketplace. Said differently, less than 0.1% of the launches from those 30,000 SKUs per year contributed 6% of innovation sales. Their success paired a broadly appealing idea with a strong product experience and a marketing plan that was tailor made for their launch. They provide lessons for us all: Breakthrough success is there for anyone who wants it.

*We define “success” as sustaining or growing from the new product’s first year in market to the second (specifically, achieving at least 90% of sales from year one in year two).