Consumer Products

The Class in Mass – New packaged goods in 2003

The consumer products industry is the world’s most prolific producer of new and improved products. In the US alone, packaged goods companies launched 33,678 new food, beverage, health, beauty, household and pet products in 2003, about 6 percent more than the 31,785 introduced the previous year. This information comes from the Marketing Intelligence Service in Naples, N.Y., which tracks new product launches in the United States via a service called Productscan®.

Most of these new products are variants on existing themes – a new flavor of Ragu Spaghetti Sauce or Crest toothpaste, for example. But 8.5 percent of new products last year earned Productscan’s "innovation" rating, offering "breakthrough features or benefits" in areas like packaging, technology and merchandising.

From this set of about 2800 innovative products, Productscan chose ten products for its innovations of the year in 2003. Here are three examples:


1. Kellogg Drink’n Crunch Portable Cereals. An inner cup contains cereal, an outer cup is filled with milk, so the cereal never becomes soggy.	2. Aquafresh floss ‘n’ cap Fluoride Toothpaste. Floss is inside a cap at the top of the tube.	3. Minute Maid Premium Heart Wise. An 8 ounce service contains 1 gram of plant sterols, an ingredient responsible for reducing cholesterol.

The short sad life of most new packaged goods products

Most of the more than 30,000 new products the packaged goods companies launched last year will not succeed. This is true for a number of reasons. First, the product may not perform as expected, or there may be lower demand than anticipated.

Second, logistics play a major role in limiting product lives. Because there’s tremendous competition for shelf space in stores that sell packaged goods, and because the number of new products introduced every year is so large, it’s difficult for new products to find and maintain a place on the shelf.

As the chart below shows, the survival rate for even the notable new products has been less than 30% over the past six years. Only 17 of the sixty products highlighted as the most notable by Productscan from 1998 to 2003 are still available for purchase at online grocer Peapod.

The survival rate of these products is much higher than for most packaged goods. Studies by Doblin and by Productscan predict that only about 4 percent of all the new products launched in 2003 will still be available four years from now.

Receiving the recognition of a notable innovation corresponds with a seven-fold increase in the product’s survival rate, but even with such an increase, long-lived success comes less than a third of the time.

P&G is the most notable innovator

The chart below lists companies that have won more than one notable innovation mention from 1998 to 2003.

While this is an imperfect measure of the most innovative consumer products companies, the strength of both P&G and SC Johnson in these rankings is evident. P&G products were mentioned 5 times in 6 years, and SC Johnson’s were mentioned 4 times. P&G’s products were also the most durable – of its 5 products, two remain on the virtual shelves of online grocer Peapod. In a tough innovation environment, P&G demonstrates both class and durability.

More information:

Productscan is at www.productscan.com

I put a small dataset together that compiles the 10 "most innovative" packaged goods products, with their manufacturer, and whether they are available from a major online retailer (Peapod for groceries, CVS for healthcare products, Home Depot for home products). Here’s a link to the dataset:

http://www.biz-architect.com/notable_consumer_product_innovations.htm

The Doblin Group is at www.doblin.com

Peapod is at www.peapod.com. It’s a division of Stop & Shop.

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