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Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
Kantar worldpanel FMCG innovation rules
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Kantar worldpanel FMCG innovation rules

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Kantar Worldpanel have mined an extensive library of launches within FMCG to uncover some ground rules for success. …

Kantar Worldpanel have mined an extensive library of launches within FMCG to uncover some ground rules for success.

For more information please visit: http://www.kantarworldpanel.com/en/Expertise

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  • Very long tail (trail?) of initiatives which don’t succeed
  • Now the evidence – Average UK price of an item = £1.Hence 2.5M shoppers almost has to equate to £3m.You can be big with lower penetration (e.g. Baileys Hazelnut) when your average selling price is much higher >£5 or £10.However if I know your penetration and RRP, I know your sales.
  • The same is not true with repeat rates. Very few (if any) launches which have been through the screening and testing process fail through lack of consumer repeat once they hit the shelves – they fail because they haven’t attracted enough buyers.One function of the consumer behaviour is that you are much more likely to repeat buy a brand in your repertoire, than someone picked at random is to purchase it. This comes out particularly with small sample sizes.A brand with 5 purchasers is much more likely to have 3 repeating, than one 50 having 30 and certainly 500 with 300. Hence the launches with the highest repeat rates are invariably small – or particularly niche.However, by the time you have thousands on buyers, then frequency, loyalty and repeat all follow as a function of this. Certainly take the old maxim of needing 40% repeat rate to be successful with a large dose of salt.
  • Continuing to emphasise the importance of distribution1 store = .2% chance of £5m2 or 3 stores = 1%(Any) 4+ = 15%
  • And finally number of SKUs in the launch3+ = 17% shot
  • Pictures --- this years winners….We imagine to get X% to buy Y% must know about you?
  • Transcript

    • 1. © Kantar Worldpanel Some rules of the NPD game WHAT CAN AN ANALYTICAL REVIEW OF 7,300 UK FMCG NEW LAUNCHES TELL US?
    • 2. © Kantar Worldpanel £0 £5 £10 £15 £20 £25 Year End Sales – 7,300 UK Branded Grocery Launches within 287 Categories in Jan 2010 - Jan 2012 To be big is hard: only 3% achieve over £5m in first year Cum Spend after 1 year (Millions) 15% 3% 7,300 Ranked Launches
    • 3. © Kantar Worldpanel 3 © Kantar Worldpanel Attraction (number of buyers) is the real key to size of brand launch MAT figures for 550 non-seasonal UK food & soft drink branded launches, sold in more than one retailer, with at least 52 w/e sales 0 2 4 6 8 10 12 14 16 18 20 £0 £5,000 £10,000 £15,000 £20,000 £25,000 Year 1 Sales £000s Annual Penetration % Each Point represents an Individual Launch Flora Pro Active Buttery Lurpak Spreadable Lightest Kenco MillicanoToffee Dodgers Foxs Ambers Think how do I attract at least 4% of the population to buy the brand to be one the big launches
    • 4. © Kantar Worldpanel 4 © Kantar Worldpanel 0 10 20 30 40 50 60 £0 £5,000 £10,000 £15,000 £20,000 £25,000 Small brands have high and low repeat rates Year 1 Sales £000s Annual Repeat % Each Point represents an Individual Launch You can’t predict the size of the brand based on the repeat rate MAT figures for 550 non-seasonal food & soft drink branded launches, sold in more than one retailer, with at least 52 w/e sales
    • 5. © Kantar Worldpanel Average size of Launch Band (£m) Average # stores with sales (max=6) 0 1 2 3 4 5 6 £0 £2 £4 £6 £8 £10 £12 £14 £16 7300 branded grocery launches grouped into MAT sales bands – what was the average number of different stores in which they had sales? Attraction comes from being available to buy everywhere… .2% 1% 15%4+ Stores 2-3 Stores 1 Stores Chance of reaching £5m if sold in :- 5 times more likely to a 5m or more launch if I know you have good distribution
    • 6. © Kantar Worldpanel Num of SKUs In initiative 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 0 2 4 6 8 10 12 14 16 The same story applies if you offer more choice to the consumer Average size of Launch Band (£m) 1% 6% 17%4+ SKUs 2-3 SKUs 1 SKU Chance of reaching £5m if launching :- 7300 branded grocery launches grouped into MAT sales bands – what was the average number of SKUs launched in Year 1? Nearly 6 times more likely to a 5m or more launch if you offer 4 or more skus
    • 7. © Kantar Worldpanel More 170%150-170%130-150%110-130%90-110%70-90%50-70%Less <50% Count of Launches within each band Number of Launches 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Year End Sales – 7,300 Branded Grocery Launches within 287 Categories in Jan 2010 - Jan 2012 RSP Price of Launch versus Parent Brand The majority of launches are pitched around the existing brand price It seems that most launches struggle to charge a real premium
    • 8. © Kantar Worldpanel More 170%150-170%130-150%110-130%90-110%70-90%50-70%Less <50% Odds of Launch Breaking £5m in 1st Year 0 2 4 6 8 10 12 14 16 New launches that are heavily promoted are more likely to succeed 3% Year End Sales – 7,300 Branded Grocery Launches within 287 Categories in Jan 2010 - Jan 2012 % of launches reaching £5m in 1st year Promotional level of Launch versus promotional level in category But potentially this could mean difficulties for growth in second year
    • 9. © Kantar Worldpanel More umbrellas than ever before: a well known brand with lots of alternatives (as opposed to lots of new brands replacing old ones) Examples drawn from top 10 branded launches from Sep 2012 to Dec 2013 The winners tend to be well known and well publicised through specific ad campaigns
    • 10. © Kantar Worldpanel Sales Benefit to Manufacturer However, managing the portfolio – gaining incremental volume & profit to the overall brand – is perhaps harder than ever with so many launches that are like the parent . Benefit to manufacturer comprises category gain and steal from competitor brands
    • 11. © Kantar Worldpanel Are you over-estimating the chances of success? What has been a top 10% launch in the past few years in the category ? Does the new launch idea have mass appeal? How many buyers do I need to attract to reach my target? What we would ask after seeing these results? How are you planning to execute the launch? Are you properly calculating the incremental success to the main brand & manufacturer?
    • 12. © Kantar Worldpanel© Kantar Worldpanel An analytical review of 7,300 launches SOME RULES OF THE NPD GAME http://www.kantarworldpanel.com/en/Expertise For further information please visit:

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