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New Product Pacesetters Driving Lasting Disruptive Innovation, with Larry Levin
- 1. New Product Pacesetters: Driving Lasting Disruptive Innovation LARRY LEVIN Executive Vice President of Mid-Market Industry Insights, IRI Larry Levin has spent his entire career in market research, leading engagements for many of the world’s largest manufacturers and retailers. Larry joined IRI in February 2010 and was promoted to his new role as executive vice president of Mid-Market Industry Insights in 2013.
- 2. UNLOCKING THE SWEET SMELL OF SUCCESS Larry Levin EVP, Industry Insights April 28, 2015
- 3. 7 Reasons New Items Fail
- 5. “3 of 4 Start-ups Fail and 90% Never Earn Their “Projected Return” Source: Elevation Forum Insights
- 6. Types of Innovation BIG I “Doing the Work” “Challenge Norms” Little I
- 7. Is a Peanut Butter Pop-Tart an Innovation?
- 10. “Is Your Team Open for Review?”
- 11. Forecast No reality Blocked by retailers Don’t spend; don’t know Underwhelming acceptance You got scooped!
- 12. Assortment Underserved shoppers No reinvention Competition delivers differentiation
- 13. Incremental Me-too Starves imagination to motivate
- 14. Languish No disruption Literally “spoils” on the shelf Inconsequential, Nothing new Nothing special, replaceable
- 15. Unclear No differentiating point Lacks simplicity Prove it will “make my life better”
- 16. Retreads Been there/done that! Same product/so what? It’s the same product, but it’s not!
- 17. Elusive Out of site; out of mind! No distribution; no motivation Doesn’t serve multiple needs
- 18. MANUFACTURERS & RETAILERS ARE BALANCING EMERGING TRENDS ACROSS THE COUNTRY & ACROSS THE AISLES SEARCH FOR VALUE
- 19. MANUFACTURERS & RETAILERS ARE BALANCING EMERGING TRENDS ACROSS THE COUNTRY & ACROSS THE AISLES CHANNEL SHIFTING GROCERY
- 20. MANUFACTURERS & RETAILERS ARE BALANCING EMERGING TRENDS ACROSS THE COUNTRY & ACROSS THE AISLES CHANNEL SHIFTING GROCERY VALUE
- 21. MANUFACTURERS & RETAILERS ARE BALANCING EMERGING TRENDS ACROSS THE COUNTRY & ACROSS THE AISLES SHOPPER- CENTRIC TARGETING & ACTIVATION
- 23. Will…
- 24. You…
- 25. Still…
- 28. 28 New Product Innovations Are Only A Quarter Of New Launches, But More Than A Third Of Revenue
- 29. 29 Research has helped find the failures before they’re disasters Even products that test well can fail In Concept it may sound great, but the product doesn’t deliver The product is great and is not well positioned Understand how long you can own a niche in the market Don’t Drive Blindly: Test Your Ideas To Verify Their Stickiness!
- 30. From concept to reality! Category review; what’s worked & why Concept developed and refinement First stage forecasting Product testing & concept/product fit Forecasting refinement In-market testing Final forecast
- 31. From the launch forward! Plan evaluation Source of Volume New Trier Interviews Media evaluation Pricing & merchandising refinement Planning for year two SKU rationalization Media & Merchandising Planning
- 32. The appetite for new products remains strong… 80% Of self-proclaimed early adopters want to try new products because they Love them and want to tell the world
- 33. NEW PRODUCT LAUNCHES: DAUNTING AT BEST ROUGHLY 1 MILLION UPCs
- 34. NEW PRODUCT LAUNCHES: DAUNTING AT BEST ROUGHLY 1 MILLION UPCs 300,000 NEW UPCs
- 35. NEW PRODUCT LAUNCHES: DAUNTING AT BEST ROUGHLY 1 MILLION UPCs 300,000 NEW UPCs NEARLY 1,900 BRAND NEW PRODUCTS
- 36. NEW PRODUCT LAUNCHES: DAUNTING AT BEST ROUGHLY 1 MILLION UPCs 300,000 NEW UPCs NEARLY 1,900 BRAND NEW PRODUCTS LESS THAN 500 HIT $10 MILLION
- 37. NEW PRODUCT LAUNCHES: DAUNTING AT BEST ROUGHLY 1 MILLION UPCs 300,000 NEW UPCs NEARLY 1,900 BRAND NEW PRODUCTS LESS THAN 500 HIT $10 MILLION 7 SCORE MORE THAN $100 MILLION
- 38. New CPG Product Launch by Sector 53%47% Non-Food Food & Beverage Innovation is slowing % Change in # of New CPG Product Introductions Brand Level 3.0% 2012 2013 2014 -4.2% -4.6%
- 39. 39 INNOVATION THAT WORKS DELIVERS ON 3 KEY TRENDS SIMPLICITY WELLNESS INNOVATION THAT WORKS DELIVERS ON 3 KEY TRENDS EXPLORATION
- 40. SIMPLICITY MAKES LIFE MORE MANAGABLE MAKE IT FAST MAKE IT EASY DON’T MAKE ME SLOW DOWN!
- 41. EXCITEMENT MAKES LIFE MORE FUN & TAKES ME AWAY! BRING ME THE UNEXPECTED STIMULATE …OR SOOTH MY SENSES LET ME CUSTOMIZE IT
- 42. WELLNESS PROMOTES LIFE TO THE FULLEST RAISE THE BAR ON WELLNESS MAKE IT LAST INTRODUCE NEW WAYS TO BE HEALTHY
- 43. $35.6 $33.3 $30.0 $33.6 Food & Beverage Non-Food Average Year One Sales New Product Pacesetters 2014 ($M) Brand extensions are most prevalent Extension Net New New Brands vs. Brand Extensions % New Product Pacesetters Food & Beverage, Non-Food Combined
- 44. Innovators big & small are making a mark Nature’s Pillows, Inc. NACP
- 45. 37% 37% 41% 38% 8% 14% 6% 6% 5% 3% 4% 4% 1 2 $100> Million $80-$99 Million $60-$79 Million $40-$59 Million $20-$39 Million <$20 Million 2013 2014 Realistic Year One Expectations are Critical NEW PRODUCT PACESETTER YEAR-ONE SALES
- 46. Powerful launches are hitting it big DESPITE MARKET CHALLENGES F&B Non-F&B On average, this year’s NPPs earned $34.4 M in year one F&B earned higher year one than non-F&B during the past few years
- 47. Average Number of Benefits/Year (2009-2014) Food & Beverage Non-Food 2009 20092014 2014 +32% +45% CPGs ARE responding to consumer demands… …AND THE BENEFITS ARE EXPLODING
- 48. New or Extended Brand, or Existing Brand in a New Category 30% Distribution Starts the Clock on Year 1 Top 100 Brand Launches in Food & Beverage and Non-Food New Products that Completed their First Year in Calendar Year 2014 secrets to accelerating along the path to growth IRI’S NEW PRODUCT PACESETTERS REVEAL GROWTH CRITERIA extended
- 49. xxx $143.2 xxx $128.6 xxx $120.9 xxx $76.4 xxx $75.1 xxx $69.4 xxx $90.2 xxx $86.5 xxx $83.2 xxx $82.9 Food & beverage: excite and enliven
- 51. +5.4% +8.4% +5.1% +5.5% High innovation sectors are SEEING strong growth Food Sector Growth: +4.7% +10.2% +9.0% Beverage Sector Growth: +4.1%
- 52. HEALTHY IS A 360 $4.6 BILLION
- 53. BOOSTNUTRITIONAL VALUE & TRIM BACK LESS DESIRABLE ATTRIBUTESACROSS FOOD AND BEVERAGE AISLES Fiber/Multi-Grain Natural/Organic Real Fruit/ Benefits Vitamins/Calcium Real Vegetables/ Benefits 42% 39% 36% 22% 14% % Pacesetters Offering More
- 54. BOOSTNUTRITIONAL VALUE & TRIM BACK LESS DESIRABLE ATTRIBUTESACROSS FOOD AND BEVERAGE AISLES Sugar/Calories Fat Smart Snack/Portion Weight Management Ingredients 57% 23% 23% 11% 7% % Pacesetters Offering Less
- 55. IT’S NOT GREEK TO ME… IT’S GREEK EVERYWHERE !
- 56. WILL YOU STILL LOVE ME TOMORROW? PROTECT THE 2ND YEAR
- 57. BEING A PACESETTER DOESN’T INSURE LONG TERM SUCCESS…
- 58. 76% Decreased Media in Year 2 4% New Products Achieve $20MM in US Food and Maintain ACV in Year 2 71% Sales Increased 29% Sales Decreased 24% Maint/Increased Media in Year 2 36% Sales Increased 64% Sales Decreased Support in Year Two Drives Disproportionate Success, while unsupported products truly had trouble finding their way Maintained ACV: Year 2 ACV +/- 10% Year 1 ACV Maintained Media: Year 2 media spend was greater than -5% Year 1 media spend
- 59. of top 2013 NPP brands experienced year 2 sales GROWTH Year 2 growth is doable, but requires work
- 60. 25% of top 2013 NPPs did not hit $100M until year 2 xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx
- 61. WINNING IN THE FUTURE: SHOPPER TARGETING IS MORE CRITICAL THAN EVER
- 62. WINNING IN THE FUTURE: NICHE INNOVATION TO DRIVE PRODUCT DEVELOPMENT
- 63. WINNING IN THE FUTURE: FOLLOWING THE CONTINUED “GREEK CRUSADE” FOR ALL THINGS GREEK
- 64. WINNING IN THE FUTURE: SUCCESSFUL INNOVATION IS DAUNTING LONGER TERM SUPPORT IS A MUST FOR SUCCESS
- 65. WINNING IN THE FUTURE: DRIVING TOWARD VALUE CHANNELS THAT STRETCH DOLLARS AND DELIVER QUALITY
- 66. THANK YOU
- 67. Coming up next LARRY LEVIN New Product Pacesetters: Driving Lasting Disruptive Innovation Engaging Strategic Thinking When Navigating Trends larry.levin@iriworldwide.com 818-450-7614