Post on 05-Aug-2020
Joan Driggs and Larry Levin
June 2020
INNOVATION BEFORE THE “NEW NORMAL”
2019 New Product Pacesetters
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2
JOAN DRIGGS
Vice President
Thought Leadership
LARRY LEVIN
EVP, Market and
Shopper Intelligence
Today’s Presenters
New Product Pacesetters is developed with tremendous input from IRI colleagues:
Ryan Stredney, Senior PR Analyst, Marketing and Claudia Burgos, Client Insights
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Today’s Discussion
1 – 25th Anniversary Pacesetters
2 – Big is Back
3 – From Specialty to Mass
4 – Telling the Story
5 – Who is Buying What, and Why
6 – Strategy Success
7 – Pacesetter Scorecard
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4
25th Anniversary New
Product Pacesetters
• 25 years of IRI tracking new
product innovation
• Identifying the successes of today
(New Product Pacesetters) and
tomorrow (Rising Stars)
• Future insights based on historical data
to invent and reinvent categories
• Ultimate benchmark in successful
innovation
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5
New Product Pacesetters Criteria
New or Extended BrandExisting Brand
in a New Category
30% Distribution
Starts the Clock on Year-1
30%+ Distribution
at Year-1 Completion
Top 100 Brand Launches
in F&B and Non-Food
New Products
that Completed Their
First Year in 2019
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Big is Back:
Blockbuster
Rebound
in 2019
The Impact of
$100MM+ Launches is
Clearly Accentuated in
2019’s Dollar Share 23%
58%
22%
25%
14%
9%
8%
4%
33%
5%
$100+
$60-$100
$40-$60
$20-$40
<$20
33%
66%
24%
20%
15%
7%
17%
5%11%
2%
% of Pacesetter Dollars
% of Pacesetter Products
% of Pacesetter Dollars
% of Pacesetter Products
2018 2019
Note: Numbers may not add to 100% due to rounding. Source: IRI Market Advantage™
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$100 Million+ Blockbusters Are a Small Percentage of
New Product Launches, But They Make a Huge Impact
c
Ten Products in Multi-Outlet Channels Achieved Sales of $100MM+; Eight Products
Achieved Blockbuster Status, Marking a Major Shift Among Pacesetters
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Medium-Sized Companies are Caught in the Middle
Innovation From Big and Small Companies Puts Pressure On Medium Companies
to Get the Distribution Just Right – Everywhere Isn’t Always The Answer
31% 28% 26% 26%19% 20% 19%
24%
46%
35% 38%44%
35% 31%30% 23%
23%
38% 37%29%
34% 28% 37%30%
12% 15% 14%23%
% of Total Count
52%62% 60%
49%
36%43% 46%
52%
34%
26% 26%41%
49% 30% 27%22%
14% 12% 13% 10%11%
16% 19% 19%
4% 8% 8% 7%
% of Total Dollars
Source: 2019 New Product Pacesetters
Big Companies >$5.5B Medium Companies $1B - $5.5B Small Companies $100M- <$1B Extra Small Companies <$100M
2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019
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The Road from Specialty to Mass:
Leverage Specialty Brands for Mass Appeal
Critical to Maintain Unique, Targeted Appeal; Focus on
Appropriate Distribution, Appropriate Merchandising
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Three 2019 New Product Pacesetters Boast the “Shark Tank” Effect,
Gaining the Support Needed to Thrive in a Broad Marketplace
Shark Tank Effect: Solid Products
Bolstered by Endorsement,
Expanded Distribution
53% of 2019 Pacesetters→ small companies
Innovation + flexibility= strong likelihood
of success
Shark Tank mentality requires a niche product
to have broad recognition
Niche innovation can translate to large $$$
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Telling the Story: Big Brands Tend
to Have Big Marketing Budgets
Traditional brand marketing is not always the right
approach. Social media platforms play a HUGE
role, garnering uncalculated exposure.
Media Spend Source: Kantar Media
Instagram Followers
1.2MMGatorade
#fans #influencers
~25%of sales dollars are
often spent on
advertising to
support significant
brand launches
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Media Spend Source: Kantar Media
New Brand: No Budget. Bang Energy
Traditional
brand
marketing is
not always
the right
approach.
Social media
platforms
play a
HUGE role,
garnering
uncalculated
exposure.
Followers
1.5MM
#1 F&B Pacesetter
with Only ~$2K on
Traditional Media
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Who is Buying What, and Why
• IRI EconoLink segmentation buckets six groups of
consumers to explain:
– Mindset
– Behaviors
– Economic perspectives
• Invaluable tool to understand how economic outlook
impacts consumer behavior toward new products
Not a New Concept: Build the Right Product,
Give it the Right Attributes, Put it in the Right
Place, Get it to the Right Consumer
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EconoLink® Segmentation Spectrum
EconoLink Identifies Which Shoppers Are Gravitating to Products,
Attributes, But Now There’s a New Lens: COVID-19
DowntroddenCautious &
WorriedStart-Ups Optimistics
Savvy
ShoppersCarefree
MINDSET = CAUTIOUS / NEGATIVE
Economically Fragile & Cautious & Negative
MINDSET = POSITIVE / OPTIMISTIC
Economically Stable & Positive
9% 23% 10% 30% 13% 15%
Source: 2019 IRI EconoLink Segments
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\
EconoLink is Based on Personal Financial Situations, Attitudes
About Economic Conditions and Shopping, and Known Behavior
INFO SEARCH
PRODUCT USAGE
BRAND CHOICE
TRIP PREPARATION
STORE SELECTION
IN-STORE INFLUENCES
Views on
Economy
& Gas
prices
Demos
Financial
Situation &
Outlook
Attitudes
toward
Shopping &
Lifestyle
Purchase:
Channel,
Aisle &
Deals
SE
GM
EN
TA
TIO
N IN
PU
TS
Note: Distributions may shift slightly due to static, timing and type of analysis being run
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 16
Consumer Survey: Gauging Consumer
Enthusiasm for New Products
Combining New Product Pacesetter
consumer survey results with
EconoLink segmentation, we
gauge new product enthusiasm.
The connection between new product
adoption and economics is IMPORTANT
Results point to a powerful consumer
group: Avid Early Adopters
Source: IRI 2020 New Products Survey
Consumer New Product Survey
7%
17%
76%
8%
17%
75%
Avid Early Adopters New Product Enthusiasts Laggard
2019
2020
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Who are Avid Early Adopters
and Why are They Important?
• Mid-40s
• Kids at home
• Moderate income levels
• Willing to take some risks
• Small, but mighty → only 8% of
population, but highly committed
to new products
• One in 12 U.S. consumers see
themselves as Avid Early
Adopters
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Not all Early Adopters Share
Economic Outlook
Critical to know where and how to focus
as the commitment to new products is
shared among Early Adopters, but not
the economic confidence
Understanding the distinctive economic
mindsets and underlying financial
conditions that drive early adoption
behavior is critical for product
innovation decision-making
Source: 2019 New Product Pacesetters
9% 11% 8% 9%
22%12% 18%
24%
10%
14%14%
8%
27% 31%31% 25%
18% 13%13% 19%
15%19% 16% 14%
Total Respondents
2020
Avid Early Adopter
New Product Enthusiast
Laggard
Downtrodden Cautious and WorriedStart-Ups OptimisticsCarefree Savvy Shoppers
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 19
Strategy Success Stories
ENFAMIL NEUROPRO
#2 Food & Beverage Pacesetter
• $230M+ in MULO
• Imitates mother’s milk more closely than any product
• Huge market potential: parents
• Revolutionary nutrition advancement in R&D
SCHMIDT’S
Niche Brand, Big Reach
• 2018 acquired by Unilever
• Grabbed mass distribution; $26M+ in MULO
• Established brand and grew
• Lifestyle brand for consumers with strong commitment to natural
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Consumers Have an Appetite for Healthy Attributes
3 of Top 10 and 25 of
Top 100 F&B Pacesetters
→ non-GMO benefits
2 of Top 10 and 25 of
Top 100 Non-Food Pacesetters
→ Natural / Simple Ingredients
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 21
2 3
9 10
BangVital Pharma
$299.4 M
ENERGY DRINKS
Arnold/Brownberry/Oroweat
Sandwich Thins
Grupo Bimbo
$103.2 M
FRESH BREAD & ROLLS
BublyPepsiCo
$116.3 M
SPARKLING WATER
G ZeroPepsiCo
$154.4 M
SPORTS DRINKS
Enfamil NeuroProReckitt Benckiser
$230.5 M
BABY FORMULA
Corona PremierConstellation
Brands
$101.8 M
BEER
Cheez-It Snap’d
Kellogg’s
$88.7 M
SALTY SNACKS
SlimFast KetoGlanbia
$76.2 M
SNACK BARS & WEIGHT CONTROL
Pop-Tarts BitesKellogg’s
$68.3 M
TOASTER PASTRIESFROZEN PROCESSED POULTRY
Perdue Simply Smart
OrganicsPerdue Farms
$70.7 M
Top 10 Pacesetters
4 5
6 7 8
1
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4 521
6 7 8 9
3Colgate
Total SFColgate Palmolive
$243.1 M
TOOTHPASTE
Blue BuffaloGeneral Mills
$313.3 M
PET FOOD TOILET TISSUE
Scott ComfortPlus
Kimberly-Clark
$241.6 M
SHAVING & PERSONAL CARE
Harry’sHarry’s
$169.8 M
DIAPERS & BABY WIPES
Pampers Pure
CollectionProcter & Gamble
$72.4 M
6 7 8 9 10
TOOTHPASTE & MOUTHWASH COFFEE MAKER CAT LITTER EYE CARE EXTERNAL ANALGESIC RUBS
Crest Gum CollectionProcter & Gamble
$62.1 M
Keurig K-Select
JAB Holding
Company
$55.0 M
Fresh Step Clean Paws
The Clorox
Company
$48.8 M
LUMIFYBausch +
Lomb
$48.2 M
Theraworx Relief
Avadim Health
$47.1 M
Top 10 Pacesetters
10
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23
Top 10 Pacesetters
6 7 8 9 10
CIGARETTES
MarlboroIceAltria
$189.0 M
5
ELECTRONIC SMOKING DEVICES
Vuse AltoBritish
American Tobacco
$225.6 M
4
HARD SELTZER
White Claw
Mark Anthony
Group
$344.8 M
3JUULJuul Labs
$2,354.6 M
ELECTRONIC SMOKING DEVICES
1Bang
Vital Pharma
$723.6 M
ENERGY DRINKS
2
6 7 8 9 10
ENERGY DRINKS ELECTRONIC SMOKING DEVICES SPORTS DRINKS ELECTRONIC SMOKING DEVICES CANNED JUICES
Red Bull Coconut
Red Bull
North America
$141.3 M
Vuse CiroBritish
American Tobacco
$136.7 M
G ZeroPepsiCo
$136.5 M
MybluImperial
Brands
$91.2 M
Mtn Dew Amp Game Fuel
PepsiCo
$86.3 M
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 24
Rising Stars
What will happen to them?
• Rising Stars on path to Pacesetters, but… COVID-19
• Major market disruption
• However, they reflect lasting trends:
– Treating pets like family
– Indulgence
– Energy to get through rigors of daily life
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2020 New Product Pacesetters
Food & Beverage Rising Stars
Energy Drinks Are Powering Their Way to Pacesetter Status
Monster Energy
Ultra Paradise
Monster BeverageEnergy Drinks
My/Mo
Mochi Ice Cream
CompanyFrozen Novelties
Planet Oat
HP HoodMilk
Red Bull Peach
Edition
Red Bull North
AmericaEnergy Drinks
Smithfield Prime
Fresh Delicatessen
Smithfield FoodsLuncheon Meats
Ruffles Double
Crunch
PepsiCoSalty Snacks
Spindrift
Spindrift
Beverage Co.Sparkling Water
Talenti Gelato
Layers
UnileverIce Cream
7 Wonderful No Shells
Flavored Pistachios
The Wonderful
CompanySnack Nuts
Reign
Monster BeverageEnergy Drinks
LISTED ALPHABETICALLY
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2020 New Product Pacesetters
Non-Food Rising Stars
Pet Products Are Well Poised for Pacesetter Status
Greenies L’Oréal Infallible
Fresh Wear
Mr. Clean
Clean Freak
Procter & GambleHousehold Cleaner
Native
Procter & GambleDeodorant & Personal
Care
Sensodyne Pronamel
Intensive Enamel
Repair
GlaxoSmithKlineToothpaste
Pampers Cruisers
360° Fit
Procter & GambleDiapers
Swiffer Pet
Procter & GambleCleaning Tools
Tidy Cats
Free & Clean
NestléCat Litter
7 Viva Multi-Surface
Cloth
Kimberly-ClarkPaper Towels
Mars
Pet Treats L’Oréal
Facial Cosmetics
Neuriva
Reckitt BenckiserVitamins
LISTED ALPHABETICALLY
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27
COVID-19 Will Impact Future
New Product Pacesetters
What will hit the New Product Pacesetters
mark in 2020 and beyond?
• Historical Precedent from Past Recessions
• Current Momentum
– Sustainability
– Natural
– Health and Wellness
– Indulgence
• Guide Future Innovation
– Personal Health and Safety
– Economic Considerations
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With a Recessionary Response Fueling “Value
for the Money” Creating Better-Life Experiences
Top New Product Pacesetters
delivered IN-HOME PROFESSIONAL
QUALITY at premium prices.
Source: IRI New Product Pacesetters Archived Reports.
An array of at-home DIY SERVICES
including nail care, dental care and skin
care products were an AFFORDABLE
TRADE-OFF to professional services.
Premiumization was a
Key Winner in 2008-2010,
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 29
Multi-serving products helped consumers see VALUE FOR THE MONEY, but often delivered
a MORE PREMIUM PRODUCT, including Bertolli’s Oven Bake Meals and Stouffer’s Easy
Express. Technology supported advancements in microwaveable fare. Plant-based
dairy alternatives and a new wave of enhanced beverages also emerged.
Multi-Serving Products Were Not Only Focused on Price Value; Many
Were Led by New Technology to Create a More Premium Experience
Source: IRI New Product Pacesetters Archived Reports.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 30
Dual-Focused Benefits Also Delivered Enhanced Value to U.S. Consumers
CO-BRANDED, MULTI-BENEFIT
PRODUCTS were embraced by
consumers looking to consolidate
purchases during the recession.
DUAL-FUNCTION PRODUCTS
were, and continue to be an
important innovation platform to
fuel consumers’ need for SPEED
AND EFFICIENCY.
Source: IRI New Product Pacesetters Archived Reports.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 31
What Innovation Can Look Like in 2020 and Beyond
Private Label
High quality private brands are an important innovation platform as retailers enhance their
commitment to shoppers.
Emerging categories include plant-based meats and dairy alternatives, as
well as CBD products.
Pack Size Innovation
Package innovation can be just as important in a recession as brand new products. Estimate the demand for multi-pack, multi-serving or larger
sizes as a way to answer consumer demand. Beer and cereal are just two
examples of recent large pack innovation shifts
that feed a need to “pantry stock.”
Brand Expandability
Leverage brand equity to expand into adjacent
categories and make the most of growth pockets.
Alcohol has been identified as a category
ripe for innovation. Traditional spirit brands can adapt to at-home cocktail machines a la Keurig Drinkworks, or
develop branded frozen slushy concoctions.
More is More
Multi-serve food products satisfied a financial need with high quality food and
indulgent products. Products trending now include multi-serving
premium chocolates and non-chocolate candy.
Multi-function laundry and home care with sanitizing properties and perceived convenience will become increasingly important in
the coming months.
Premiumization
The Great Recession saw a new product evolution that brought professional services home, including
restaurant-branded frozen entrées and
teeth whitening.
For the current recession, premiumization will take the form of restaurant-quality meals for home
consumption and personalized DIY kits for services including
hair treatments, nail care and color.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 32
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