With seismic shifts in consumer priorities and changing sales channels, pressure for food, beverage, and supplements companies to innovate is at an all-time high.
A 2020 KPMG survey found that consumers want eco-friendly packaging, more premium options, and functional food and beverages.
While executives in the supplements market have long been immersed in a shelf-space war, pressuring them to bring new products to market faster. With disruptive trends such as millennial demands for transparency and the entrance of Amazon into supplements manufacturing, it’s become more critical for companies to stand out.
For many food and beverage manufacturers, more than half of their revenue stems from products they rolled out within the last five years, according to Food Processing.
Legacy brands face a tough road, as consumers eschew brand loyalty in favor of smaller manufacturers. According to market research firm IRI, roughly “$20 billion in industry sales have shifted away from large companies to smaller players since 2013.”
Top Food and Beverage Launches
A look at 2019’s top food and beverage product launches reveals how smaller manufacturers have become bigger players: For the first time since IRI started tracking the size of the companies launching New Product Pacesetters (NPP), the. company reports that more than half of Pacesetter companies have sales of less than $1 billion.
IRI’s latest Pacesetters include:
KinderJoy: $124.4 million in first-year sales.
M&M’s Caramel: $120.6 million.
Oui by Yoplait: $100.5 million.
Gatorade Flow: $78.1 million.
RXBar: $73.9 million.
Trending Supplement Products
The younger dietary supplement market continues to enjoy explosive growth, and analysts don’t expect a slowdown anytime soon. Experts estimate the global supplements market will enjoy a CAGR of nearly 7% over the next five years.
According to ConsumerLab.com, the top-selling supplements in 2020 include:
Market Pressure Drives Innovation
Food, beverage, and supplements companies face growing pressure to innovate, especially since retailers are increasingly launching their private label brands.
Additionally, the traditional retail models have been shattered, with explosive growth in online sales, the emergence of delivery and curbside pickup options, and even meal kit services.
Finally, the growing millennial market is not only more open to new products; they’re clamoring for them. And it’s not just what they eat, but how they eat it, with snacks driving more sales than ever before.
A McKinsey study examined new product launches and how many remained on the market. The findings were startling:
Large companies: Three out of four new products didn’t survive the first four years. That’s an anemic 25% survival rate.
Small companies: Despite more agile operations, their new product launches didn’t fare any better, with only 25% of their products lasting longer than four years as well.
Not only are companies failing 75% of the time when bringing new products to market, but they’re also failing slowly. So how can businesses solve this problem and compensate for such low success rates? It’s simple. The answer lies in speeding up the NPD process to increase the number of product launch attempts. By failing faster, companies can beat the competition and enjoy a higher rate of success. Real transformation requires increased efficiency and speed at every stage of the product development process.
With the launch of Formula Management, the TraceGains Networked Product Development Suite is now complete. The combined solution allows teams to go from manual processes to automated results by digitizing and streamlining new product development for better, faster innovation. Networked means companies no longer have to chase down suppliers for documentation because it’s already available.
Join us for a webinar on March 25, where TraceGains CEO Gary Nowacki and Sales Engineer Ruben Galbraith share how Networked Product Development drives collaboration, innovation, and faster time to market. Register for this complimentary webinar here.