PART 6 - INNOVATION LESSONS FROM THE GREAT RECESSION TO APPLY TODAY - Special COVID-19 Series: Recession-Proof Your Business - IRi
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Special COVID-19 Series: Recession-Proof Your Business PART 6 – INNOVATION LESSONS FROM THE GREAT RECESSION TO APPLY TODAY June 12, 2020
The Latest Recession-Focused Reports from IRI (click to see full report)
CLICK HERE TO ACCESS
THE 2019 NEW PRODUCT
PACESETTERS REPORT
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 2
Context Executive Summary
Every recession varies in
scope and duration, but LESSONS FROM EMERGING TRENDS
COVID-19 is ushering in unique THE GREAT RECESSION IN THE 2020 RECESSION
behavioral changes, including • Sales of the Top 10 food and beverage • Big companies continue to be well-positioned
heightened awareness of products during the Great Recession were for innovation.
personal health and safety. lower than pre-recession levels as • In-home professional services will be a key opportunity
The impact of these changes consumers stuck with tried and true as consumers shift from salon-style services, restaurant
will be best reflected in CPG products and hunted for value. going or medical and dental practices due to health and
innovation that meets changing • Particularly in non-food categories, financial stress; however, bifurcated income means many
Pacesetter products promoted multi- are willing to pay a premium.
consumer needs and wants. functional benefits and co-branding. • Given channel shifts (e.g., greater adoption of e-
IRI has been tracking New • Among a few products, continued focus on commerce, value and grocery), as well as new shopping
Product Pacesetters* for 25 brand building with well-timed advertising behaviors (e.g., shoppers spending less time in stores),
and promotions drove year-2 sales to further manufacturers should follow five principles:
years. Even top-selling products propel brand health. − Focus on attributes that really matter
need continued marketing • Successful Pacesetters products focused on: − Develop clear and more impactful positioning
support and innovation to sustain − Premiumization − Define and execute against the RIGHT distribution
long-term contributions to − More value by focused occasions − Promote in Year 1 and beyond
− Brand extendibility − Set realistic sales expectations
manufacturer and retailer growth. • Trusted brand status, endorsements and price
− Package size innovation
This report features learnings − Private label expansion promotions are vital for building awareness of products.
from 2008-2010 New Product
Pacesetters and offers strategies
on how to approach innovation as • The IRI COVID-19 Impacts
HOW CAN Innovation Requires Sophisticated
we emerge from the pandemic. Strategies: IRI New Product Pacesetters, • The COVID-19 Dashboard
IRI HELP? Brand Optimization Engine, Brand
• IRI CPG Demand Index™
Landscape, Assortment Optimization • IRI Inflation Tracker™
*Criteria for New Product Pacesetters and data used for this report can be found in the Appendix
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 3
Innovation During the Great Recession
• Sales of the Top 10 Pacesetters during the 2008-2010 recession were
cumulatively lower than pre-recession levels.
• Smaller manufacturers had fewer products in the New Product Pacesetter
ranks, but were more successful than large and medium manufacturers.
− PepsiCo, General Mills, and Kraft were the top 3 manufacturers with the
greatest total food and beverage New Product Pacesetter sales in 2008-
2010. However, the incrementality and sustainability rate for
Pacesetters among the largest innovators was lower than average.
− Procter & Gamble, Johnson & Johnson and L’Oréal were the top 3 non-
food manufacturers with the greatest total Pacesetter sales 2008-2010.
− Popular, high-penetration categories exhibited a lower incrementality
rate with innovation, while high-growth categories (e.g., energy drinks,
yogurt, snacks nuts/seeds/corn nuts) had more success.
• High-growth food categories included energy drinks, yogurt, and snack nuts
/ seeds / corn nuts. Among non-food departments, Beauty and Health
were the highest innovating departments.
• Themes that emerged during the recession included professional quality
for at-home use, premium pet products, multi-serving, multifunctional,
and on-the-go consumption.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 4
Recessions Prove Challenging for Innovation: Shoppers in a Recession are
More Inclined to Plan Purchases Pre-Shop; Discretionary Spending Curbed
Purchase Decisions During the Great Recession: % of Shoppers, 2007-2009
Before
Entering
Store 60%
75%
83%
In-Store
40%
25% 17%
2007 2008 2009
Longitudinal Economic Study, IRI AttitudeLink, n=1,000+ shoppers 10/2009: Zero-Moment of Truth: Redefining the
Consumer Decision-Making Process. IRI Consulting Analysis / IRI Consumer Survey, Top 2 box 8/2008 / 9/2008
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 5
Cumulative Sales of the Top F&B New Product Pacesetters Were Down
During the Great Recession; Median Sales Did Not Vary Dramatically
New Product Pacesetter Sales in $B
$5.0 Total F&B Pacesetters Top-10 Pacesetters Median Launch $25.0
$4.1
Pacesetters in $M
Median Year One
$4.0 $3.5 $19.3 $19.9 $20.0
$17.5 $18.9
$2.8 $15.8 $2.7 $16.7
$3.0 $2.4 $2.3 $15.0
$2.0 $1.3 $10.0
$0.7 $0.8 $0.8 $1.0
$1.0 $0.6 $5.0
$- $-
2006 2007 2008 2009 2010 2011
$4.0 $3.2 $20.0
Pacesetters in $M
Median Year One
$2.7 $2.7 $15.7 $17.1
$3.0 $15.3 $2.4 $15.4 $2.5 $15.0
$13.9 $2.1 $13.3
$2.0 $10.0
$0.8 $0.9 $1.0 $0.9
$1.0 $0.6 $0.7 $5.0
$- $-
2006 2007 2008 2009 2010 2011
Total Non-Food Pacesetters Top-10 Pacesetters Median Launch
*CLICK HERE TO ACCESS THE 2019 NEW PRODUCT PACESETTERS REPORT
Source: IRI 2019 New Product Pacesetters Analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 6
Focus of Successful New Product Pacesetters 2008-2010
Premiumization – consumers were willing to spend more on DIY
services, small indulgences and higher quality entrées, often as a
tradeoff for not dining out or scaling back on coffeehouse purchases.
While “Value” Multi-Serving Products – Technology played a role in
Was a Key upgrading the quality of microwaveable products but
consumers were also drawn to products that delivered more.
Product Attribute Multi-Function Products – The power of two brands came together
During the Great to win over consumers drawn to known brands that could deliver
multiple benefits, delivering both time and money savings.
Recession, it Expansion into Adjacent Categories – Several brands, including
Didn’t Mean Kellogg’s Special K, Dove, Gatorade, Starbucks and Crest, successfully
pushed into adjacent categories to tap into pockets of growth.
“Cheap”
Private Label Expansion – During the Great Recession, retailers
invested in tiers of private label products, delivering value and often
innovation that was unique to their store banners.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 7
Premiumization was a With a Recessionary Response Fueling “Value
Key Winner in 2008-2010 for the Money” Creating Better-Life Experiences
Top New Product Pacesetters
delivered IN-HOME PROFESSIONAL
QUALITY at premium prices.
An array of at-home DIY SERVICES
including nail care, dental care and skin
care products were an AFFORDABLE
TRADE-OFF to professional services.
Source: IRI New Product Pacesetters Archived Reports.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 8
Multi-Serving Products Were Not Only Focused on Price Value; Many
Were Led by New Technology to Create a More Premium Experience
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.
Source: IRI New Product Pacesetters Archived Reports.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 9
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. 10Pre-Recession and Post-Recession Innovation
Illustrates Changing Consumer Preferences
Pre-Recession Post-Recession
Pro-quality, use of Post-recession saw the
technology and better continued impact of
for you lead 2006-2007 K-cups, on-the-go
Pacesetters. consumption and BFY.
Non-food began to see Trends continue,
the conversion from RX especially in Rx to OTC
to OTC to drive broader and pet foods begin to
adoption. Technology win with natural
and positioning allow Fusion positioning benefits.
to shave the competition.
Source: IRI New Product Pacesetters Archived Reports.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 11Small Manufacturers with Fewer New Product Pacesetters Had
More Incremental Sales Than Large and Medium Manufacturers
Innovation Performance by Manufacturer Size, 2008-2010 New Product Pacesetters
FOOD & BEVERAGE NON-FOOD
Number of Number Of
Pacesetters Incremental Pacesetters Incremental
Number of with Incr. Total Sales ($M) Number of With Incr. Total Sales ($M)
Pacesetters Share Gain Pacesetters % of Total Pacesetters - Share Gain Pacesetters % of Total
Manufacturer Average per (% of Total Launch Year Pacesetters Average per (% of Total Launch Year Pacesetters
Size Manufacturer Pacesetters Sales ($ M) Sales Manufacturer Pacesetters Sales ($ M) Sales
Large
152 67 1,536 234 111 $2,536
(>$5 billion) $4,154 $5,342
(21.7) (44%) (37%) (10.2) (47%) (47%)
N=7
Medium
85 46 1,580 111 $283
($1-5 billion) $2,801 38 (3.8) $659
(4.0) (54%) (56%) (47%) (43%)
N = 21
Small
52 37 919 24 $336
(The Largest Food & Beverage Innovators Succeeded with a Few
Products, But High-Penetration, Slow-Growth Categories Struggled
Innovation Performance for Top 10 Largest Innovators / 2008-2010 Pacesetters
Manufacturer Sources of Incremental Share Gain, Incremental Sales Gain and Sustainable Sales Areas of Challenge
Quaker Mini Delights and Lay's Cracker Crisps gained share. Meanwhile, despite failing to grow In line with the industry average, 4 of 5 CSD
share, Doritos Collisions and Dewmocracy grew incremental sales. Quaker Mini Delights and New Product Pacesetters failed to grow share.
Doritos Collisions had strong sustainable sales.
Most successful launches were extensions under the Yoplait line of yogurt. 4 out of 5 gained The largest launch was in cold cereal, but the Pacesetters
incremental share, even though only 1 had sustainable sales. New granola bar products also had
failed to gain incremental share.
incremental share, but were less successful in sustaining their sales.
Thirteen new products in various categories were able to gain incremental sales and share, but only New Pacesetters in crackers and cookies failed to gain
Jell-O Fruit Passions and Crystal Light Enhanced were able to sustain sales. incremental share and sales.
Gained share and sales with 2 Powerade introductions. Coca-Cola also had successes with Simply All CSD and bottled water Pacesetters struggled to gain
Grapefruit and Simply Apple introductions and Nestea Enviga. share or incremental sales.
While Nestlé was able to gain incremental sales and share in various categories, only Nestlé Good Pacesetters in frozen dinner were less successful, with
Start Supreme Natural succeeded in sustaining sales. only 1 out of 5 managing to gain share.
Out of 24 new products, only All Bran Crackers, Kashi Pizza, and FiberPlus Bars managed to be Similar to the industry trend, Pacesetters in cold cereal
incremental and sustain sales. 5 other products in crackers and granola bar categories were also failed to gain incremental share.
incremental, but did not have sustainable sales.
Campbell’s V8 V Fusion and Pepperidge Farm (Goldfish and Deli Flats) innovations drove strong 4 Pacesetters in the soup category struggled with no
incremental sales and share gain. incremental sales or share gain.
All 9 introductions in beer/ale/alcoholic cider gained incremental sales, and 4 of those had 5 Pacesetters in the same category did not gain
incremental share and sustainable sales. Bud Light Lime drove the majority of gains. incremental share or sustainable sales.
Marie Callender’s Home Style Creations and Healthy Choice All Natural, in the shelf-stable-dinner
and frozen-dinner categories, respectively, gained incremental share and sales. 2 introductions in the 3 other Healthy Choice Pacesetters failed to contribute
incremental sales and share.
salty snacks category also achieved the same success.
Uncle Ben’s Ready Whole Grain Medley succeeded to grow share and sustainable sales. M&M’s All Pacesetters in gum and non-chocolate candy
Premium and Wrigley’s Extra Fruit Sensation, while incremental, had weak sustainable sales. categories did not gain incremental share.
Source: IRI New Product Pacesetters 2008-2010
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 13Most Small F&B Manufacturers with Greatest New Product Pacesetter Success
Were Pure-Players Focused on High-Growth Categories, Health-Oriented Products
Innovation Performance for the 10 Most Successful Small-Sized Manufacturers / 2008-2010 Pacesetters
Mfr. Number of
Size Pacesetters /
Manufacturer ($M) Incr. Sales ($M) Sources of Success
Agro Farma operates only in the high-growth greek yogurt subcategory (130% growth rate), holding 50% share of
559 1 / 146 Greek yogurt and 12% of total yogurt category with New Product Pacesetter Chobani.
Roll Global operates in 9 categories, with the high-growth snack nuts as its biggest category where it introduced
404 2 / 109 Pacesetters Wonderful Pistachios and Everybody’s Nuts.
Green Mountain released 2 products in the high-growth single-cup coffee subcategory (87% growth rate) with its new
422 2 / 77 Single Cup Coffee product and cross-branding with Newman’s Own brand with Newman’s Own Single Cup Coffee.
Most of this manufacturer’s business is in the medium-growth baked beans category, where the manufacturer launched
521 1 / 46 2009 Pacesetter Grillin’ Beans as a premium baked beans product with additional sauces and mixed-in vegetables.
Blue Diamond mainly manufactures snack nuts and also operates in 8 other nut-related categories. In 2010, it
321 1 / 41 moved into the milk substitute category with Almond Breeze which was successful due to its health benefits and
high growth (79%) in the almond milk subcategory.
Ocean Spray operates in 16 categories with shelf stable bottled juice as its main business. While the category has
849 2 / 36 high penetration and low growth, its 2 Pacesetters On the Go drink mixes and Cranergy bottled juice were
successful due to focus on health benefits and convenience.
United Foods operates almost exclusively in the low-growth frozen plain vegetables category with 8% category
154 2 / 33 share. In 2009 it released the Pictsweet Steam’ables line, which offers frozen vegetables in convenient steamer
bags and are a cheaper alternative to competitor Birds Eye’s Steamfresh Pacesetter product.
289 1 / 27 The manufacturer is well known in the margarine/butter, shortening oil and peanut butter categories on top of 10
other smaller categories. In 2010, Smart Balance introduced a Pacesetter in the milk category.
The Wine Group launched Cupcake Vineyards in the high-growth wine category, with this product mostly targeting
583 1 / 27 women.
712 1 / 21 Snyders-Lance filled the growing demand for healthy salty snacks with its Multigrain Pretzels and Crackers.
Source: IRI New Product Pacesetters 2008-2010
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 14The Largest Non-Food Innovators Succeeded With a
Few Products, But High-Penetration Categories Struggled
Innovation Performance for the Top 10 Largest Non-Food Manufacturer Innovators / 2008-2010 Pacesetters
Manufacturer Sources of Incremental Share Gain, Incremental Sales Gain and Sustainable Sales Areas of Challenge
25 new products in various categories gained incremental sales, with most gains in home care under Most introductions in hair care category under Clairol and
Tide, Mr. Clean, Swiffer and Febreze brands. Similar success in personal care and cosmetics Pantene brands, along with new products under Gillette
achieved under Cover Girl and Crest products, which also have sustainable sales. razors didn’t grow share.
Roughly a fourth of L'Oréal‘s 45 brand launches experienced growth in incremental sales. L'Oréal and Most shampoo and conditioner introductions under Garnier
Maybelline Cosmetics and Garnier Hair Coloring drove incremental gain and sustainable sales. and L'Oréal brand failed to gain incremental share.
New mouthwash & sanitary napkin products failed to gain
Out of 22 new products, 9 products were able to gain incremental sales. The most significant gains
were seen in KY lubricants, and Aveeno Active Naturals hair care products. incremental share. Zyrtec tablets had incremental share,
but weren’t sustainable.
New introductions in Unilever’s Vaseline, Tresemme, and Axe lines experienced incremental sales Other Dove lines such as Pro Age, Daily Moisture and
and share gain. New Dove lines Men Plus Care, Cream Oil and Go Fresh line all achieved Damage Theraphy weren’t as successful.
tremendous success.
All introductions in pet food under Friskies were able to gain incremental share and sales while only Purina Cat Chow, Chef Michaels, One Vibrant Maturity
some of Purina introductions such as Purina Selects and Beneful Playful were as successful. and Busy Chewnola did not gain incremental share.
Most of GSK’s Aquafresh and Sensodyne innovations were in the toothpaste category and 4 out of 5
Aquafresh ISO Active toothpaste wasn’t able to gain
innovations saw increases in incremental sales and share gain. Additionally, GSK’s weight control line, share or sustain incremental sales
Alli, experienced strong growth in incremental sales and share.
Colgate-Palmolive introduced 15 new products, but only saw gains in share and incremental sales with While able to gain incremental sales, Softsoap soap
Irish Spring Body Soap. Colgate dental had better success with sustainable sales. products struggled to gain share.
New introductions under Mitchum deodorant, Revlon
Revlon’s Beyond Natural, Colorstay Mineral and Custom Creations facial cosmetics lines, in Matte line and several other cosmetic products did not
addition to its Revlon Colorist Women’s Hair Coloring line gained incremental sales. gain incremental share.
All four new products introduced by Novartis gained share and incremental sales: Excedrin Back and Incremental share is lowest in internal analgesics
Body pain reliever, Prevacid 24hr., Alcon Contact lenses, and Zaditor Eye Care. category.
Three products in home care department (Purex fabric softener, laundry detergent and Renuzit air Personal care products (Dial and Right Guard soap and
freshener) succeeded to gain incremental sales and share. deodorants) failed to contribute incrementality.
Source: IRI New Product Pacesetters 2008-2010
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 15Most Small Non-Food Manufacturers with the Greatest
New Product Pacesetter Success Were Pure-Players
Innovation Performance for the 10 Most Successful Small-Sized Manufacturers / 2008-2010 Pacesetters
Number of
Pacesetters /
Manufacturer Incr. Sales ($M) Sources of Success
1 / $78 Watson’s Next Choice Female contraceptives, the company’s new pregnancy prevention product, generated incremental
share in the contraceptives category due to low innovation and competition in the emergency contraceptive subcategory.
4 / $52 Under the Nivea brand, Beiersdorf introduced “A Touch of” and “A Kiss of” lines in Soap and Lipcare respectively. It also
released a men’s line Nivea For Men to increase the breadth of its consumer segments which originally only had women.
Kao Corporation, which is based in Japan, mostly operates in the beauty department, particularly personal care and hair
2 / $27 care products. In US, it grew by acquiring well-known beauty companies such as Molton Brown and John Frieda, the
latter being regularly featured in the annual Pacesetter list.
1 / $24 Thin Care International focuses on weight control products, and innovations were spearheaded by its Jillian Michaels
Weight Control supplements.
Vogue International focuses on personal care and salon hair care products. It’s introduction of Organix in 2008 provided
1 / $24 shampoo, conditioner, and styling product in a variety of scents designed to be healthier for hair due to its organic
components.
2 / $21 BIC operates in stationary, lighters, and razors. The addition of its Soleil razors and cartridges in 2008 allowed the
company to rebrand its product offerings to expand its reach to women.
1 / $17 Only operating in dog food category, Ainsworth leverages its expertise in manufacturing nutritious and healthy dog food.
The pacesetter Rachel Ray Nutrish is a joint venture with famous celebrity chef Rachael Ray.
1 / $10 This Finnish company’s main business is in the disposable tableware & dinnerware categories. Its pacesetter Chinet
disposable cups are expansions to their tableware & dinnerware products.
1 / $10 Elations is a pharmaceutical company specializing in vitamins or supplements that improve joint comfort and osteoarthritis .
The new pacesetter Elations Liquid Supplements are new vitamins/supplements offered in a new liquid format.
1 / $9 Mostly known for Botox and facial products, its pacesetter product Optive lens/eye care is an addition to their growing eye
care business.
Source: IRI New Product Pacesetters 2008-2010
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 16Maintaining Media and Merchandising Spend, as Well
as Increasing Offerings Help Grow and Sustain Trial
and Repeat, Resulting in Healthy Sales
Silk Pure Almond Milk Substitute
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $16,993 $16,788
Add Cum Wghtd Weeks Any Merch 5.33 10.96
Average Items 1.9 3.3
ACV Weighted Distribution 58.3 80.9
% Trial 5.31 10.55
% of Triers Repeating - Cumulative 48.81 55.13
Dollar Sales (53.8% Growth) $61MM $132MM
Source: IRI New Product Profiler / *See Appendix for Additional Case Studies
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 17Even Start-Up Brands with Little Media Support Generated
Excitement Through Merchandising Strategies, Expanded
Distribution and New Products to Try
Chobani Yogurt
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $0 $207
Add Cum Wghtd Weeks Any Merch 4.02 8.82
Average Items 6.0 7.5
ACV Weighted Distribution 18.6 43.1
% Trial 2.88 9.69
% of Triers Repeating - Cumulative 56.90 58.75
Dollar Sales (71.3% Growth) $47MM $164MM
Source: IRI New Product Profiler / *See Appendix for Additional Case Studies
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 18© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 19
Out-Sized Innovation Bucked a Declining Trend of New Product Pacesetter Sales
New Product Pacesetter* Sales in $B
$3.5 $3.3 $25.0
Total F&B Pacesetters Top-10 Pacesetters Median Launch
Pacesetters in $M
Median Year One
$3.0
$2.4 $2.2 $19.3 $20.0
$2.5 $2.2 $14.5
$14.3 $14.3
$2.0 $15.0
$1.3
$1.5 $10.0
$0.8 $0.8 $0.8
$1.0
$5.0
$0.5
$- $-
2016 2017 2018 2019
$3.0 $2.6 $2.2 $2.7 $20.0
$16.9 $2.3
Pacesetters in $M
Median Year One
$17.7 $13.8 $13.9 $15.0
$2.0
$1.1 $1.3
$0.9 $10.0
$1.0 $0.7
$5.0
$- $-
2016 2017 2018 2019
Total Non-Food Pacesetters Top-10 Pacesetters Median Launch
*CLICK HERE TO ACCESS THE 2019 NEW PRODUCT PACESETTERS REPORT
Source: IRI 2019 New Product Pacesetters analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 20Big Manufacturers Continue Capture More of
Total New Product Pacesetters Dollar Sales
% of Total New Product % of Total New Product
Pacesetter Product Count Pacesetter Dollars
4% 8% 8% 7%
12% 15% 14%
23% 11%
16% 19% 19%
34% 28% 37%
30% 49% 22%
30% 27%
35% 31% 23%
30%
46% 52%
43%
36%
19% 20% 19% 24%
2016 2017 2018 2019 2016 2017 2018 2019
Small and Extra Small Companies together While just 24% of New Product Pacesetters, Large
account for more than half of New Product Pacesetter companies in 2019 account for 52% of total Pacesetter
products. Mid-sized companies are contributing sales dollars. Medium-sized companies represent a
fewer Pacesetters year-on-year. declining share (22%) of total Pacesetter sales dollars.
Extra Small CompaniesMid-Decade Innovation Momentum and Recent Pre-COVID-19 Focused Innovation
Customization / Experiential: indulgent,
Personalization: make it sensorial, exciting
2016
2018
your own, lifestyle products
Expectation:
Targeted Benefits: needs- results, energy,
based results, performance performance
Healthy Attributes: Simplicity: healthy,
prevention, simple convenient, natural
indulgence, living well
PRE-COVID-19 INNOVATION
MID-DECADE INNOVATION Premium: ingredients, Niche Appeal: small-
positioning, packaging company perceptions,
targeted products
Self-Care: nutrition,
protein-forward, Rx- Nutrient Boost: added
strength personal care nutrition, healthier base
ingredients
2017
2019
Indulgence: flavors,
decadent treats, textures Lifestyle: high
energy, natural
Source: IRI 2018, 2019 New Product Pacesetters Analysis.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 22During the Pandemic, Consumers are Focused on Speeding Up Their
Time In-Store, and Are Less Interested in New Product Discovery
Approach to Shopping for New Food / Beverages During Past 2 Months
Among those looking for new products, more will look less often in the coming weeks / Base = 1,400
35% 25% 24% 21%
I haven't been looking I haven't been looking I haven’t noticed I've only been looking
for new products as for new products as many new products for new products to try
much because I was much because I have offered in the store if my usual product
focused on just getting been rushing to spend was unavailable
the basics as little time in the
store as possible
New products are either totally new brands within the marketplace,
or new versions (such as flavors, formulations, etc.) of brands that already existed.
Source: IRI Survey 2020, IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers, 5/22-5/24/20.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 23New Products Still Make the Basket, but More Consumers Report
They’ll Look Less Than Those Who Will Search More for New Products
Plans to Look for New Food / Beverages in the Next 4 Weeks
Among those looking for new products, more will look less often in the coming weeks / Base = 1,400
9% 73% 18%
Will look for new products Will look for new products Will look for new products
more often than I did in about the same amount as less often than I did in the
the past 4 weeks I did in the past 4 weeks past 4 weeks
Among shoppers who purchase new products, one third “felt like trying something new.”*
New products are either totally new brands within the marketplace,
or new versions (such as flavors, formulations, etc.) of brands that already existed.
Source: IRI Survey 2020, IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers, 5/22 – 5/24/2020. / *IRI New Trier Database
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 24Shoppers are Focused on Limiting Their Time in Store; Marketers
Will Need to Provide Pre-Shopping Incentives to Scout New Products
Shopping Behaviors on Change in Time Spent Grocery Shopping
Last Regular In-Store Trip for Groceries vs. Similar Store Trip Prior to COVID-19
Base = Those Who Have Shopped for Base = Those Who Have Shopped for
Groceries In-Store in the Past Month = 1,226 Groceries In-Store in the Past Month = 1,226
56% 35%
Went straight to the usual
location for the items I
Skipped a lot of
aisles / sections
42%
wanted; didn't usually look to limit my time Spent less time shopping
at displays (end of aisle in the store than I did for a similar type
or other special displays of trip before COVID-19
around the store)
Q. How much time did you spend shopping on this
Q. Which of the following, if any, did you do during latest grocery trip, compared to how long you would
your last regular grocery shopping trip to a store? have shopped on a similar trip prior to COVID-19?
Source: IRI Survey 2020, IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers, May 22 – 24, 2020.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 25Omni-Channel Presence is Critical in Post-COVID-19 World;
Shoppers Seek New Products Both Online and In-Store
Looking For New Grocery Products Online vs. In-Store
Base = Those Who Have Shopped for Groceries Online in the Past 2 Months = 518
25% 25% 29% 22%
I'm more likely to I look at new products I'm more likely Does not apply,
look at new products about the same to look at new I rarely look for
to try when whether I'm shopping products when new products either
shopping online online or in-store shopping in-store online or in stores
Q. How likely are you to look for new products while shopping online for groceries vs. while
shopping inside a store? New products may be totally new brands within the marketplace,
or new versions (such as flavors, formulations, etc.) of brands that already existed.
Source: IRI Survey 2020, IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers, May 2020.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 26Despite More In-Home Consumption, Fewer Consumers
Are Seeking New Products than Pre-COVID-19
Pre-COVID-19 Current
Base = 4,121 Total 2020 Respondents Base = 1,400 Total Respondents, 5/22 – 5/24
12% 20%
I generally don't I generally don't
purchase new purchase new
products in this products in this
category category
Categories Description on Approach – Food Current Approach to New Products – Food
Q. For each of the following categories, please select Q. Please select the statement that best reflects the
the statement that best reflects the approach you take approach you currently take for each of the following
to new consumer packaged goods products. categories. Select one answer for each category.
Sources: IRI 2020 New Product Survey, January 2020; IRI Consumer Network™ Panel representing Total U.S. Primary Grocery Shoppers, May 2020.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 27Trusted Brand Status, Endorsements and Price Promotions are Vital for Building
Awareness of New Products, Especially During a Financially Stressful Time
Influence of Source of Awareness – Top Box Summary
Base = 4,121
Pre-COVID-19, displays drove just 13% of new product awareness among new product triers, but the
importance of displays will likely increase as consumers consciously control their time in store.*
41% 23% 48% 22% 18%
Item price Shopper loyalty Previous usage Coupons Mentioned /
card discounts / trust of brand from home recommended
by family / friend
Q. How does each of the following sources influence your awareness of new products?
Source: IRI 2020 New Product Survey, January 2020. / *IRI New Tier Database
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 282020: Innovation Principles for the Next Normal
• Innovate on the attributes that matter to consumers. Create
products that include benefits that consumers are willing to
pay more for, e.g., antibiotic- and gluten-free.
• Ensure clear and impactful positioning. Consumers need to
know what your product delivers and how it meets their needs
• Be distributed perfectly, not perfectly distributed. Maintain
distribution to build trial and repeat; if shoppers can’t obtain a
product, there’s no chance of a repeat purchase.
• Commit to and support well-timed promotions in year-one
and beyond.
• Anticipate realistic total and incremental sales. Manufacturer
forecast factors include distribution targets, advertising, trial
and repeat. Retailers will need to know how products fit their
portfolio and how they will drive incremental category volume.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 29What Innovation Can Look Like in 2020 and Beyond
Premiumization More is More Brand Expandability Pack Size Innovation Private Label
The Great Recession saw Multi-serve food products Leverage brand equity to Package innovation can High quality private
a new product evolution satisfied a financial need expand into adjacent be just as important in a brands are an important
that brought professional with high quality food and categories and make the recession as brand new innovation platform as
services home, including indulgent products. most of growth pockets. products. Estimate the retailers enhance their
restaurant-branded Products trending now Alcohol has been demand for multi-pack, commitment to shoppers.
frozen entrées and include multi-serving multi-serving or larger
identified as a category Emerging categories
teeth whitening. premium chocolates and sizes as a way to answer
ripe for innovation. include plant-based meats
non-chocolate candy. consumer demand. Beer
For the current recession, Traditional spirit brands and dairy alternatives, as
and cereal are just two
premiumization will take Multi-function laundry and can adapt to at-home well as CBD products.
the form of restaurant- home care with sanitizing cocktail machines a la examples of recent large
pack innovation shifts
quality meals for home properties and perceived Keurig Drinkworks, or
that feed a need to
consumption and convenience will become develop branded frozen
“pantry stock.”
personalized DIY kits increasingly important in slushy concoctions.
for services including the coming months.
hair treatments,
nail care and color.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 30IRI Offers a Variety of Solutions and Services to
Help Brands Best Manage Growth in a Downturn
Social Intelligence
Brand Optimization Brand
Analytics & Brand
Value Analysis Engine Landscape
• Provides feedback on what • Applies augmented decision • Gives broad multi-category brand
consumers are saying about your making to prioritize growth views with cross-category cultural
brand online opportunities based on size, attributes to identify and activate
• Determines which functional and demographics and execution brand strategy initiatives
emotive attributes you “own” and difficulty • Easily identifies competitive set,
which are “table stakes” • Assesses source of volume and explores specific structure
• Builds improved messaging incrementality to brand or category segments or walking attributes to
campaigns and identifies • Aids in choice of the right media assess business performance
opportunities for brand growth spend, distribution and price to • Updates dynamic structures with
• Grows both top and bottom line capture most switchers new products, most recent size and
while also driving market share trend POS data plus demographic
and panel measures monthly
ACTION and IMPACT ACTION and IMPACT ACTION and IMPACT
• >10% growth in sales • Doubles the odds of new product • Identifies macro changes to
• Increases brand value success while cutting the cost of consumer demand as they happen
• Enables more effective media innovation dramatically • Continually aligns brand portfolios
campaigns • Continually identifies and activates against future shopper needs
against growth opportunities
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 31Insights and Strategic
Guidance for Better Decisions
IRI’s Online Resources Include Real-Time
Updates and Weekly Reports Which Track
the Impact of the Virus on CPG and Retail
The IRI COVID-19 lmpact
Includes COVID-19 impact analyses, dashboards
and the latest thought leadership on supply chain,
consumer behavior, channel shifts for the U.S.
AND international markets
IRI CPG Economic Indicators Including the
IRI CPG Demand Index™, IRI CPG Supply
Index™ and IRI CPG Inflation Tracker™
Accessible through the insights portal
to track the daily impact of COVID-19.
This includes top selling and out-of-stock
categories across the country and
consumer sentiment on social media
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 32The Latest COVID-19 Reports and Insights from IRI (click to see full report)
THE CHANGING SHAPE OF
IRI COVID-19 IMPACT ASSESSMENT REPORTS THE CPG DEMAND CURVE LESSONS FROM THE GREAT RECESSION
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 33IRI CPG Demand Index™
The IRI CPG Demand Index™ provides a
standard metric for tracking changes in
spending on consumer packaged goods. It
measures weekly changes in consumer
purchases, by dollar sales, against the year-
ago period across departments including fixed
and random weight products, grocery aisles
and retail formats. The IRI CPG Demand
Index™ is available for eight U.S. regions and
all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 34IRI CPG Inflation Tracker™
The IRI CPG Inflation Tracker™ provides the
well-known price per unit metric for tracking
changes in pricing of consumer packaged
goods. It provides weekly changes in
consumer prices, price per unit against the
year-ago period across departments including
fixed and random weight products, grocery
aisles and retail formats. The IRI CPG
Inflation Tracker™ is available for eight U.S.
regions and all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 35IRI CPG Supply Index™
The IRI CPG Supply Index™ provides a
standard metric for tracking changes in
product availability (i.e. in-stock rates) in
stores for consumer packaged goods. It
measures weekly changes in product
availability against the baseline across
departments and retail formats. The IRI
CPG Supply Index™ is available for eight
U.S. regions and all U.S. states.
CLICK HERE FOR MORE!
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 36Want to Be the First to Know?
www.iriworldwide.com/en-US/Insights/Subscribe
Registered Users Get New
Thought Leadership from IRI’s
Research, Data & Analytics Experts
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 37IRI Global Headquarters
CONTACT US 150 North Clinton Street
Chicago, IL 60661-1416
FOR MORE IRI@IRIworldwide.com
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INFORMATION Follow IRI on Twitter: @IRIworldwide
© 2020 Information Resources Inc. (IRI).
© 2020 Information Resources Inc. (IRI). Confidential
Confidential and
and Proprietary.
Proprietary. 38 38© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 39
Measures of Innovation Success Used in This Report
What Makes a New Product Pacesetter?
• Completed a full year of sales in calendar-year
• Begin tracking year-one sales after 30% ACV weighted distribution achieved across multioutlet geography; must have 30% ACV or higher at date
of year-one completion.
• New Product Pacesetters are the Top 100 new banners (for each, f&b, and non-food) based on year-one sales across multi-outlet geography.
• MULO/multi-outlet = supermarkets, drugstores, mass market retailers, military commissaries, and select club and dollar retail chains.
Measure – Incremental manufacturer sales
Objective – Assess magnitude of New Product Pacesetter sales that contribute to dollar growth for the manufacturer
Method – Compare the manufacturer’s sales in the associated category during the 52 weeks pre-launch to the launch year or later years
Key Analyses
• Incremental sales % of total New Product Pacesetter sales (launch year) measures the efficiency of new products by calculating the portion of the Pacesetter
sales that are incremental to the manufacturer.
• Manufacturer % sales growth from incremental sales (launch year) assesses what percent growth the New Product Pacesetter(s) contributed to total
manufacturer growth in the category.
• % of incremental sales sustained (year 2 and beyond) evaluates the portion of incremental sales that the New Product Pacesetter is able to maintain after the
launch year. This is measured by comparing subsequent year sales to the pre-launch and launch year sales. Sales from new Pacesetters introduced by the
manufacturer in the same category in subsequent years are subtracted to isolate the ongoing value from the original product.
Measure – Incremental manufacturer share
Objective – Determine ability of New Product Pacesetter to drive share gain for the manufacturer
Method – Compare the manufacturer’s share in the associated category during the 52 weeks pre-launch vs. 52 weeks post-launch
Key Analyses
• Incremental share points gained (launch year) indicates the share growth gained by the manufacturer in the category due to the New Product Pacesetter.
• % of products with share gain (launch year) provides the success rate of manufacturers with multiple Pacesetter launches.
Notes: 1) Other typical measures of new product success include metrics around total new product sales, such as launch year sales and % of sales from new products.
2) Incremental share and sales to the brand is also analyzed, but this report focuses on the ultimate goal of driving gains for the manufacturer. 3) In cases where a pacesetter spans multiple
categories or a manufacturer introduces multiple products in the same category during the same time period, incremental sales are calculated separately and share gain is weighted by product size.
Source: IRI New Product Pacesetters 2008-2010.
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 40Strong Media Spending Drove Adoption for
Many Brands, But Others Relied Upon
Word-of-Mouth to Achieve Success
Bertolli Oven Bake Meals – Multi Serve Frozen Dinners / Entrees
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $32,134 $9,575
Add Cum Wghtd Weeks Any Merch 12.36 15.90
Average Items 3.3 4.3
ACV Weighted Distribution 70.5 77.8
% Trial 4.01 6.53
% of Triers Repeating - Cumulative 28.16 34.73
Dollar Sales (71.3% Growth) $39MM $41MM
Source: IRI New Product Profiler
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 41Strong Media Spending Drove Adoption for
Many Brands, But Others Relied Upon
Word-of-Mouth to Achieve Success
Dunkin’ Donuts Ground Coffee
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $16,125 $15,345
Add Cum Wghtd Weeks Any Merch 12.66 15.91
Average Items 3.0 3.0
ACV Weighted Distribution 79.0 86.1
% Trial 4.88 8.54
% of Triers Repeating - Cumulative 53.86 57.45
Dollar Sales $84MM $104MM
Source: IRI New Product Profiler
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 42Strong Media Spending Drove Adoption for
Many Brands, But Others Relied Upon
Word-of-Mouth to Achieve Success
Freschetta PizzAmore – Frozen Pizza
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $15,368 $8,816
Add Cum Wghtd Weeks Any Merch 11.10 12.70
Average Items 4.2 3.4
ACV Weighted Distribution 47.1 53.9
% Trial 4.38 8.03
% of Triers Repeating - Cumulative 26.08 30.37
Dollar Sales $42MM $46MM
Source: IRI New Product Profiler
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 43Strong Media Spending Drove Adoption for
Many Brands, But Others Relied Upon
Word-of-Mouth to Achieve Success
Green Giant Valley Fresh Steamers – Frozen Prepared Vegetables
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $0 $1,260
Add Cum Wghtd Weeks Any Merch 12.05 16.49
Average Items 4.1 4.4
ACV Weighted Distribution 76.2 85.3
% Trial 11.15 19.68
% of Triers Repeating - Cumulative 30.65 42.33
Dollar Sales $46MM $58MM
Source: IRI New Product Profiler
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 44Strong Media Spending Drove Adoption
for Many Brands, But Others Relied Upon
Word-of-Mouth to Achieve Success
Hormel Compleats – Shelf Stable Dinners
YEAR 1 – YEAR 2 –
CURRENT CURRENT
Total Media $$$ (000) $3,197 $2,301
Add Cum Wghtd Weeks Any Merch 8.90 13.00
Average Items 5.9 9.3
ACV Weighted Distribution 60.2 88.0
% Trial 7.11 13.06
% of Triers Repeating - Cumulative 37.67 46.78
Dollar Sales $52MM $83MM
Source: IRI New Product Profiler
© 2020 Information Resources Inc. (IRI). Confidential and Proprietary. 45You can also read
