August 3, 2023
(press release)
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BRACKNELL, UK – 31st July 2023 – Circana, the leading advisor on consumer complexity and formerly IRI and The NPD Group, today launched its Race for Resilience: Innovation Pacesetters report for Europe. Covering the six largest markets in Europe (France, Italy, Germany, Spain, UK, and Netherlands), the report reveals declining product innovations across the last two years, particularly across larger brand manufacturers – revealing a growing aversity to the perceived gamble of new products, as sales in FMCG products decline. 144,432 new products were launched across Europe in 2022 compared to 172,997 in 2021 (-16.5%). The largest drop was seen in France where new product launches fell from 27,317 to 19,843 (-27.4%). Fewer innovations reflected both manufacturers and retailers prioritising their existing core ranges to maintain availability on shelves to protect volume and share, and perhaps declining confidence in commanding a premium price typically associated with new products – as businesses continue to grapple with inflationary turbulence. Small and medium-size manufacturers, leveraging their ability to react to changing market forces quickly, were responsible for 75% of all new products launched, contributing 68% of total value sales from new products. While just one in four new product launches were brought to market by large brand manufacturers over the period, they delivered greater share value (32% of new product value sales) due to their distribution and supply chain advantages. Ananda Roy, Global SVP, Strategic Growth Insights, Circana, said: “The evidence from the analysis means innovation continues to be a sustainable source of organic growth, despite difficult trading conditions and the cost of living crisis. While the ability to command a significant premium is constrained, new product launches continue to deliver the volumes that brand manufacturers need to maintain growth and market share.” New product launches can feel like a gamble when there is increasing competition for shelf space, especially at a time when the industry is experiencing declines in sales volumes of FMCG products, however there is no doubt that it can add immense value too, giving brands the opportunity to expand an existing portfolio or even create an entirely new one. Innovations continue to be resilient and help to drive demand despite inflationary headwinds.” Key findings from the report include: Roy concluded: “To remain competitive, brand owners need to make the benefit of the innovation relevant to evolving consumer needs. They need to tap into and market the transformation, not just the product feature. A targeted innovation strategy can help address the relentless search for growth in 2023 and beyond, especially as we continue to see the rules of the consumer goods category being re-written. This evolving innovation eco-system will be the driving force for change across an industry struggling to cope with the changing consumer landscape.” Circana Contact Ananda Roy Media Contact Nikki Alvey
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