Analyst Corner: The Key to Successful NPD in 2019

21st century shoppers are experimental and willing to try new things. In fact, more than half of grocery consumers bought a product they hadn’t tried before last month. Changing dietary requirements and increased focus on healthier lifestyles have been at the forefront of most of the recent New Product Development (NPD).

Unsurprisingly the strongest demand for new grocery items comes from younger generations, fuelling the growth of vegetarianism and veganism. Veggie variations of old favourites, products high in protein and low in sugar/fat/salt have been more prominent on supermarket shelves to satisfy these changing consumer needs.

Changing dietary needs have boosted the rise of smaller brands cropping up across different grocery categories, while big brands are not staying still either and have been introducing new lines or popular product enhancements to appeal to vegetarian, vegan, gluten-free, low fat or no/low sugar consumer needs. Examples are especially rife across snacking assortment, as highlighted in the HIM Healthier Snacking report in 2018, healthy alternatives have been launched to compete with traditional items such as crisps and chocolate, whilst some old-time favourites have been improved with new recipes, such as the recent addition of Mondelez’s lower sugar Wine Gums.

Production sustainability is also of high importance, as highlighted in the last HIM Analyst Corner blog, two fifths of consumers are willing to pay more for sustainable products. Environmentally friendly packaging and locally sourced ingredients are very much on trend right now and appeal to shoppers. A good example comes from Pinkster, using discarded raspberries for their newly launched Gin Jam Cocktail Mix.

NPD: Pinkster, using discarded raspberries for their newly launched Gin Jam Cocktail Mix

But how do you make sure that these sustainably sourced products, vegetarian alternatives and low in fat variations are being picked up from the shelves? According to the HIM Omnichannel Barometer, that surveys 1,000 consumers every month, store layout is key, as 60% of consumers notice new products whilst browsing in store. Our store visits have uncovered little new product signage, with most banners focusing on special offers. However, it is worth noting that special offers and new products are often intertwined, and promotions is the No. 1 influencing factor when deciding whether to buy new food or drink products.

When it comes to engagement with new products, it won’t come as a surprise that younger population is best reached online, while older shoppers tend to dwell a little longer in store and notice new items during their shop. NPD aimed at young and trendy shoppers needs strong online marketing campaigns, while health-related items must have relevant descriptors that are easy to spot on product packaging.

However, on-trend messaging and improved recipes do not guarantee success. Shoppers tell us that product quality is of highest importance when buying new items. Our research has discovered a gap which needs to be filled by manufacturers, because consumer satisfaction with NPD quality is much lower than the importance of quality when buying NPD. Strong messaging highlighting quality relating claims will attract shoppers, however products must then deliver on those statements to earn a repeat purchase. Product testing and consumer research are essential parts of developing new products and if you wish to gain a better understanding of your shoppers and their needs, please do get in touch.