New Product Activity Strong Despite Economic Downturn – Innova Market Insights
Product launch numbers recorded in The Innova Database between June 08-June 09 were up 7.3% on the previous 12 months, indicating that companies are introducing new products that were in the R&D pipeline before the financial crisis really began to make waves in September 2008 or have entered the next phase with low cost items.
21 Jul 2009 The economic downturn has not affected new product launch activity, but has had varying product launch impact at specific major companies, according to new research from Innova Market Insights. Product launch numbers recorded in The Innova Database between June 08-June 09 were up 7.3% on the previous 12 months, indicating that companies are introducing new products that were in the R&D pipeline before the financial crisis really began to make waves in September 2008 or have entered the next phase with low cost items. Many categories are remaining stable in terms of product launches, including dairy. In Q2 2007, there were 1,709 new dairy product launches reported, with 1,787 in Q2 2008. There was only a slight decline in the same quarter in 2009 to 1,696. “In general, companies and markets are bouncing back in 2009 after reaching product launch number lows in the last quarter of 2008,” explained Innova Market Insights Analyst, Natalie Tremellen.
Companies have responded in different ways to combat the economic crisis. Some are focusing on their core products or brands with increased promotional and marketing activities and in severe cases pulling less profitable products from the shelves. Meanwhile, investing in emerging markets has been a savior for some companies’ bottom lines, with sales growth reported in countries such as China, India and the Middle East, Tremellen explained. “Adapting marketing strategies to changing consumer habits, such as increased at-home eating could prove beneficial for companies to negate any further downturn for the remainder of 2009,” she predicted. The impact on innovation at global giants has varied dramatically, as a look at recent activity at just one global players covered in the new research reveals.
Unilever followed a highly productive Q2 2008 (507 new product introductions) with a decline to just 258 in Q1 2009 and a slight increase to 328 in Q2. The main activity area was ice cream, with 77 new product launches tracked by The Innova Database (Apr-Jun 09) from Unilever during this period in the run-up to the summer ice cream season. Unilever recently reported underlying sales growth of 4.3% for ice creams and beverages with “good growth in our indulgence ice cream brands,” with Magnum benefiting from the recent Temptation and Minis ranges and growth also reported from Ben & Jerry’s. The company also added to its Cornetto range with Cornetto Love Chocolate which combines milk, dark and white flavor chocolate ice creams in a chocolate wafer cone topped with triple chocolate curls. Meanwhile Cornetto Love Disc, which offers smooth vanilla ice cream with a rich caramel core, topped with a chocolate disc with cashew nut pieces.
More innovation can be expected, with the first products to use Unilever’s ice structuring protein (ISP) anticipated in Europe next year. The ingredient has been controversial in Europe as it is based on GM technology, but was given EU regulatory approval in April and has already been used in the US, Mexico, China, Philippines and Australia for several years. The ingredient, which is originally isolated from an Arctic fish and reproduced in laboratory through the fermentation of a genetically modified yeast, allows for the creation of ice cream and ice lollies which are lower in fat, sugar and calories and at the same time include more fruit. ISP also allows the creation of ice creams and ice lollies which better hold their shape and are less messy to eat because the ingredient slows down the melting process.
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