It’s tough being a consumer products company.
Of the nearly 3,500 new consumer goods introduced in 2012, just 14 managed to generate at least $50 million in sales in their first year and sustain that momentum into their second, according to the market research group Nielsen.
“Since we started doing this study in 2008, there have been more than 17,000 new product launches in the consumer products market,” said Rob Wengel, a senior vice president for innovation in North America at Nielsen. “Only 62 of them have had that kind of success.”
So rare are the successes that Nielsen hands out awards for innovation and creates case studies, which are to be released on Monday, that explain what the winner did to ensure success with products that are not merely a slight change to an ingredient or an overhaul of packaging or portion sizes.
Some of the winners are surprising. “You say to yourself, sliced cheese — really?” said Taddy Hall, senior vice president of Nielsen’s Breakthrough Innovation Project. “One of the huge takeaways of this project is that it isn’t always obvious what innovation is.”
Indeed, Ultra Thin, a sliced cheese product that Sargento Foods introduced in 2012, was one of this year’s winners, doubling its sales in its second year and accounting for much of the 6 percent increase in sales of natural (as opposed to processed) sliced cheese.
Sargento knew that cheese was becoming a bigger part of sandwiches because consumers were working to reduce their consumption of meat. Its research told it that consumers were also concerned about the fat, calories and salt in cheese — but were reluctant to trade for reduced fat versions.
The answer was to slice cheese thinner, but that also presented a challenge. “Being able to consistently slice cheese at that thin of a thickness and have it shingle out neatly and get it into a package is hard,” said Rod Hogan, vice president for new platform development at Sargento.
The company nonetheless succeeded. Now Ultra Thin is available in seven varieties, with three more to be introduced this year.
An even more unlikely winner of Nielsen’s award was belVita, a “breakfast biscuit” from Mondelez. It had done well in Europe, but in the United States, consumers tend to think of biscuits as disks of fluffy dough, drenched in butter or gravy.
Thus, Mondelez was not only introducing a new brand, it was also building a new breakfast category and figuring out how to help consumers understand that belVita was not a cookie.
Mondelez made sure belVita, which is sold in the cookie aisle, initially was displayed in locations where consumers buy breakfast products, like the cereal aisle and near the yogurt case. It also handed out more than 10 million samples, and used a variety of social media and advertising to explain the product.
In its first year of sales in the United States, belVita brought in revenue of $70 million and sales grew by more than 50 percent in its second year. Last fall, Mondelez sold its one billionth breakfast biscuit here and introduced a soft version.
Most people would have been tempted to drop the idea that gave Anheuser-Busch a home run. Intrigued when Kirin, a Japanese competitor, introduced a beer to be served over ice about three years ago, the company came up with its own version. “The over-ice principle seemed to be a really powerful ritual, and that led us to mixed drinks,” said Pat McGauley, vice president for innovation at Anheuser-Busch. “The biggest mixed drink in the world is the margarita, and that led to the Mexican bulldog.”
The Mexican bulldog is a frozen margarita with a bottle of beer turned upside down in it — and it became the inspiration for Bud Light Lime-A-Rita, a potent malt cocktail concocted to be poured over ice.
Last year, Anheuser-Busch introduced the Straw-Ber-Rita, which helped the company generate more than $500 million in revenue in the first two years the “Ritas” were sold.
And not only has the product been financially successful, it also has attracted women, who tend to elude beer makers.
The company has introduced mango and raspberry varieties and is encouraging fans to mix them up, with the help of an 18-can pack of mixed flavors and a recipe card.
“People even created a Jingle Rita over the holidays,” Mr. McGauley said
~ Curated by The Marketing Curator and TME Pass The Idea