Food firms waste £30.4M a year on failed launches

By James Ridler contact

- Last updated on GMT

Manufacturers waste more than £30M on failed product launches each year
Manufacturers waste more than £30M on failed product launches each year

Related tags: New product, Retailing, New product development

More than £30.4M a year is being wasted by food manufacturers on failed product launches, according to new research by market analyst E Fundamentals.

The report also found that more than £2.1M is wasted through online grocery platforms and 63% of products analysed had errors in their listings with the major online grocery retailers.

Commenting on the research, grocery sector analyst Bridgethorne urged manufacturers to work harder on the basics of demonstrating how new products would drive sales for retailers.

More work was needed to give new products the best chance of success well before they were listed on the shelves or online, claimed Bridgethorne.

‘Increasingly competitive’

“The market is becoming increasingly competitive and suppliers need to prove the role that a new product can play in delivering category growth,”​ explained Nick Kirby, Bridgethorne’s shopper, eCommerce and analytics director.

First and foremost, suppliers have to demonstrate how new products will drive sales and increase a retailer’s overall market share.”

Kirby suggested suppliers should develop detailed shopper insights to enable them to understand consumer demands. They could then decide whether a new product would meet a genuine need and create a new revenue stream.

Suppliers need to focus on products that stand out at key stages of the shopper journey, catch the attention of the shopper, and lead to sales,”​ said Kirby.

“These will be the products that meet the needs of the shopper, increase category sales and work best for retailers.”

‘Meet the needs of the shopper’

Manufacturers should look to ratings and reviews left by consumers on retailer websites for guidance on whether a new product was likely to be successful, said Kirby.

Conversations taking place in locations such as recipe forums could be used to identify the challenges faced by home cooks, how food fits into their lifestyles and what food trends are on the radar.

“A key consequence of shoppers and consumers sharing more information and views about products and trends is that the lifecycles of some products could become shorter,”​ added Kirby.

This will mean that food innovation pipelines will need to become faster and more agile to respond quicker to an immediate shopper and consumer need.”

Meanwhile, food and drink manufacturers could benefit from exploiting five key global retail trends​ that will shape shoppers’ purchasing habits next year, according to the grocery think tank IGD.

New festive products in focus

Our latest new product development photogallery ​featured a raft of festive food launches by manufacturers, including berry flavoured Slush Puppy, Christmas-themed nut mixes and retro sweets from Tangerine.

Related topics: NPD

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