Economy hinders new product development
May 01, 2009
by Bryan Salvage
CHICAGO — Partly as the result of companies coping with the changing economy, fewer new products are showing up on supermarket shelves so far this year, according to new data from the Mintel Global New Products Database. Total food and drink product launches have been cut in half since last year (a 51% decline from Q1 2008 to Q1 2009), according to Mintel.
New product introductions dropped sharply from the last quarter of 2008, by 32%. Manufacturers typically release fewer new products during the first quarter of a year, but 2009’s reduction is higher than in recent years, Mintel relays.
"Faced with low consumer confidence and reduced spending, many food and beverage manufacturers cut back on product development and new product launches," said Lynn Dornblaser, leading new product expert at Mintel. "Many companies face internal budget cuts that affect everything from new product ideation to development and marketing."
Lower new product launch numbers won’t last, Ms. Dornblaser believes. Pointing to monthly data from Mintel G.N.P.D., she said while food and drink introductions declined steadily from October 2008 to February 2009, they increased in March.
"Consumer confidence has leveled off for the time being, which marks an opportunity for manufacturers," she added. "Now is the time for ideation and innovation for products that answer shoppers’ desires for value, quality and pleasure."