The failure of new product introductions

The failure of new product introductions
One fact that never ceases to surprise is the dismal performance of new product introductions. According to The Nielsen Company, there were more than 88,000 new UPCs introduced during the past year (ending March 24, 2007), of which 56 percent of them - or more than 49,000 UPCs - were in the food and beverage category, the rest being in non-food grocery and HBC.Just how does anyone imagine that a supermarket could make room for even 10 percent of these introductions? And why should they? The same study found that just 2.9 percent of these products (2,561 SKUs) actually achieved $1 million or more in sales. It's a case of the few creating the most. These new items generated some $13.6 billion in sales during the past 52 weeks, and the new food and beverage items generated close to $8 billion in revenue. But of the top 100 new items, 96 of them are brand extensions ... suggesting that "new" ain't what it used to be.In the food segment, the new product engines tend to be kid-oriented products - 23 of them are snacks, 12 of them are candy, and 12 of them are cereal. In non-food/HBC, where new items tend to have the biggest impact, the new product introductions tend to be concentrated in highly disposable items such as paper products (42 out of the top 100), disposable diapers (25), and cough and cold remedies (15).There also tend to be a lot of new product introductions in categories that make health and wellness claims, such as natural products (4,202), organic (2,405), and more than a thousand items each in categories that include those that offer an absence of a specific fat, make a vitamin/mineral claim, are preservative free, or are whole grain, low fat, low sodium, fat free and cholesterol free.