The report looks at year one multi-outlet* dollar sales for brands that completed their first year of sales in 2015. The clock starts ticking "when a product hits 30% distribution and lasts 52 weeks", explains IRI, so would cover, for example, sales of a brand that hit 30% ACV in September 2014 and completed its first full year of sales in September 2015.
According to these criteria, McCafé was the clear #1 with $172.7m in retail sales in its first full year on shelf, followed by Oscar Mayer Deli Fresh BOLD at $146.2m, Dannon Oikos Triple Zero yogurt at $108m, Coca-Cola-backed fairlife high protein milk at $87.1m and Yoplait Greek 100 Whips at $83.6m. Another protein-based product – Cheerios Protein - came in at #10 ($49.8m).
Rising stars - which IRI defines as promising new brands that have "started their year-one, based on above-referenced 30% ACV, but have not yet finished the year" - included Starbucks Iced Espresso Classics and Red Bull Yellow Label.
Susan Viamari, editor, Thought Leadership, at IRI, said: “According to IRI’s 2016 New Product Survey, 29% of consumers want to indulge without paying restaurant prices; 24% want to add excitement to their daily diet; and 21% seek options that are truly new and different.”
35% of Millennials learn about new products on social media
When it comes to driving awareness of new products, IRI’s 2016 New Product Survey reveals that 19% of consumers learn about new products from blogs and social networking sites, with this figure rising to 35% among Millennials.
“Consumers may be learning about these products from brand-initiated conversations,” notes IRI, “but they are also very aware of information being shared by other product users. CPG marketers must act to capitalize on this brand ambassadorship opportunity.”
According to a report from IRI and The Boston Consulting Group unveiled at the IRI Growth Summit this week, small and midsize companies continue to take market share from larger CPG competitors, with Quest Nutrition, Fairlife, Bai, Vita Coco, KIND, Ready Pac Foods and Sargento Foods among companies with annual sales of less than $5bn that ranked among the CPG industry growth leaders in 2015.
In 2015, CPG sales in the US rose by 3.1% to $670bn, with small companies (with less than $1bn in sales) and midsize companies ($1-5bn) accounting for 46.4% of total CPG sales, a 2.7% gain since 2011, which translates into an $18.1bn shift in market share, says the report.
Protein-fueled brand Quest Nutrition was the top-performing small company on the BCG-IRI list, while another protein-packed brand, fairlife, was the third-highest-ranking small company.
(The findings are based on an annual analysis by BCG and IRI of the performance of 400+ CPG companies with annual US retail sales of $100m+.)
Consumers don't think in terms of categories and departments
When it comes to positioning, CPG marketers tend to think in terms of “categories, aisles and departments”, says the IRI report. Consumers, however, don’t think along these lines, notes IRI: “They think about what they need and how to satisfy that need. They think about how they will use or consume a product, where they will be at that time, and added benefits they hope to achieve.”
So to cash in, it adds, marketers must “adopt this broad-scope consumer mindset” when it comes to innovation, but also when they assess competitive threats: “For example, Greek yogurt not only sources volume from other yogurt brands, but also sources significant volume from healthy snack bars (e.g., Kind bars), other dairy snacks (e.g., string cheese), and a wide selection of ready-to-eat cereal brands. If marketing programs take only yogurt competitors into consideration, messaging will be sub-optimal and impact will be lost.”
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*IRI Multi-outlet data covers US grocery, drug, mass Including Walmart), dollar, club (including Sam’s & BJ's), and military commissaries, but NOT convenience stores or online sales.