Brand Extensions Set the Pace in 2009

It sounds like the list of ingredients for an Iron Chef concoction: Campbell’s Select Harvest soup, Bud Light Lime beer, Arnold Select Sandwich Thins bread, Green Giant Valley Fresh Steamers frozen prepared vegetables, and Dreyer’s/Edy’s Fun Flavors ice cream. Instead, these are the leading entries in Information Resources Inc.’s roster of top new food/beverage consumer packaged goods of 2009, based on sales during their first full year on the market.

Filling out the top 10 were Gatorade Tiger/Focus sports drink, MGD 64 beer, Mountain Dew Dewmocracy carbonated beverage, Bush’s Grillin’ Beans (what they sound like) and Kellogg’s FiberPlus snack bars. (See also: “IRI’s Top Launches of 2009”)

This latest in IRI’s annual reports on new products also looked at trends that characterized successful launches. Contrary to the historical pattern, in which “new food brands have outperformed brand extensions,” 2009 was a year in which brand extensions dominated the ranks of “New Product Pacesetters.” (That’s a class whose criteria include “at least $7.5 million in year-one sales across food, drug and mass channels (excluding Walmart).

Ninety-three percent of the foods/beverages qualifying as Pacesetters last year were brand extensions. Looking at the data another way, new brands of foods/beverages had average year-one sales of $15 million last year, while new brand extensions averaged $28 million.

The report suggests that the economy played a role in boosting brand extensions and tamping down wholly new brands. It cites IRI research in which 46 percent of respondents said they’re “trying fewer new products these days” and added, “In difficult economic times, the advantage of coming to market with an established brand equity is substantial.”

Another part of the report noted that the pace of product launches was fairly stable last year in “a majority of the most active” food/beverage categories. The notable exceptions were snack/granola bars and cold cereal, with introductions in those two sectors down significantly from the previous year. By contrast, product introductions were above historical average in the frozen dinners/entrees and crackers segments, a development IRI links to consumers’ recession-encouraged predilection for eating more at home these days.

“Wellness” benefits were prominent in last year’s successful food/beverage launches, says the report. One aspect of this: “22 percent of 2009 New Product Pacesetters tout high fiber or whole-grain claims.” Nearly one-third of the Pacesetters also include nutrients added to enhance the product’s “wellness profile.” The report cites the example of Ocean Spray CranEnergy, “a juice drink enhanced with green tea extract and B vitamins, providing a healthful and natural energy boost to ‘help get through a busy day.'”

As has been true in the past, “convenience” was a conspicuous attribute among many successful new food/beverage products last year. “In 2009, 33 percent of New Product Pacesetters touted convenience-related features,” says the report.