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August 2002 Times & Trends Executive Summary
New Product Pacesetters: Non-Food Benefit Trends

New product development is a primary driver of growth in non-food categories.
Across many non-food categories, new products comprise a majority of category sales and growth. Between 1996 and 2001, new products comprised 100% of dollar growth in facial makeup, skin care, and mops/sweepers and over half of dollar sales in weight control tablets, disposable cameras, surface cleaning cloths and hair styling products.  Manufacturers are continually striving for the next breakthrough.

Above all New non-food products offer "enhanced effectiveness."
Nearly two-thirds of the 118 new non-food brands among IRI’s New Product Pacesetters offer “enhanced effectiveness” benefits.  Improved performance has become a critical success factor in many non-food categories, and new entrants often bring category expectations a quantum leap forward.  Examples of “revolutionary” new products with performance benefits include Pepcid AC, Nicorette and Nicoderm, Glade Plug-Ins and Revlon’s Color Stay cosmetics.

Health care new product activity was strong, despite no major Rx-to-OTC switches.
A record number of new health care products -- 23% of all Pacesetters--appeared on this year’s list.  While Rx-to-OTC switches have dominated health care Pacesetters in previous years and will likely reappear next year, this year’s group is a mix of “channel switchers” and extensions of major OTC brands.  Metabolife 356 and Metab O Lite tablets--both new names to CPG channels-- both achieved over $100 million in year-one sales, while Robitussin, Sudafed, Coricidin, Tavist, Motrin and Pepcid AC all launched successful brand extensions.

After a slow-down, beauty care new product development is back on track.
Beauty care products comprised less than 10% of 2000’s Non-Food Pacesetters– the lowest proportion in five years.  This past year, however, a renewed effort against product development was evident as one-fifth of successful new non-food product introductions were beauty care products. From cosmetics to hair care, new beauty products emphasize longer lasting benefits, which resonate well with consumers.  Products appealing to the over-50 Baby Boomers have also been highly successful. 

Compelling new benefits have given life to mature house care categories.
Driven by new technologies and formulas that make household chores faster, easier and more effective, sales in several relatively mature house care categories have taken off.  Liquid laundry detergent, cleaning tools and home air fresheners all received major boosts from innovative products; each category posted annual sales gains above 7% between 1994 and 2001. The hottest area in home care innovation currently is in surface cleaning, where the battle for share has intensified as sweepers, disinfecting wipes and dusting mitts have entered the fray.

True innovation is worth the effort.
Most brand extensions offer “me-too” benefits, which already exist in the category, rather than truly innovative benefits.  An extensive analysis of 931 new products introduced since 1995 revealed that truly innovative products yield 56% higher sales than “me-too” products.  While “cloning” a category leader may be safer and faster, investing in true innovation is typically worth the effort.

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