According to the report, there have been 30% less new product launches across the fast-moving consumer goods (FMCG) sector since 2010. Even though the economy has recovered in the last four years, pre-crisis innovation levels have not returned, which reflects a clear market failure. Despite the difficulties, manufacturers’ brands continue to be the drivers of innovation. They were responsible for nine out of 10 of the 109 new products launched on the market in 2018, amounting to 94% of the innovative new products.
Despite the efforts of brands to innovate, their presence in some important retailers remains very low. Mercadona, only lists 23% of the new innovations, Aldi, 11%, and the chain with the least innovations listed is Lidl, with 8%. Conversely, there are chains that introduce many new products to their shelves, such as Carrefour (84%), Alcampo (69%), El Corte Inglés (61%) and Eroski (52%). However, the distribution of new products remains very low, averaging 28%.
Being present in the main retailer channels is a decisive factor when it comes to the success of a new product in the market. According to the details of the report, products that arrive on the shelves of the top three retailers have a success rate of 86%. In contrast, if business practices do not allow innovative products to reach the distribution centres, the rate falls to 31%.
Innovation is synonymous with success. As the last few years of the study have shown, the success rate of new innovations has grown by 45% to reach 79%. The success of a new product largely depends on the degree of innovation and on whether it satisfies important needs that have not yet been met. Furthermore, it is frequently aimed at new users, new moments or new uses.
The most successful product launch in the FMCG sector in 2018 was Ladrón de Manzanas (Heineken), followed by Soluble 70% Cocoa (Valor). In the food category, the most successful innovation was Donettes Troleo (Bimbo), and in household and personal care it was the Lotion&Go Natural Honey spray-on lotion (Revlon). Manufacturers' rands are responsible for nine out of ten of the most successful innovations.
César Valencoso, Consumer Insights Consulting Director, Worldpanel Division, Kantar says: “We are currently in the most favourable environment for innovation that we’ve been in a decade, but despite this, the levels of innovative product launches remain worryingly low and, in most cases, they are sustained by strong brands that improve their listing and success rate, but this does not resolve the underlying problem. To reverse this situation, the entire industry must equally push and align their efforts to promote innovation as a shared need which will benefit the FMCG sector.”
Ignacio Larracoechea, president of Promarca, concludes: “It’s important to remember that innovation is fundamental for the growth of the sector and for GDP, to which brands contribute 7.4%. Brands make a huge effort to lead innovation in the sector and are responsible for 94% of new products. Bad practices, such not listing enough innovations or poor copies, lead to a loss in value and reduce consumers’ options. This market failure needs to be urgently resolved, since consumer well-being and increased R&D investment heavily depend on this. We have to be able to change this 30% loss.”
For the purpose of the study, the following definition of innovation was used: it encompasses all EANs that include a new attribute value, except brand and format (weight or litres), both if the EAN is new, or if it already exists and the codification has been changed and this change incorporates the new value. New combinations are not included, i.e., when an attribute value linked to a brand (not new) appears for the first time. It is, therefore, the only study in Spain that reflects the true level of innovation on the market.