NPD Thought Leadership

Manufacturers needed to prioritise producing sufficient quantities of the core.

Every innovation is a roll of the dice

How to secure the best odds in 2022

The NPD Landscape

Despite huge growth across much of Grocery, it has been a tough couple of years for NPD in the UK

YoY: 52 w/e 18th April 2021 vs. 52 w/e 19th April 2020. 2YA: 52 w/e 18th April 2021 vs. 52 w/e 21st April 2019.

Why has NPD struggled so much during the pandemic?

Manufactures needed to prioritise producing sufficient quantities of their pre-existing established SKUs.

If core SKUs are flying off the shelves anyway, why bother investing in releasing something new?

Retailers needed shelves to stay filled – reducing complexity helps this.

Consumers didn’t want to spend time considering whether to trial the latest innovation, defaulting to traditional favourites instead.

Today, 24% fewer NPDs have been released vs two years ago - the lowest it has been for a decade.

Kantar FMCG Purchase panel, 52 w/e 13 Jun 2021 number of new SKUs released over period, indexed vs 52 w/e 2019 June

With two-three years worth of NPDs hitting shelves simultaneously, how do you prioritise?

You follow the odds

This is a breakdown of each NPD’s sales in year two when compared to year one – are they growing, or shrinking?

NPD Survival Rates: Y2 performance, Total Grocery

Kantar FMCG Purchase panel, Year 2/3 Survival Rates Analysis based on 5 years of data up to 18th April 2021
Dead = <10% of Y1 sales value, Dying = 10-50% of Y1 sales value, Declining = 50-99%, Growing = 100-199%, Flourishing = >200%

Questions you should ask when considering NPD

The key behind any NPD’s success is for a manufacturer to have a clear objective in mind before it even comes to ideation. The answer to each of the below questions are critical to any NPD development:

What is the role of my NPD? Is it to generate long-term growth or a short-term win?
Am I trying to grow my share, the category, or just share of attention?
Am I innovating in a market ripe for growth?
Have I identified a specific person’s need or a changing consumer context I am addressing with this?
How is it meaningfully different to the competition?
Am I innovating in a connected way? Does it build upon my brand?

Finally, thinking about limited editions? With 2022 looking likely to be a bumper year for NPD, expect limited editions to take a back seat – there’s no need for new news products when there are a dozen more potential core SKUs waiting in the wings.