Kraft, Mars top German R&D charts

03 June 2011

BERLIN: Kraft Foods and Mars are among the food companies making the most effective use of innovation in Germany, a study has found.

OC&C Strategy Consultants estimated that some 1,800 products were launched in the German food sector during 2010.

It also reported this figure has grown by an annual rate of 7.8% since 2006, and continued to rise despite the recession.

The consultancy studied 25 leading brand owners from the food segment to gauge the comparative success of the R&D efforts they undertook between 2006 and the end of last year.

On a four-point scale, where a low score represented incremental innovation and high ratings evidenced disruptive models, 75% of the organisations tracked registered 1.5 points or below.

"Few companies are operating beyond their traditional categories. The majority are strengthening the depth of their traditional range through product variations," Chehab Wahby, a partner at OC&C, said.

More specifically, the primary trends attracting attention included health and wellness, organic and natural goods, convenience and localisation.

Kraft Foods took the top spot when combining data for the ratio of new offerings in relation to sales and the share of its portfolio occupied by such lines.

Claiming second place was Kamps, praised for augmenting its selection of pre-packed salads and spreads by launching several new convenience-led products.

However, on another core metric, namely securing widespread distribution, Kamps proved less effective, as 90% of newly-introduced products struggled to attain significant reach.

Mars performed most strongly here, as a quarter of the shelf space held by its stable was attributable to goods rolled out in the assessment period, a third of which have achieved an established position in the market.

August Storck, the maker of Merci and nimm2, logged 30% for long-term availability, with 25% of the firm's in-store presence allocated to extensions and original additions.

In all, just nine of the manufacturers analysed had renewed over 25% of their entire range, a total hitting 53% for Bongrain, 47% discussing August Storck and 35% concerning Kraft Foods.

"Only a dedicated understanding of market opportunities and brand positioning provides a company with the answers necessary to meet key questions regarding a successful innovation strategy," said Wahby.

Data sourced from OC&C Strategy Consultants; additional content by Warc staff