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CPG launches depend on few households

News, 20 August 2015

ST. PETERSBURG, FL: Most new CPG launches fail, in part because of the very small percentage of households – less than 1% – that drive most sales volumes for such products, a new study has shown.

Catalina, the personalised digital media company, analysed the behaviour of some 45m consistent shoppers across 11,000 US stores, looking at the 50 top-selling food and beverage products identified in the latest IRI New Product Pacesetter report.

It found that just 0.7% of shoppers accounted for 80% of volume for the average new product studied.

Of the 50 new food and beverage products it assessed, just eight had shopper concentrations of more than 1% driving 80% of volume, and only one had a concentration above 2%.

In addition, the study uncovered extremely low retention rates for most new products, with just 11% of those who had tried in the first six months of a launch still engaged with a new item after one year.

It's clear, said Marla Thompson, SVP/US strategy for Catalina, that "it is critical for brands and retailers to find likely triers and repeat buyers while also engaging the right shoppers over time to sustain repeat purchasing".

She added that "purchase-based targeting can be a cornerstone of successful new product launches".

According to the report, engaging shoppers based on predictive modeling of their likelihood to buy can result in trial rates that are five times more than the natural trial rate.

But even targeting the most receptive shoppers may not be enough to succeed as the study also identified a major distribution challenge for new products.

It took 28 weeks for the average new product to reach 75% of its peak distribution in stores tracked in the study, a delay that is likely to result in wasted media spend and missed opportunities.

Data sourced from Catalina; additional content by Warc staff