LAS VEGAS — Hispanic consumers, low-income shoppers, health-oriented kids and aging Baby Boomers collectively present an incremental sales opportunity of $126 billion, according to Scott W. Klein, president and chief executive officer of Information Resources Inc.
He encouraged 1,500 retailer and manufacturer attendees at IRI's “Changing the Game” summit last week here at the Wynn Las Vegas to cater to their needs.
“Hispanic shoppers are expected to generate $20 billion in incremental sales by 2015, especially in home care and personal product segments,” said Klein. “Hispanics spend 15% more on household products than the average U.S. consumer.”
The often-overlooked segment of lower-income shoppers, which comprises one-third of the consumer market, also presents substantial incremental spending potential. It equates to $40 billion, according to Klein.
“These shoppers live from paycheck to paycheck, so they make more frequent trips to the store, because that is how they manage their money,” he said. “They can't afford large package sizes. Consumer groups are changing what they want, where they want it and when they want to buy it.”
Healthy kids products present a $20 billion sales opportunity, while incremental Baby Boomer sales have the potential to top $46 billion, Klein said.
Despite these additional sales opportunities, only 10% of new products successfully penetrate the marketplace.
“The odds of a new product succeeding are five times worse than if you played roulette and bet on red or black,” he said. “Three-quarters of shoppers bought less than 10 new products last year. It's 2007 — do you know where your shoppers are?”
Although the majority of new-product introductions miss the mark, Klein acknowledged that through innovation success is attainable.
“Products that beat the odds are taking care of business in the areas of health and wellness,” he said. “Kraft's South Beach Diet products achieved more than a quarter of a billion dollars in sales last year.”
After the South Beach Diet line, the second-best-selling new product of 2006 was Dryer's Edy's Slow Churned ice cream, which brought in $229 million in revenue.
“The product contains half the fat, it tastes good and it's available in no sugar,” Klein noted.
The marriage of major brands also proved to be a successful merchandising strategy in 2006. Procter & Gamble's Tide with Febreeze product, which brought in $138 million in its first year, was the third-best-selling item last year.
Healthier products, such as soups merchandised as part of Campbell's reduced-sodium soup line, which “delivers on the mmm-mmm-good promise, while redefining the soup category,” are among Klein's picks for this year's best-sellers.
“Birds Eye Steamfresh products, which go from the freezer to the microwave in their pouch, are also incredible,” he said. “They're ready to go and delicious. Well, they are as delicious as vegetables can be. You just take it from the freezer and slap it right into the microwave.”
He projects that Huggies Supreme Natural Fit diapers will also be one of 2007's top sellers. “These diapers are for older and larger babies, and those of you who know what it's like to have a diaper fail on an older or larger baby will appreciate this,” he said. “They're made with an innovative hyper-flexible technology, which makes them fit really well.”