TOP PRODUCTS CROSS CHANNELS TO SUPERMARKETS

DAN ALAIMO

CHICAGO -- Products coming into the supermarket from other retail channels topped the list of 2001 Pacesetters compiled by Information Resources, Inc., here.

The 15 products on the list were chosen when IRI sought to identify the best out of more than 1,000 new product launches over the 2000-2001 time period.

Among the products brought into the grocery channel for the first time during that period were Iams dog and cat food from Procter & Gamble, which topped the list, followed by Metabolife 356 weight control product, Boston Market frozen dinners from Heinz, Starbucks ground coffee and beans from Kraft, and Metab O Lite weight control product from Richardson Labs.

"It clearly represents manufacturers attempting to extend the equity of their products into the grocery channel," said Neil Canter, executive vice president and general manager, Analytic Insights Group, IRI.

"There is opportunity for the supermarkets in this situation, because there are different new products that have traditionally been in other classes of trade coming into their class of trade," he said. This can help balance the amount of business flowing out of supermarkets to other classes of trade, he noted.

The rest of the list was made up of mostly category extensions, and very few product innovations.

"There is a great deal of conservatism among manufacturers and how they approach new products, which actually isn't surprising when you consider the economic environment. "Rather than seeing bold new innovations coming out of left field and taking categories by storm, we are seeing extensions of existing products into new channels, such as P&G's Iams moving into grocery, and some of the weight-loss products moving into drug," Canter said.

Other items on the Pacesetter list were: Pampers Baby Fresh One Ups moist towelettes, from Procter & Gamble; Physique hair care from Procter & Gamble; Breyer's Ice Cream Parlor from Unilever; Clorox Disinfecting Wipes; Ruffles Flavor Rush potato chips from PepsiCo; Cover Girl Smoothers cosmetics from Procter & Gamble; Dove Deodorant from Unilever; Oil of Olay Daily Facial cleansers from Procter & Gamble; Mini Oreo cookies from Kraft/Nabisco; and Cascade Complete dishwasher detergent from Procter & Gamble.

"What this list is telling me is, we have careful manufacturers trying to make the best decisions they can in a difficult environment," Canter said.

Ed Kuehnle, president of IRI North America, believes manufacturers are simply "responding to the demands of increasingly fragmented, yet savvy consumer groups who basically want it all.

"Manufacturers in the CPG sector are faced with launching new products at a substantial investment in a difficult economic climate," he said. "Therefore, product trends are lending themselves less to expensive innovation and more toward brand and channel extensions, which is not necessarily a bad thing."

The dominant characteristic of these introductions is convenience, he said. But products that improve health or allow indulgence are also well represented on the list.

"Consumers are clearly living busy lives in which they want products of convenience, a focus on health, and indulgence in tasty or gourmet treats," Kuehnle said. "These results track with the demographic trends where the baby boomers and their maturing children are driving much of this growth."