Economic pressure shifts market trends

Circana, a leading advisor on consumer complexity, has published a new comprehensive study titled 'Race for Resilience: Innovation Pacesetters.' The report uncovers declining product innovations across Europe's six largest markets, stemming from the increasing economic pressure and falling sales in Fast-Moving Consumer Goods (FMCG).

From 2021 to 2022, there was a noticeable 16.5% drop in new product launches, particularly in France, which witnessed a 27.4% decrease. Amidst the economic uncertainty, manufacturers have shifted their focus towards prioritising their existing core ranges to safeguard their market position.

While larger manufacturers held back, small and medium-sized manufacturers have taken the reins, contributing to 75% of all new product launches. Despite the difficulty in securing a premium for new products in these challenging times, they were successful in maintaining growth and driving market share.

The report sheds light on the evolution of consumer attitudes, emphasizing the increasing consumer expectations for products that offer value, versatility, sustainability, trust, and alignment with their lifestyle. The products that best cater to these needs are lower-priced, readily available, easy to use, and seamlessly fit into consumers' routines.

Tapping into health trends, new product launches in the chilled and fresh category have delivered significant value, constituting 22% of the total FMCG innovation value share. The baby food and pet food categories also witnessed impressive value sales increases, thanks to innovation. 

Surviving in today's market has become increasingly challenging for new products due to retailers' continuous range rationalisation. Only 74% of the new products introduced in 2021 remained on the shelves in their second year. Despite this, 23% of the new product launches have flourished, doubling their sales value in the second year.

To navigate this evolving landscape, Circana urges brands to tailor their innovations to the changing consumer needs and to develop targeted innovation strategies. "These strategies can help achieve growth in 2023 and beyond, especially as we continue to witness the consumer goods category's rules being re-written," Circana's report concludes.

Circana.com