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Content Guy’s Note: Each Monday, we are featuring an article previewing some aspect of the annual Food Marketing Institute (FMI) show, scheduled for May 4-6 in Chicago.

Among the features of this year’s FMI show will be a rotating series of Close-ups, held on the exhibit floor, that will highlight specific areas of interest to attendees. We’ll look at a number of these in coming weeks….

On Monday, May 5 at noon, Valerie Skala, vice president, Analytic Product Management and Development, with Information Resources, Inc., will review the latest sales figures for the top-selling new products of the past year and some of the factors explaining their success, and look at some of the consumer attitudes and trends that impact new product success.

To get a preview of what will be discussed in the session, we conducted an exclusive e-interview with Skala:

MNB: What were the top five new products that closed "year one" in 2002?

Valerie Skala: These are the top five new products (based on FDM x $ sales) launched between Jan. '01 and Jan '02, so that we can report a full year-one sales figure for each product (allowing apples-to-apples comparison), with 12/02 being the last period of data used. There are other products launched later in 2002 that will be in our study next year.

1. Pepsi Twist (reg and diet)
2. Mountain Dew Code Red (reg and diet)
3. Diet Coke with Lemon
4. Crest Whitestrips
5. Listerine Pocketpaks

In your mind, what were the underlying consumer needs that these products addressed?

Valerie Skala: Focusing on the three carbonated soft drinks, I trace their success simply to the size of their category. CSD is the #1 packaged goods category in dollar sales, so even a small introduction in this category is "big" relative to other categories. Plus, these manufacturers tend to invest a lot in marketing: $47 million on Pepsi Twist, the biggest ad budget of any new brand on our Top 10 list. And this was the biggest year for new CSD brands in the past 8 years, with 7 new brands coming out. In the previous 7 years, the high was 4 and the typical # of new CSD launches was 1 or none. This is a category where consumers exhibit above-average willingness to try something new, and it's a low-risk purchase. Yes, there were expressed consumer needs that these products targeted. Many people like to put a twist of lemon in their cola, especially at restaurants, and both Pepsi and Coke decided to give consumers that right in the can. And Mountain Dew Code Red brought a fun new product to urban and ethnic youth with well-targeted marketing support.

What was the most unexpected success...the product that you never would have thought would succeed? Why was it a breakout success?

Valerie Skala: Not so long ago, many mass retailers would have shied away from a $40 product in the toothpaste aisle! But Crest Whitestrips proved that it can be done successfully. Its break-out success is attributed to a couple of factors. First, teeth whitening is a cosmetic service that only celebrities could historically afford. Crest Whitestrips brought this high-end service to the masses with a powerful marketing campaign that surpassed anything previously done in the whitening category, and with a product that delivers consumer-noticeable results.

Listerine Pocketpaks' success was also something of a surprise, becoming the #1 new product in our study if you rank on UNIT sales. With all the breath freshening gums and mints available, why would people want to suck on a strip of tape? Turns out, the portability of the product was a huge hit with consumers, particularly men because this product fits easily in shirt and pants pockets.

What was the product that failed unexpectedly...and why?

Valerie Skala: The failure of moist towelettes like Lever 2000 wipes to surpass the $10MM mark in sales was a surprise to me. These aren't failures, but rather a Pacesetter product that I thought would have done better. I think it's taking longer for consumers to adapt and change their habits to include moist-wipe products than the manufacturers had hoped. But realistically, it is very hard to change ingrained habits. But the category has shown tremendous growth (off a small base) and I think it has a lot more room to grow. The manufacturers are just going to have to continue to invest in marketing to get consumers to remember to use these products.

Do you think that price is the driving force behind most consumer behavior...especially in the current economic climate?

Valerie Skala: The #1 driver of successful new products right now is not low price, it's convenience. We have a huge cohort of 35-54 year olds who are at the busiest time of their lives, with demanding career and family responsibilities, and more money than time. Consumers have shown a tremendous willingness to pay a price premium for more convenient forms of their favorite products, as much as 2x and 3x the price.

Beyond being supplicants to the will of manufacturers, what should retailers be doing to make or break these product introductions?

Valerie Skala: Let me tell you a story about one very smart retailer. This drugstore chain recognized that the Venus razor was going to be a huge new product. They made that launch a top priority for their store managers. They featured the product the week BEFORE the product launched, so consumers would think to come to their chain to buy the product. The results were amazing. In month 1 of the Venus launch, this chain had twice their fair-share of Venus sales, and for the entire year had razor category growth of 11% versus category growth in other drugstore chains of 3%.

Based on what you're seeing out there, what do you think will be the hot product or category in the coming year?

Valerie Skala: Well, of products launched any time after January 2002, that will finish their "year one" period in 2003, I think we already know what next year's #1 new Food product will be. Vanilla Coke (diet + regular). If we could have counted it in this year's study, it would have been #1.

In Non-Foods, Gillette Mach3 Turbo is probably going to be #1, and Colgate Simply White is definitely giving Crest Whitestrips competition that will continue to drive substantial growth in the teeth whitening category.
KC's View: