Economic Downturn Curbs New Product Introductions

According to research giant Mintel, new product launches in the food & beverage category are off 51% from last year.

New product launches in the first quarter are generally lower than other times of the year, but this first quarter looks quite sober. Among those categories singled out for reporting were:

1.) non-alcoholic beverages (down 56%)
2.) chocolate (-55%)
3.) confections & chewing gum (-64%) and
4.) dairy items (off 60%)

The media feeding frenzy about the recession has even sparked some clever gimmicks, including Information Resources, Inc.’s “Downturn Generation” nametag that supposedly applies to the New Shopper in the New Economy. Their report “Dissecting the Downturn Generation: Recognizing and Leveraging Permanence in Today’s Transformational Economy,” makes the absurd claim that changes in shopping habits are now “permanent” and “irreversible.” Eager to justify their research budgets, they claim to have identified three “new” categories of shopper:

Optimists, who believe “things will get better during the next 12 months” and are cutting spending selectively and as a last resort

Maintainers, who believe “the economy won’t get worse, but it won’t get better either,” and

Pessimists, who are just this side of digging a shelter and stocking it with guns and canned food.

One stat emerging from the study is how economic storms can have lasting impact on shoppers, at least in terms of their mental state: gas prices are 50% below their height in 2008, yet 73% of surveyed shoppers feel gas prices had an impact on their financial picture during the last 6 months. Not surprisingly, 75% thought the same thing about food prices, despite a leveling off or decline in many foodstuffs since last Summer.

Excerpted from BSLG's weekly subscription news reader service Food Business News. To subscribe or for information about licensing, contact Broad Street Licensing Group (tel. 973-655-0598)