“Faced with low consumer confidence and reduced spending, many food and beverage manufacturers cut back on product development and new product launches,” states Lynn Dornblaser, leading new product expert at Mintel. “Many companies face internal budget cuts that affect everything from new product ideation to development and marketing.”
In certain categories, manufacturers have pinched new product launches even more tightly. Compared to Q1 2008, Mintel GNPD saw higher-than-average declines for non-alcoholic beverages, chocolate, sugar and gum confectionery and dairy product launches (56%, 55%, 64% and 60%, respectively).
Dornblaser believes, however, that lower new product launch numbers won’t last. Pointing to monthly data from Mintel GNPD, she notes that while food and drink introductions declined steadily from October 2008 to February 2009, they increased in March. “Consumer confidence has leveled off for the time being, which marks an opportunity for manufacturers. Now is the time for ideation and innovation for products that answer shoppers’ desires for value, quality and pleasure.”