You are here
By Noreen O'Leary
The recession is driving down the rate of new product development, with the launch of new foods and drinks declining 51 percent in the first quarter compared to the year earlier period, according to new data from Mintel's Global New Products Database.
Compounding the rate of decline is the fact that Q1 new product introductions plummeted 32 percent from the fourth quarter. Marketers typically release fewer new products during the first quarter, but 2009's drop is higher than in recent years, according to Mintel.
Certain categories have cut back more sharply than others in the first quarter compared to the 2008 period. Mintel's GNPD saw higher than average declines in launches for non-alcoholic beverages, off 56 percent; chocolate, 55 percent; sugar and gum confectionery, 64 percent; and dairy products, 60 percent. Mintel noted, however, that confectionery launches could have shown a greater than average decrease due to Easter occurring in the second quarter this year.
"Faced with low consumer confidence and reduced spending, many food and beverage manufacturers cut back on product development and new product launches," Lynn Dornblaser, leading new product expert at Mintel, said in a statement. "Many companies face internal budget cuts that affect everything from new product ideation to development and marketing."
Mintel has tracked new products through three major recessions and has found that new product launches decline somewhat in the beginning of a recession, then quickly increase once the economy begins to recover.
Mintel's Dornblaser noted 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," Dornblaser said.