New products rise 12%, a 32-year record

Prepared Foods, Feb, 1996 by Lynn Dornblaser, Martin Friedman

Just when it seemed that food manufacturers were turning away from an obsession with fat-free and fat-reduced foods, 1995 returned with a fat-busting vengeance. Category after category, company after company, and brand after brand presented new products for a presumably fat-fearful public.

With the exception of baby food, every food category reported scores of fat-diluted products. Bakery, dairy, entrees, processed meat, and desserts, in particular, reacted to the surge in fat-reduced consumer interest.

That's what helped boost this years total food product introductions to 16,863 items, up 12% from 1994's 15,006, making for an all-time high.

It's obvious why companies continue to market nutritionally enhanced new products. Quickly, what are the most successful new brands in the past three years? The answer is Nabisco's SnackWell's and ConAgra's Healthy Choice, both fat-adjusted and both racing toward billion-dollar sales levels.

Both brands entered new categories in 1995. The SnackWell's label appeared on yogurts, pies, desserts, and bakery mixes; the Healthy Choice name on fresh bread and popcorn. These mega-brands will join forces in 1996 with a line of Healthy Choice Cookies made by Nabisco. (Or will it be Snackwell's meat and cheese lunches?)

Cross-branding continued as a lively marketing strategy in 1995, although not to the same degree as in 1994. Jell-O Pudding in Pillsbury cake mixes and frosting was the outstanding 1995 brand name ingredient cross-ruff.

Since any changes in U.S. food consumption are evolutionary rather than revolutionary, it seems sensible to repeat some of the directions that influenced new products in the past two years: leveraging current brand equities, self-indulgence vs. self control, children's products in new categories, shortened new product life cycles, "me-tooism" by late-comers, the lack of technological product or packaging breakthroughs, and the ongoing upgrading or "gourmetizing" of traditional products to meet the growing sophistication of the American palate.

Major trends and highlights for many of the food categories tracked by New Product News are summarized below. Detailed category, company and trend data is available upon request. Contact Lynn Dornblaser at 312/464-8502 for more information, or fax her at 312/464-464/8550.

BAKERY FOODS: As Nabisco's SnackWell's sales soared toward the half-billion dollar level, virtually every cookie baker in the country has played monkey-see, monkey-do with lines of fat-free or fat-reduced cookies (and other bakery foods).

Entenmann's (a 1995 CPC acquisition from Kraft) switched from fat free to "50% less fat line," indicating that total fat reduction may not be worth the flavor sacrifice. However, fat-free/fat-reduced bakery products dominated the 1995 bakery category and extended into such new segments as cheesecakes, toaster pastries and pies.

During the year a number of companies sold their fresh baked goods lines (Continental Baking was sold by Ralston Purina, Campbell Taggart was spun off by Anheuser Busch, and Entenmann's, Oroweat, et. al. sold by Kraft). As these corporations gave up their bakery businesses because of declining profits, other food giants expanded their fresh bakery product lines and distribution.

Sara Lee expanded into new markets with a wide bread and sweet goods line. Metz Baking tested bread and rolls under the familiar Healthy Choice and Pillsbury brand imprematurs. Fresh, refrigerated and/or frozen bagel lines appeared from Pepperidge Farm, Continental (Braun's Stay Fresh), and Campbell Taggart (Earth Grains).

BAKING INGREDIENTS: The reported demise of home baking may be exaggerated as the number of new baking ingredients continues at the 40- to 50-per-month level. The big three "Baking Masters/Mistresses" -- Duncan Hines, Betty Crocker and Pillsbury -- continued to dominate the category with multiple product entries.

Procter & Gamble's Duncan Hines, fairly conservative in the past, introduced Cupcakes for Kids in such varieties as Cotton Candy, Polka Dot Splash, Soft Rocks, and Dirt. A grape bubble gam frosting mix accompanied the cupcakes. For adults such adventurous flavors as key lime cake mix and mango tangerine frosting demonstrated a more adventuresome marketing approach.

General Mills, giving Betty Crocker a politically correct makeover, also extended its existing lines with a variety of new flavors, especially fat-free muffin and brownie mixes. Two major new lines were Brownie Sundaes (consumers add the ice cream) and Sweet Rewards Fat-Free Snack Cake Mixes at the other end of the weight control spectrum.

BEVERAGES: New beverages continued to pour into the marketplace in spite of all reports that the New Age Beverage Wave had crested. Snapple sales reportedly are slower than expected, Arizona has distribution difficulties, Everfresh, West End and Elliott's brands are moribund, and flavored waters, seltzers, iced teas, etc., are all in a slow-growth mode. So, who's behind the 2,854 new beverage product introductions in 1995? Hot beverages for a start. New Product News recorded more than 1,200 new coffees in 1995. Since the typical specialty coffee firm can introduce 60 flavored coffees at a time (in regular and decaf varieties), it's easy to build up big coffee new product numbers. New coffees from major roasters such as Kraft's Maxwell House (Flavored Ground and Cafe Symphony instant coffees) and Procter & Gamble's Folgers (Colombian Supreme) also contributed. There also were a variety of new coffee flavoring syrups in 1995.