There are many reasons why food and grocery companies should be prioritising a commitment to research and development, and increasing support for new product launches.

Here, we draw on findings from IGD's latest report, Shopper-led Product and Range Innovation, to explore why product innovation is a growing priority for food and grocery companies and what types of new product shoppers are being attracted to.
 

	Almost half of British shoppers are on the look out for new products

Innovation is a key priority

• British shoppers still have an appetite for new products. Our new research reveals that despite the recession, British shoppers remain as open to buying new food and grocery products as they were five years ago. Almost half of British shoppers (46%) are actively seeking or keeping an eye out for new products when shopping. This is remarkably consistent to research conducted in 2005 (47%).

• New product launches are back on retailers’ agenda. Four in ten retailers (41%) now regard new product launches as one of the top three priorities for their trading relationships. This is a significant increase from 12% in 2009, although remains below the 2008 level of 58% (source: IGD’s Maximising the Impact of Trading Relationships report, April 2010)

• Very few British shoppers recognise product innovation as a key strength for either branded manufacturers or private label ranges. In research conducted last year, one in twelve shoppers (8%) told us that brands are generally at the forefront of new ideas, taste and flavours, and one in twenty (5%) attributed this strength to private label ranges (source: IGD’s Private Label vs. Brands report, May 2009).

It is important, however, to understand the evolved needs and expectations of the post-recession shopper, in order to best direct their innovation investment.
 

Product features that attract shoppers

Our latest shopper research identified the product features that are encouraging new product trial. In summary the list of new product features can be categorised into three groups: value, values and design.

The following chart summarises the relative prominence of these broad themes in attracting shoppers to buy a new product. It also illustrates the proportion of shoppers who identify multiple themes as integral for new product trial.

There are a number of key insights that we identified from analysis of this data.

Value

New products that offer added value through functional benefits are best positioned for attracting trial:

• Delivering better value for money is the biggest driver of new product trial, attracting almost six in ten (59%) British shoppers
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• Functional benefits make up four of the five most common features attracting British shoppers to new grocery products; including new products that claim to be healthier, better quality, perform better and make life easier

Design

Design features have a significant role to play in providing interest and excitement to grocery shopping:

• Providing a novel design feature is the second most common reason for buying a new product, attracting around four in ten (41%) shoppers
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• This is particularly compelling to more frequent new product purchasers, with ‘interesting flavours, smells and recipes’ and ‘something completely different’ featuring in the top four among those who can recall buying a new grocery product in the past six months

IGD's new report Download a free sample extract

Values

New products that purport values based credentials often need to also demonstrate enhanced value for money:

• Values are important to around three in ten (31%) British shoppers when buying something new. Three quarters of these shoppers are also motivated by strong value perceptions, representing a quarter (24%) of all shoppers.

Future focus

The role of new product development has evolved considerably over the last few years. Questions need to be asked to ensure that future product innovation serves the current and likely future emphasis of trading relationships, and addresses the evolved needs and expectations of the post-recession shopper. For example:

• Does your NPD pipeline reflect the desire for functional benefits that deliver enhanced value for money?
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• Do your line extensions and new variants help to increment category sales or at least maintain interest and engagement with regular category shoppers?
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• Do any new ethics based propositions demonstrate value as well as values?

These and other related topics are explored further in IGD’s recently published Shopper-led Product and Range Innovation report.
 

More information:

	Shopper-led Product and Range Innovation
	Published in June 2010, this new research will help you optimise your NPD investment by understanding shopper attitudes towards new products. Download sample slides and find out more here.

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Tim Maton is a Senior Consumer Analyst with IGD, with a wealth of experience in providing shopper insight to a broad range of retailers and manufacturers, including many leading players in the food and grocery sector.

Tim's most recently authored IGD reports include Shopper-led Product and Range Innovation, Social Sustainability – The New Competitive Frontier, Private Label vs. Brands - The Shopper Perspective and The Future of Discounters - The Shopper Perspective.