Consumer convenience drives product development

Convenience, which dominated growth in global product categories form 2003 to 2004, will drive new product development in the next 12 months. Drinkable yoghurts, sugar substitutes and pre-prepared foods all enjoyed year on year double-digit growth, reports Lindsey Partos.

But health topped the polls, with soy-based drinks pulling in 31 per cent growth, finds a new report from US market analysts ACNielsen.

"Food and beverage companies that develop healthy products which also meet consumer demand for good taste and convenience will find a receptive market for these products," says Jane Perrin at ACNielsen and author of the report.

While health is clearly behind a raft of new product developments, food makers must not lose sight that convenience is just as important to the consumer. And that health is far from dictating the actual content of the convenience food and beverages.

According to the ACNielsen report, for example, with 10 per cent year on year growth, sales for refrigerated pre-prepared meals, are far from flagging.

Salad dressings enjoyed 9 per cent global growth and cocoa, chocolate and malted drinks showed 8 per cent growth.

Refrigerated desserts and edible oils both experienced 7 per cent growth from 2003 to 2004, followed by shelf-stable cakes and frozen pizza, both with decent rise of 6 per cent, year on year.

Reflecting the low carb - high protein trend, that particularly took hold of the US in 2003/04 period but appears to be now losing steam, eggs experienced high growth of 16 per cent, the third strongest product category, of all those researched, behind drinkable yoghurts and soy-based drinks.

Overall, the global growth rate for the 89 categories in the 59 global markets studied by ACNielsen came in at a 4 per cent. This relatively low growth rate was largely influenced by the slow growth rates of the larger, more developed markets of Europe, up just 2 per cent, and North America with a rise of 4 per cent.

Growth was much stronger in some of the smaller, less developed economic regions. In the emerging markets region, that includes Hungary, Croatia, Estonia and Morocco, the total growth rate was a hefty 10 per cent, with more than one-third of the categories experiencing double-digit growth, although they're coming from a small base.

For example, the cereal/muesli/fruit Bar category grew by +47 per cent in this region.

"Global marketers of food and beverage products need to ensure that they are positioned to capture the many growth opportunities that exist in these developing markets, or risk being left behind," noted Perrin.

The analyst added that consumer interest in high-protein/low-carbohydrate diets, that at its peak had an estimated 30 million US followers, was a major factor in category growth. Eggs, for instance, grew 16 per cent globally, while none of the 10 "non-sweet carbohydrates" categories grew by more than 4 per cent.

One former star category that seems to be fading is prepared alcoholic beverages (such as "malternatives"). Identified as the fastest-growing global category in the 2002 study, up 33 per cent, it is now only growing at 2 per cent, well below the rate of those that made the 2004 hot growth list.

"Product innovation can drive excitement and trial in categories, but only those enhancements that meet more sustainable consumer needs, particularly health and convenience, will enjoy long-term success," concluded Perrin.