You may be noticing a bit more of a thoughtful pause coming from shoppers in the grocery and retail aisles these days. That very pause is causing today’s CPG and Retailer’s hearts to skip a beat.
This is the impact of the 40-year high inflation. The dramatic price increases are forcing consumers to recast their behavior to match the dynamics of today’s environment.
In Q1 2022 alone, we saw a 5.5% overall inflation rate in Datasembly’s Grocery Price index and 4.9% in Q2.
While consumers rethink their traditional buying habits, CPG and Retailers are working hard and investing in innovation with hopes of winning their share of the shopping cart.
To protect current share and ensure a best foot forward approach with these consumers, both CPGs and Retailers are driving innovation with new product introductions in the form of brand extensions, new sizing, and entirely new products. In one of the more active new product categories, Breakfast Cereal, we saw numerous introductions through the Spring, with a spike in June of over 60 new products. An unusual fact in this spike is that 28% of those new product introductions were private label items from six major retailers.
National brands in Breakfast Cereal, Snack Crackers and Soda categories combined to introduce 140 new product introductions over the Summer, with 15 so far this month!
These are controlled launches at key anchor stores in specific regions, making these launches hard to spot. Whether you monitor new products for net weight, size, strategy, or innovation; real-time hyper-local is the only data source that can illustrate these important changes “as-they-happen,” and can give you an edge in this high stakes competition.
The example below, shows the introduction of a reduced size in Instant Grits, which grew in distribution from its time of introduction in July to August. Without real-time data, this change in size is likely to go unnoticed or be overlooked.
Retailers are contributing to the momentum as well with new innovation in Private Label (PL) products.
In fact, of the new product introductions in August, PL represents 14.8% of the total, with the Snack Cracker category leading the way.
We’re seeing a number of entries from large players like Target and Kroger as they continue to pursue greater household penetration leveraging the tailwind market dynamics associated with today’s inflationary impacts.
Leading CPGs and Retailers are moving faster than ever to stake their claim and leaning into new data sources to enhance their go-to-market, especially with their competitive intelligence around new product introductions.
Equally, many leading CPGs are testing and preparing for upgrades to their current data solution not only to better help them understand the changing product landscape, but they are tapping into real-time, hyper local data to create a more predictable and prescriptive capability as they head into planning season to create advantages across the backdrop of the most dynamic environment they have faced yet.