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Image: Food Markets & Prices

New Products

New U.S. food and beverage product introductions in retail outlets, as tracked by Datamonitor, have followed an upward trend since the early 1990s, exceeding those of nonfood grocery items in most years. In response to competition from Wal-Mart and other nontraditional foodstores, supermarkets have increased their product choices.

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Between 2008 and 2009, the number of new food and beverage products in retail outlets fell from 22,561 to 19,029, following a decline from the previous year-to-year period (from 23,838 in 2007 to 22,561 in 2008). The 2008-2009 decline marked the first consecutive year-to-year reduction in new food product introductions since 2002, and only the third such decline since 1993. The trend since 2007 in new food and beverage product introductions falls below the trend in nonfood grocery items.

As credit conditions have tightened, retailers have found that eliminating certain products could increase sales and profits, due in part to reducing inventories. In addition, the recession has prompted consumers to seek familiar products and avoid impulse buying. To appeal to bargain-seeking customers who want to simplify their shopping trips as well as purchase familiar products, retailers reduced the number of products introduced. In response, some manufacturers reduced their product lines. In 2010, however, the number of new food and beverage products rebounded to 21,528, though still remaining below nonfood product introductions.

In 2010, food categories with the largest shares of overall new product introductions included candy, gum, and snacks; beverages; condiments; and processed meat. However, from 2006 to 2010, the share of new candy, gum, and snack product introductions declined, while the share of new  fruit and vegetables, dairy products, and cereals increased.

New food and beverage product introductions, by product type, 2006-10*
 20062007200820092010
New products (number) 19,883 23,838 22,561 19,029 21,528
Candy, gum, and snacks 29.7 29.3 26.6 25.5 25.8
Beverages 24.7 18.9 23.1 21.3 21.0
Condiments 7.5 11.2 8.7 9.7 8.8
Processed meat 7.9 8.7 8.5 7.2 7.8
Fruit and vegetables 5.1 4.9 5.1 6.5 6.9
Meals and entrees 5.3 6.4 6.6 6.7 6.2
Dairy 5.4 4.8 4.7 4.8 5.9
Bakery foods 3.7 3.5 3.9 4.5 4.4
Pasta and rice 3.1 3.8 4.0 4.2 4.2
Baking ingredients 3.3 3.4 3.6 3.0 3.1
Cereals 1.8 1.7 1.6 1.8 2.0
Desserts 0.9 1.1 0.9 1.6 1.2
Baby food 0.4 1.0 1.0 1.3 1.0
Soups 0.9 0.9 0.8 1.0 1.0
Meal replacements and special diet foods 0.3 0.4 0.3 0.4 0.4
*Percent of total.
Source: Datamonitor.

Advertisements touting a product's attributes are conveyed on packages and in supporting literature. Based on new product tags or claims (such as "organic") tracked by Datamonitor, over 100 U.S. food and beverage new product claims or tags were identified in 2010. Health and convenience-related attributes accounted for 8 of the top 10 claim categories, and these 8 claims accounted for one-third of all new product claims. Four categories, including "natural," "organic," "single serving," and "fresh," have ranked among the top 10 claims in every year since 2001.

Number of new product introductions in the top 10 product claim categories for 2003-10*
Tag or claim**20032004200520062007200820092010
Natural 1,380 1,364 1,596 1,664 2,335 2,123 1,894 2,145
Premium 1,589 1,546 2,071 2,645 3,552 3,362 2,336 1,800
Private label 428 275 290 414 734 740 810 1,600
Single serving 1,127 1,103 1,264 1,399 1,553 1,523 1,344 1,462
High-vitamins/minerals 687 707 759 805 922 994 758 986
No gluten 159 175 239 250 397 466 552 876
No preservatives 578 547 545 586 850 807 758 870
Organic 559 533 668 738 1,110 1,042 775 822
Fresh 556 597 690 700 952 918 799 808
Low/no fat 656 607 639 608 683 620 543 709
Total new product claims 16,374 17,629 19,261 20,459 26,263 25,012 22,483 25,640
*Does not include associated stock keeping units (SKUs, or variations in size and form). According to Datamonitor, the SKU count may produce erroneous results because a single new product introduction can have multiple SKUs, and each of these SKUs may or may not have certain package tags.
**A new product may have multiple tags or claims.
Source: Datamonitor.
Percent of new product introductions in the top 10 product claim categories for 2003-10*
Tag or claim**20032004200520062007200820092010
Natural 8.4 7.6 8.3 8.1 8.9 8.5 8.4 8.4
Premium 9.7 8.8 10.8 12.9 13.5 13.4 10.4 7.0
Private label 2.6 1.6 1.5 2.0 2.8 3.0 3.6 6.2
Single serving 6.9 6.2 6.6 6.8 5.9 6.1 6.0 5.7
High-vitamins/minerals 4.2 4.0 3.9 3.9 3.5 4.0 3.4 3.8
No gluten 1.0 1.0 1.2 1.2 1.5 1.9 2.5 3.4
No preservatives 3.5 3.1 2.8 2.9 3.2 3.2 3.4 3.4
Organic 3.4 3.0 3.5 3.6 4.2 4.2 3.4 3.2
Fresh 3.4 3.4 3.6 3.4 3.6 3.7 3.6 3.2
Low/no fat 4.0 3.4 3.3 3.0 2.6 2.5 2.4 2.8
*Does not include associated stock keeping units (SKUs, or variations in size and form). According to Datamonitor, the SKU count may produce erroneous results because a single new product introduction can have multiple SKUs, and each of these SKUs may or may not have certain package tags.
**A new product may have multiple tags or claims.
Source: Datamonitor.

In 2010, "no gluten" and "low or no fat" claims replaced "quick" and "no- or low-trans-fat" products in the top 10 claim categories. "No gluten" claims ranked among the top 10 claims for the first time. In addition to controlling celiac disease, other benefits that consumers attribute to gluten-free products are that they are generally healthier, of higher quality, and helpful in managing weight. In 2010, 876 "no gluten" products were introduced, compared with 466 in 2008, 250 in 2006, and 159 in 2003. "Low or no fat" product claims moved into the top 10 claim categories for the first time since 2006.

Private-label products, or store brands, cracked the top 10 claims for the first time in 2007, an increase of over 75 percent from 2006. In 2010, store brands increased twofold over the previous year (2009) and ranked third among all new product claims, accounting for 6.2 percent of new product launches. As retailers have become more adept at creating profitable store brands, these brands have expanded at a faster pace than more expensive national brands. More consumers have turned to private-label foods in the face of the economic downturn and higher gas prices. Demand has also risen due to other factors, such as increasing food-price inflation and the marketing efforts of retailers. Profit margins of store-brand items are, on average, 10 percentage points higher than those of national brands. Store brands can also add to retailers' individuality by offering something new and different, as products are limited to their respective stores.

Over the past two decades, private label food products have grown steadily in sales and often compete directly with national brands for market share. For an analysis of the relationship between private label and national brand product prices, see The Relationship Between National Brand and Private Label Food Products: Prices, Promotions, Recessions, and Recoveries.

Last updated: Thursday, October 30, 2014

For more information contact: Stephen Martinez