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June 14, 2019

Is Big-Brand CPG Dominance Over?

Scott Cooter
Scott Cooter Creative Director / Senior Copywriter

The new IRI New Product Pacesetters report is out. And although their findings indicate mass market is still in decline overall, it seems that smartly targeted markets are growing. And that has more to do with how accurately the opportunity has been forecast than the size (and depth of the pockets) of the company bringing it to market. Small Companies (annual sales under $1 billion) are doing a better job of understanding how consumer wants and buying practices are evolving, targeting an opportunity, then moving quickly to deliver the right product to the right audience at the right time.

51% of this year’s New Product Pacesetters come from Small Companies, compared to just 22% for Big Company Pacesetters (sales of over $5 billion). And the #1 spot with $124.4M in sales went to Kinder Joy Chocolate Candy from Ferrero USA, beating out M&Ms Caramel from Mars at $120.6M.

Kinder Joy won by bringing something new to the category – fun-to-eat candy with a little spoon, plus an interactive toy to assemble and play with. Although targeted only at millennial moms (a much smaller audience than the M&M crowd), it still came out on top for 2018 — and achieved it with very little dependence on trade promotions to spark trial. And it scored a best-in-category 43.6% repeat rate. The right product at the right time for the right audience, and proof positive a little surprise goes a long way (Kinder Joy’s tagline) when it comes to winning the hearts and dollars of a market audience you’re perfectly in tune with.

This is not to say that all Big Companies are out of touch. Although only a fifth (22%) of New Product Pacesetters on the IRI list come from Big Companies, they generate more than half (54%) of total Pacesetter dollar sales. Mars Inc.’s M&M’s Caramel ($120.6M), General Mills’ Oui by Yoplait ($105M) and PepsiCo/Quaker’s Gatorade Flow ($78.1M) are all perfect examples of Big Companies getting it right.