IRI FINDS FRESH IDEAS REAP BIGGEST PAYOFFS FOR NEW PRODUCTS

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[chicago] The vast majority of new products are line extensions, but the biggest payoff comes from introducing truly new concepts or brand names.

That's the conclusion of Carol Elitov, exec VP-general manager of Information Resources Inc.'s New Product Solution Center, who unveiled research at the Food Marketing Institute's annual supermarket show.

BIG REWARDS FOR NEW IDEAS

According to IRI's figures, 85% of all new food products last year were extensions, as were 76% of non-food introductions. Yet, truly new products reap an average of $41 million in dollar sales as compared to $27 million for line extensions, Ms. Elitov said.

Products that offer a new benefit-even if marketed under an existing product name-appear to have been the most successful last year. Ms. Elitov cited Frito-Lay's Baked Lay's potato crisps, a $167 million product; Kraft Foods' DiGiorno Rising Crust Pizza ($120 million); and S.C. Johnson & Son's Glade Candle Scents room freshener ($110 million) as examples.

Pure line extensions fared less well, IRI said, citing Procter & Gamble Co.'s Bounty Medleys paper towels ($126 million); S.C. Johnson's Drano Max drain cleaner ($25 million); and Kellogg Co.'s Honey Crunch Corn Flakes cereal ($24 million).

Despite this, most marketers appear to lean toward the extensions. While P&G led the pack of marketers introducing new products last year, with 11 products totaling $869 million in sales, 10 of those were line or brand extensions. Kimberly-Clark Corp.'s eight new products were all line extensions, contributing $484 million in sales, as were Philip Morris Cos.' 11 entries with $415 million in sales.

2 FROM J&J, WARNER

Of the top 10 new-product marketers last year, only two companies-Johnson & Johnson and Warner-Lambert Co.-came up with more than one totally new product, each with two.

IRI's top 10 new products last year, ranked by dollar sales: P&G's Luvs Stretch disposable diapers, with $435 million; Scott Paper Co.'s Scott 1000 toilet tissue, $309 million; Johnson & Johnson/Merck's Pepcid AC acid blocker, $248 million; SmithKline Beecham's Nicorette smoking cessation gum, $189 million; Baked Lay's, $167 million; P&G's Pampers Premium disposable diapers, $162 million; SmithKline's Tagamet HB/200 acid blocker, $155 million; P&G's Bounty Medleys paper towels, $126 million; DiGiorno Pizza, $120 million; and Warner-Lambert's Zantac 75 acid blocker, $116 million.

IRI said 40% of new food products introduced last year were in the light or "better for you" category. But the trend appears to be on the downswing; the 10,206 low-fat or "better for you" entries in '96 were down 1.3% from 1995's 10,343, the first such decline since 1992.

Buyers of "better for you" lines tend to be older consumers. On an index of 100, consumers aged 65- plus indexed 144 for light products while consumers aged 55-64 indexed at 110.

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