For years, nimble startup companies and emerging brands have outmaneuvered and, some may say, done a better job at product innovation than Big Food counterparts. However, when the pandemic hit, it totally changed the dynamics in the market.
“Retailers don’t want to mess around with all of that assortment because of all of the out-of-stock issues that they’re having,” said Todd Hale, principal, Todd Hale LLC, during a recent webinar sponsored by the American Bakers Association. “They want to have products on the shelves that deliver to the largest array of shoppers possible and meet much higher demand. If you’re thinking about how to innovate and how to get a new product on the shelf, I think in the next six months to a year, it’s going to be a tough conversation getting those into the doors in retail because they’re focusing on winning with the least impact on their overall operations.”
Tom Vierhile, vice president of strategic insights, North America, Innova Market Insights, also told Baking & Snack magazine that the pandemic’s influence on consumer shopping and on new product innovation could be dramatic.
“We’re likely on the cusp of experiencing the biggest one-year drop in new product launches that any of us have ever seen,” Mr. Vierhile said. “Packaged food companies are trying to streamline operations and focus on their volume champions right now, so new product plans are being delayed and shelved and marketing funds are drying up.”
When it comes to new products, time will benefit those innovative companies with strong financial support needed to make it through this transitional period and come out stronger in the end.