Here is a sobering fact for food manufacturers. If you are like the rest of the industry, over half of your new product launches will ultimately fail or at least seriously underperform projections. There are many reasons products fail, however there is one consistent issue we see across product launches that can be addressed.
IBI Data examined multiple foodservice product manufacturers and tracked their launch activity for new products. What we found was that well over 50 percent and often as many as 80 percent of the new slots are lost in the first year. This loss rate is a very big problem because it takes manufacturers both time and money to get a slot set up at a distributor. Yet in many cases, manufacturers don't generate enough throughput to maintain them.
The good news is that this loss rate can be improved by taking the right marketing and sales approach. Marketing for new products often uses a shotgun approach when a rifle is better. National promotions are certainly helpful in supporting product launches, but they can be too spread out to be meaningful. Local support is also needed to gain customers that pull product through a new slot, and it needs to happen in a very specific time frame.
For slots to stick, they need to achieve “critical mass.” Our research has shown that critical mass for a slot can be determined based upon reorder size and frequency. Target numbers can be generated based upon algorithms derived from an analysis of previous launch campaigns. These numbers can then be combined with operator usage data (derived from incentive and trade data) and anticipated conversion rate to determine the number of sales contacts needed to ensure a slot reaches critical mass.
Here's where IBI Data can help. We work with manufacturers to analyze their launch data and put together plans and tracking for their slots to increase the number that reach critical mass. Don't let your product die on the vine! Call us at 877-424-8725 or fill out our contact us form with any questions and to learn more.