Identifying future innovation
Editor’s note: Egle Tekutyte is the consultant, products and innovation research and Frida Polyak is the consultant, research at Euromonitor International. To read more about Euromonitor’s findings, click here.
Nearly one third of brands launched in 2022 were discontinued by the end of 2023, revealed market research company Euromonitor International. For businesses, monitoring new launches and their development empowers companies to identify opportunities and invest in innovation strategically. In 2023, Euromonitor detected more than 4,000 new brand launches and over 33,000 new sub-brand launches across the 32 global markets, 50 categories and online retailers on its radar.
From 2021 to 2023, analysts watched more than 11,000 new brands and some 105,000 sub-brands launch onto the global market. Most new launches were line extensions for brands, with almost 3,000 new sub-brands on average launching each month.
Delving into promising test markets
Understanding the most vibrant innovation markets and their significance in product testing before further expansion empowers businesses to make informed choices, optimizing success and mitigating risks tied to new product launches.
Promising markets for introducing and testing new products are those with a sizeable population and a solid middle class indicating consumers’ ability and willingness to spend, a receptive retail environment and a culture to trying new alternatives. Unsurprisingly, in 2023, the countries with the highest number of new product launches globally were the U.S., India, Germany, Brazil, France and the U.K.
With its vast and varied population and significant disposable income, the U.S. stands out as a prime market for testing new products before expanding into others, with 60% of U.S. consumers agreeing that they like to try new products. The U.S. offers an attractive opportunity for companies seeking to gauge product viability and consumer interest.
The U.S. wields considerable global influence, leading the way in consumer trends. Brands that successfully launch new products in this market can gain global recognition and expansion opportunities. However, the environment is also highly competitive. Companies eyeing the U.S. for product launches must assess the potential carefully, considering target industries, consumer demands and competition.
Which product categories have the most potential?
A critical step in the innovation process is assessing product potential by understanding which industry and category holds the best growth opportunity for new products. Closely monitoring industry-specific innovation trends and the competitive landscape gives businesses the knowledge to identify where to play. It also enables them to quickly react to changes in consumer preferences and market demands.
Most launches occur in the health and beauty segment. Multiple factors contribute to the high number of new brands appearing online including the increasing consumer awareness around health and wellness or the growing demand for natural products. The density of competition also serves as a catalyst for innovation as businesses are more encouraged to innovate to capture share and stay ahead of the curve.
Vitamins and dietary supplements (VDS) is an exceptionally dynamic category for new product launches due to consumers embracing a more preventative and holistic approach to their health and wellness and the fragmented nature of its competitive landscape. As a result, companies across the FMCG space turn to VDS for inspiration and to learn how to position attributes and benefits to speak directly to consumers.
Lessons learned from the benefits and positioning of these products can be transported to other categories across the FMCG space as consumers are constantly looking to broaden the products they use to meet their core needs, particularly around wellness and happiness.
The importance of choosing the right retail partner
Tracking new product launches online helps identify retailers with strong visibility and effective promotional tactics. This offers valuable insights for businesses in selecting partners for successful market testing and launches.
Of the retailers covered in Euromonitor International’s Passport Innovation in the 32 countries under review, the top retailers, shown in the chart above, represented nearly one third of all detected new product launches across tracked categories in 2023. This highlights their importance as strategic partners for brands introducing new products to the market. Walmart, the world's largest retailer, holding a 4% share of global retail sales in 2023, also led the way in new product launches during the year. Its focus on the U.S. market, crucial for product debuts and testing, is instrumental in maintaining its dominant position.
Gaining insights that inform innovation strategy
Monitoring new product development in real-time is crucial in understanding where innovation occurs, who the key innovators are, which product attributes resonate with consumers the most and which retailer’s businesses are creating partnerships with to launch their products. Learning about the most innovative markets, categories and retailers gives FMCG companies inspiration and helps them identify areas for future innovation within their own business.