One thing’s for sure: we love talking about innovation and how companies love bringing new products to the market.
And recent trends have for sure thrived in such an environment – plant-based, bio, alternative proteins are all market segments that can only survive with innovation at the forefront. But are we really as innovative as we like to point out?
Well, not quite, as some studies seem to suggest that this is a hand that’s been overplayed. According to a recent Mintel study, global Consumer Packaged Goods (CPG) innovation has hit a record low in 2024. The research reveals that “just 35% of global CPG launches across food, drink, household, health, beauty, personal care and pet care are genuinely new products” in the first five months of 2024. This marks the lowest level of innovation since Mintel began tracking new products in 1996.
The study highlights that 65% of launches are merely “renovations” – line extensions, reformulations, new packaging, or relaunches. This decline in innovation coincides with significant price increases by big brands, often without offering additional benefits to consumers. As a result, many consumers are switching to private-label alternatives, with “31% of US adults admitting to buying more store brands over the past two months” as of May 2024.
Mintel’s analysis shows that the innovation drought is most pronounced in North and Latin America, with the US seeing only 29% of CPG launches as new products. In contrast, the Middle East, Africa, and Asia-Pacific regions are leading in CPG innovation, reflecting their faster economic growth and more entrepreneurial mindset.
The study notes that this trend isn’t new, stating that in 2007, the year before the global financial crisis, just over half of global CPG launches were new products – a decade later, this share of innovation had declined to 43%. The study concludes that such creativity has been lacking in recent years, potentially putting the CPG industry at risk in the long term.
So, with all these figures in mind, should we have another look at the market’s innovation rate? Let me know what you think at bogdan.angheluta@trade.media