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Three quarters of FMCG product launches fail, according to Nielsen research

Published:  09 September, 2014

Over three quarters of all new product launches across the FMCG sector in Europe fail in their first year, according to new Nielsen research.

Fosters Gold was a standout product launchFosters Gold was a standout product launchFosters Gold comes top in Nielsen FMCG new product launch research

Over three quarters of all new product launches across the FMCG sector in Europe fail in their first year, according to new Nielsen research.

It found that only seven products out of 12,000 FMCG launches in Europe since 2011 could be deemed to have been a success, generated sales of over £10 million in year one and maintained 85% of those sales in year two.

Of the seven only one alcohol brand made the cut in its European Breakthrough Innovation Winners for 2014 - Foster's Gold. The other six stand out success stories were Magnum Infinity, Milka Choco Supreme, Mullerlight Greek-style Yogurt,  Lucozade Energy Pink Lemonade, Oral-B Pro-Expert All-Around Protection and Sodebo Salade et Compagnie.

The Nielsen report called on brands and producers to change their innovation strategies or risk continuing to lose millions of pounds a year in failed new product development.

It based its finding on four success criteria:

1   Choice: was the innovation right for its market?

2   Process:  did the launch get the innovation right?

3   Marketing: how was the activation strategy implemented?

4   Togetherness: did the launch get the full support of the company and its target customers?

The report found that three-in-four new launches fail to retain a retailer listing beyond their first year.

Johan Sjöstrand, managing director of Nielsen's innovation practice in Europe, and co-author of the report, explained the report's findings: "Through the study process, we found proof that innovation success is never just a remarkable coincidence. It's about deliberate attempts to disrupt all aspects of the innovation process and challenge everyday norms, such as consumer attitudes, long-standing beliefs, launch mechanics, organisational behaviour and disciplines."

He added: "The absence of any one of our four components - choice, process, marketing, togetherness  - no matter how good the other three are, severely limits the possibility of breakthrough success."

The Nielsen Breakthrough Innovation Report for Europe will be available from mid-September to downloaded from Nielsen.com.

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