Consumers in the food and beverage industry seek innovation even in times of economic uncertainty, a sentiment validated by Circana’s 2024 New Product Pacesetters report.
Let’s break down some of the report’s key findings, including what has shaped the CPG landscape from elevated at-home experiences to high protein to wellness and functionality:
Power of Protein: With the “Ozempic Era” in full swing and a push for high-protein products infiltrating the CPG space, Circana deemed 2024 “the year of protein.” Ready-to-drink, powder formats and supplements posted 18% dollar gains last year.
Protein-rich innovations span every daypart, from snacks (Too Good & Co yogurt-cultured smoothies) to sweet treats to breakfast cereals (Magic Spoon).
Circana’s New Product Survey found that 32% of consumers are looking for new food products to meet their protein consumption goals, a 6% increase from 2021.
Functional Flood: Energy and sports drinks have historically ranked high on the Pacesetters list, but the 2024 roster shows a focus on multiple benefits elevates them further. Nearly 33% of consumers seek benefits beyond basic nutrition, including functional additives.
Beyond beverages,REV GUM is a prime example of functional benefits extending into new use occasions. The performance energy gum has reached over 20,000 retail locations in under five years.
Restaurant to Retail: As inflation persists, cash-strapped consumers are cooking at home at the highest levels since the pandemic. Circana data indicates that 21% of shoppers are seeking restaurant-quality new food products to prepare at home.
Restaurant-branded retail growth outpaced total F&B growth between 2019 and 2024, totaling nearly $12 billion in sales.
In Brands We Trust: Manufacturers and brand owners alike are recognizing the restaurant-to-retail advantage and are making their own play with licensing and co-branding, including Jack Link’s Frito Lay Flamin’ Hot Beef Jerky.
Licensing is a $365 billion global business, with F&B representing just over 10%, or $18.5 billion in revenue. What’s more, more than 75% of consumers say past experience with a brand will influence their purchase of a new product.
To properly leverage licensing opportunities, brands should “invite consumers to extend their love for one entity to products that bear the same character, game or other licensed property,” per the report.
What is the recipe for success for becoming a product pacesetter? According to Circana, being a pacesetter means meeting evolving consumer needs and delivering quality products and experiences that earn repeat purchases. This includes taking a broad view of the market to identify additional whitespace post-launch.
However, being a pacesetter doesn’t guarantee success. Cultivating and driving new buyers into year two and beyond predicts sustainability, per the report, as nearly one-third of trial happens beyond year one.
“There’s no rest for innovation, success requires a continuous build on the initial product assortment with new flavors and forms to meet evolving interests and consumers’ desire for variety,” reads the report.
