Commentary

Nielsen: 85 percent of new products fail in the marketplace

Anheuser-Busch learns from mistakes to build effective Ritas portfolio

For consumer packaged goods (CPG) companies, it’s a bit scary to hear the Nielsen statistic that more than 85 percent of new CPG products fail in the marketplace. Looking at the beverage industry in particular, nearly 1,800 new drinks launched in the U.S. market in 2013, according to Mintel’s Global New Products Database. If that 85 percent statistic holds true, that would mean that more than 1,500 of these beverages will fail. While nothing is set in stone, it’s clear that launching a successful new product is no easy task.

Nevertheless, companies continue to anticipate consumer needs and launch new products to meet them. As they do so, many of them often study failures of their own and others in order to find success. For instance, Anheuser-Busch did just that when developing its Bud Light Lime Ritas lineup. In Nielsen’s “June Breakthrough Innovations Report,” the beer-maker noted that, prior to launching its Margarita concept, it had attempted to enter the premixed Margarita segment and failed because it tried to mimic other brands in the segment. As a result, the company learned that if a new product doesn’t change the category, then there’s no point in making it, Anheuser-Busch Vice President of Innovation Pat McGauley said in the report. Now boasting triple-digit growth, its Ritas line brings new consumers into the beer category and also brings the product into new drinking occasions where beer previously was absent, he said.

 “We learn from our failures,” McGauley said in the report. “If you’re not failing some of the time, you’re not pushing the limits. Failure is no fun, but it’s necessary and valuable if you learn from it.” 

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