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NEWS21 November 2013

£600m wasted on development of ‘zombie’ products, says TNS

UK

UK — The food and drinks industry is wasting £600m a year developing ‘zombie’ or ‘cannibal’ products that eat into the profits of existing brands while delivering “minimal franchise growth”.

That’s according to TNS, which analysed purchase data for 3,500 new products over a five-year period to November 2011.

It said 60% of launches fit the definition of ‘zombie’ or ‘cannibal’ products: the former failing to provide long-term growth and acting as a ‘dead weight’ on companies, while the latter transfer customers from other products in the portfolio, not only failing to provide top-line growth but often leading to brand decline.

According to the Food and Drink Federation, the industry invested over £1bn on new product R&D in 2011 – the final year of the TNS study. If 60% of products are zombies or cannibals, that works out to some £600m in investment wasted, said TNS.

“Too many businesses are spending huge amounts of money on quasi innovation that only convinces existing customers to swap within their range,” said Phil Sutcliffe, managing director IPD UK at TNS. “The key to unlocking true growth is to focus on genuine innovations that will draw in brand new customers or lead to greater frequency of use by existing customers.”

TNS cites McCain’s ready-baked jacket potatoes as an example of a new product that delivered sales that were incremental to the existing franchise. On the other hand, Pringles’ new Xtreme range generated significant sales, but heavily cannibalised the brand’s existing products.

@RESEARCH LIVE

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