Roisín O’Sullivan, Madrid Office, Bord Bia – Irish Food Board

According to Kantar Worldpanel Innovation Radar, the number of successful product innovations decreased in 2015 in Spain, despite the fact that there were a larger number of innovations launched that year. The number of innovations grew 9% in 2015 and most of those came from the food (73.1%) and beverage (15.2%) sectors.

Manufacturers lead this innovation. New products with the most success focus on trends similar to those identified in our own consumer lifestyle trends; such as busy lives, health and wellbeing. However the failure rate grew from 55% in 2014 to almost 70% in 2015. Simply put… Innovation doesn’t always guarantee success.

As we have mentioned in previous food alerts, “The average household expenditure in Spain in 2015 was 27,420€, 382€ more than in 2014, which represents an increase of 1.4%”. This development in the economic environment, along with an improvement in consumer confidence in 2015, created an ideal moment for launching new products and new innovations.

Furthermore, according to TNS, 56% of consumers said that they would like to try new products and 47.6% would pay more for a new product. In fact, even when consumers initially were a little price sensitive, they are now slowly changing their buying behaviour and value better quality and larger retailer assortments.

But despite this favourable situation and even when manufactures are taking this opportunity to improve their sales and market presence, there are still many new product innovations that fail in their path towards the consumer:

• Kantar explains that just 1 out of every 5 product innovations is available on the shelves in the main retail chains in Spain; it is difficult to find manufacture’s innovative products in the leading supermarkets such as Mercadona or Lidl as they are discount or private label focused.

• TNS mentions that 35.5% of consumers consider that new products innovations are actually not that different from the existing products and don’t offer the consumer any added value.

• Partnership and collaboration with retailers is one of the keys for success. Depending on the assortment strategy, each retail chain has different approaches to introducing new products. Kantar Innovation Radar mentions the top 5 retailers that support innovation in Spain are: Carrefour, Alcampo, Eroski, Día and Consum.

These studies highlight how important it is to follow the right innovation process and to obtain the best market and consumer knowledge available; no matter where you are based or what country you are trying to target. The Bord Bia Consumer Insight Team work hand in hand with Irish Food and Beverages companies to allow them to better understand consumer behaviours and distributors relationships and offering tips such as the “Insights & Innovation Workbook” that entails an innovation process of seven stages: Groundwork; Exploring; Refining; Viability; Building a Brand; Expression; and Launch to assist them to successfully launch new product innovation that really connect with consumers.

For more information please contact Roisin.OSullivan@Bordbia.ie