CPGs Hope New Products Will Jump Start Sales

February 23, 2010

Consumer packaged goods companies are focusing on product innovation and new products, hoping additional variety and price points will lure recession-weary customers to buy again.

At the Consumer Analyst Group of New York conference this past week many companies such as Procter & Gamble, ConAgra and Church & Dwight Co. reported that their new product pipelines are the strongest they’ve ever been, according to a Reuters report.

"I like the innovation. I'm just still a little nervous about the consumer," RBC Capital Markets analyst Jason Gere told Reuters. "I don't know if it's going to invigorate category growth quite yet. I think you need to see the consumer willing to trade up."

Some CPG companies are focusing on new products that will be difficult for store brands to duplicate. Gary Rodkin, CEO of ConAgra Foods said his company is focusing on “technology-driven products where it can get patents that will slow down the introduction of copycats,” Reuters reported.

Another CPG focus is trying to weaning budget-conscious shoppers off promotional discounts.

"It is still going to be tough out there for at least a quarter or so" to get people to buy, JP Morgan analyst John Faucher told Reuters.

Another challenge is finding the ideal price for new products. Last year consumers rebuffed Clorox Co.’s premium priced Green Works natural laundry detergent. CEO Don Knauss conceded the brand “got too pricey" and is dropping the price from $9.99 to $6.99 for a 45-ounce bottle.

"Top line growth is obviously paramount in everybody's mind now. From the investment community, everybody is looking for who's got robust top line. You're not going to save your way to glory," Knauss said. "You've got to grow."

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Keywords: business, church & dwight, clorox co., companies, conagra, consumer packaged goods, cpg, food and beverage, green works, industry, markets, private label trends, procter & gamble, store brand trends

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