New brand launches plummet 18% as pandemic pressures linger

The number of new brands launched in the packaged food category dipped more than 18% globally between 2021 and 2022, according to data from Euromonitor International.

Nina Valenti, consultant at Euromonitor International, attributes the sluggish innovation in the space to issues that erupted during the Covid-19 pandemic and continued to affect businesses in the following years.

“[The years] 2021 and 2022 saw limited innovation as Covid-related pressures lingered, such as a limited workforce, supply chain bottlenecks and economic concerns that contributed to innovation stagnation,” she said.

In lieu of new brand launches, packaged food businesses were apt to reformulate existing products in an effort to utilize alternative, lower-priced ingredients that minimized the impact of rising costs, Euromonitor reported.

Similarly, companies have been more likely to focus on expanding existing brands rather than launching new brands. Common targets for expansion and investment by packaged food brands have been private label and budget lines, which have become more popular among consumers looking to combat inflation at the grocery store.

“Many companies have decided that it is more important to keep their core brands alive and reliably in stock, rather than maintain a wide assortment and variety,” Valenti explained.

Euromonitor pointed to one subcategory that has seen a notable decrease in new brand activity: meat and seafood alternatives. This sector saw a 40% decrease in new launches compared to the year prior.

Higher price points that deter budget-savvy shoppers and market saturation following years of “intense innovation” are to blame for the slowing in the plant-based and alternatives market, Euromonitor reported.

Innovation in snacks remains high

Despite an overall slow-down of new launches in packaged foods, some categories, namely snacks categories, continue to see innovation and engagement.

Nearly two-thirds of new packaged food brand and sub-brand launches monitored by Euromonitor’s product innovation tracker in 2022 were in snacks categories, including chocolate confectionery, sweet biscuits and salty snacks.

“Snacks stand out in the packaged food category as a subcategory compared to its peers over the last three years, primarily due to shifting consumer need states and spaces,” Valenti said. “Consumers have shifted how and why they choose products, from the blurring between snacks and meals, affordability concerns that have required brands to be flexible in product ingredients and packaging, and permissible indulgences, such as small-packaged forms of sweets.”

A recent report found 41% of consumers said their last snack was indulgent. About half of consumers (49%) also feel snacking is part of a healthy lifestyle.

Importantly, the innovations tracked by Euromonitor include packaging innovations, in addition to product innovations.

“This could include sustainability, health and wellness claims and shrinkflation, as well as simple packaging changes to stay fresh for consumers,” Valenti explained.