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PARSIPPANY, N.J. -- Good things may come to some who wait, but not for Consumer Packaged Goods (CPG) manufacturers and retailers introducing new products, according to a recent study conducted by Edgewood Consulting Group and the Voluntary Inter-Industry Commerce Solutions Association (VICS), and sponsored by Cadbury Adams USA LLC here.
The study concludes that speed-to-market on new products -- considered the "lifeblood of the CPG industry" -- improves retail earnings and also translates to higher ratings for retail equity.
In youth-oriented, dynamic categories like gum and mints on the front end, new products introduced in the last two-and-a-half years already represent nearly 40 percent of sales, the study found.
Additionally, faster launches enjoy higher sales both initially and ongoing; launches that are too slow to benefit from manufacturers' trial-generating activity lose out on significant initial sales and suffer an ongoing velocity gap of 23 percent to 30 percent.
What's more, a tremendous opportunity exists for payback in higher sales (potential +$100 million per year, or +2.5 percent of total category sales) with more consistently rapid speed-to-market in the gum and mints category alone.
Cadbury Adams commissioned Edgewood to conduct an analysis of major U.S. food, drug, mass, and convenience store retailers, and wholesalers. The study identified the best practices that enable retailers and manufacturers to collaborate at headquarters, supply chain, and retail to generate best practice sales and banner equity results.
In response to the study findings, Cadbury Adams has introduced a program designed to help achieve best practice speed-to-market results. The program is called Speed-to-Market Collaboration for Retail Effectiveness (SCORE).