New products generate $21 billion in 2008
Survey confirms strength of ethical and sustainable packaging trend
Dairy product demand increases globally

New products generate $21 billion in 2008

Number of new products remains stable compared to 2007, but sales increase.

According to aNielsen reportreleased Jan. 30, 122,743 new universal product codes (UPCs) were sold through U.S. grocery, drug and mass merchandiser channels, excluding Wal-Mart. Of these, 39% represented food and beverage items, 29% included general merchandise items, including such as DVDs, 20% were health and beauty items and the remaining 12% came from non-food grocery categories like paper products, diapers and detergent.

Those categories that saw the greatest number of new product launches were cosmetics, candy, paper products, and bread and baked goods. The snack category, which included 3,619 new products, generated the highest sales and represented 18.2% of all snack sales in 2008. Candy, bread and baked goods and snacks are key markets for flexible packaging.

Although the number of new items introduced in 2008 remained about the same from 2007 (122,743 versus 122,530), they generated 6.6% more sales.

“The consumer shift to private-label items requires that brands innovate and add new features to win back shoppers,” explains Tom Pirovano, Director of Industry Insight at Nielsen. “It is difficult to predict the year ahead, but we expect new products to have more health and wellness claims, additional package size adjustments and more premium private-label products.”

Survey confirms strength of ethical and sustainable packaging trend

Majority of industry executives surveyed see recyclable packaging as an important innovation in the future.

More than half (53.5%) of industry executives believe that recyclable packaging will be significantly important or the most important ethical packaging innovation over the next five years, saysTrends in Ethical and Sustainable Packaging,a report released by Business Insights. The report also indicated that 37.5% of respondents believe that reduced packaging will be the most important driver. That bodes well for converters, since flexible packaging makes the strongest case for reducing packaging materials, especially when replacing rigid containers.

While neither sustainable and recyclable packaging nor material reduction are new trends, the report confirms that companies are realizing the importance of responding to consumer concerns for the environment by investing in the claim. In that vein, the survey found that 58.9% of industry executives rated concerns about the environment as the most important driver in influencing consumers to purchase food and drink packaged in ethical and sustainable packaging.

Dairy product demand increases globally

Cheese takes top spot, followed by ice cream and spoonable yogurt.

Worldwide demand for dairy products increased 15% from 40.9 million tons in 2003 to an estimated 47 million tons in 2008, says a report from food and drink consultant Zenith International.

According to the2008 Global Dairy Products report, cheese accounts for the largest segment of the dairy sector: Across the globe, 18.2 million tons, or 39% of the total dairy products, were consumed in 2008. Films represent the majority of cheese packaging.

Ice cream ranked second at 14.3 million tons and represented a 30% share, followed by 9.9 million tons of spoonable yogurt making up 21% of dairy’s volume. While not much flexible packaging is used in the ice cream market, foil lidding is widely used in spoonable yogurt packages. Forecasts through 2012 indicate a continued increase in dairy demand of 10% to 51.8 million tons, with spoonable yogurt growing by as much as 16%.

The Zenith report identifies a number of economic and market factors influencing consumption patterns, including:
- growing populations and prosperity leading to greater demand;
- rising costs and climate change causing supply instability;
- consumers placing more emphasis on functionality in dairy products, along with convenience and healthy indulgence; and
- government policies and industry marketing improving the perception of dairy products and their environmental impact.

Chemical Market Associates Inc.
DeWitt & Co. Inc.
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