2024 was not a good year for innovation in the world of food & FMCG. Never before have manufacturers launched so few new products as last year. The Dutch trade magazine Distrifood had even decided, for the first time in its history, not to award a top prize for the best innovation because there were too few candidates to choose from. Line extensions and new flavours dominated last year, while radical innovations often fell short. Will 2025 be another year like that? There are some clear signs that this year will be different. In this newsletter, I therefore take you through my three predictions for 2025. All these predictions are based on our expertise in validating product and packaging innovations in retail. Wondering what the innovation trends of 2025 are going to be? Then this newsletter is for you!
Will 2025 be the year of real innovation?
As I said, 2024 was not a good year in terms of new product launches in our industry. Last year, only a quarter of all launches were truly new products. All the remaining launches were ‘renovation projects’ such as line extensions, reformulations and new packaging. The question, of course, is: will this be different in 2025? Will this be the year when manufacturers hit the innovation accelerator again? Unfortunately, I don't think so. Since 2007, the number of radical innovations in the food sector has been declining, and this trend is not expected to reverse any time soon. Most manufacturers lately prefer to play it ‘safe’ by introducing new packaging and reformulations, for example, rather than radical new concepts. By doing so, they run less financial risk and still offer consumers a new but familiar choice. My expectation for 2025 is therefore that the major manufacturers will continue to focus mainly on renovation projects.
The rise of co-branded products
More and more often, two separate food brands are joining forces to launch a new product together. This kind of co-branding is gaining popularity, and for good reason. There are little to no downsides to such collaborations, while there are a plethora of potential benefits, such as additional media exposure, the transfer of positive brand associations and ‘sharing’ each other's customer groups. We at Bamboo Brands also notice that co-branding is becoming increasingly popular within the food & FMCG sector. We are increasingly testing co-branded products with consumers in our network of supermarkets for our customers. And we almost always draw the same conclusion: most consumers prefer the co-branded product to the product without co-branding (even if the product is completely identical). Therefore, I think 2025 will be the year when we will see more co-branding initiatives come by!
A great example of a recent co-branding launch is the collaboration between Verstegen and Upfront with their new spice products.
Expect many sustainable renovation projects
Sustainability will continue to play an important role on the agendas of many food & FMCG professionals in 2025. The CSRD law requires manufacturers to report extensively on their impact on the world. Companies that are not sustainable enough or do not follow the guidelines risk financial penalties. This is forcing many manufacturers to take a critical look at their own sustainability impact. For instance, there are plenty of opportunities to reduce the footprint within their existing product portfolio. One way to do this is by replacing a brand's old plastic packaging with a more sustainable alternative. More and more manufacturers are switching to sustainable packaging for their brands. Since 2007, in fact, the number of new packaging launches has increased by over 170%! As the demand for sustainability continues to grow, I expect we will see more and more of this kind of packaging projects in 2025 as well.
But there is a big risk associated with these kinds of sustainable packaging projects: research shows that 70% of all new packaging results in a drop in sales. Many food professionals struggle with this and do not know how to properly overcome this risk. Fortunately, it is totally possible to launch new packaging without any financial risk. All you need is the right knowledge and know-how!
The share of new packaging launches has increased significantly since 2007 and continues to rise every year (source: Mintel)
Webinar: launching sustainable packaging in retail
Are you considering switching to sustainable packaging for your brand, but not yet sure what effect this will have on sales? Then sign up for our webinar on Thursday 30 January! In just 40 minutes, you will learn all about how best to launch sustainable packaging in retail. Click here to find out more.
