July 2, 2025  by

The Era of new Product Launches – Why They fail and the Road to Success

Innovation is critical to any brand’s success. This especially holds true in the grocery sector, where food trends evolve relatively quickly, with some lasting longer than others.

Today, innovation is more essential than ever in the Canadian grocery sector:

  1. For the 52-week period ending December’2024, Canada’s CPG sector achieved a mere 1% growth in tonnage.[1]
  2. For the 12-week period ending March 2025, tonnage in traditional grocery was down (1.4%), and in discount banners, tonnage was down (0.2%)[2]
  3. Over the past two years, Canadian national brands have lost close to $600M in sales to private label brands.[3]

Yet, as Mintel reported this past year, true innovation in the global CPG food and beverage market has declined significantly since 2007. In particular,

  1. For the first five months of 2024, only 35% of launches were genuinely “new products”, compared to 65% of new launches being labeled “renovation” i.e. line extensions, reformulations, new packaging. or relaunches.[4]

So, just maybe Mintel’s findings support research that reveals 85% of new products launched in the consumer-packaged goods sector each year fail to survive more than 12 months.[5]

What is the Definition of Innovation?

I raise this question because as noted by Mintel, 65% of new product launches in the CPG sector are “Renovations”. So, what is the definition of Innovation?

“Innovation is “the process of bringing about new ideas, methods, products, services, or solutions that have a significant positive impact and value. It involves transforming creative concepts into tangible outcomes that improve efficiency, and effectiveness, or address unmet needs”.[6] When I read this quotation, the 3 keywords that struck me were “address unmet needs”. I feel this is the true difference between Innovation and Renovation.

Why new product launches fail in Canada

So, why do so many new products fail within the first year? There are often multiple reasons. Here are Food Distribution Guy’s 5 thoughts:

  1. They introduce a “Me Too” Product: Brands that launch a product very similar to an existing popular product already on the market without offering a unique point of difference will fail.
  2. Lack of Marketing and Trade Support: Achieving brand awareness is the first step to establishing brand equity. Do not assume customers will notice and love

it right away. In addition, brands must be prepared to support the trade. In 2024 49.7% of all unit sales were sold on promotion.[7]

  1. Weak Product Packaging: A study by MeadWestvaco revealed packaging drives 36% of purchase decisions[8] Consumers view good design as more trustworthy.
  2. Misaligned Pricing: In today’s market, new product launches must be competitively priced. Most Canadians will only pay 5%-10% more for Canadian-made, while 25% say they cannot afford any price increase.[9]
  3. No Distinct Target Audience: A distinct target audience is critical for effective marketing, and overall business success. “If you try to resonate with everyone, you will resonate with no one”. John Lee Dumas[10]

What are the Keys to Success for New Product Launches?

To develop, launch, and gain adoption of a successful product requires the perfect formula of innovation, perspiration, calculation, and luck. Here are Food Distribution Guy’s 5 suggestions on how to make new product launches successful:

  1. Identify the Problem Your Product Solves: Identify the problem or pain point your product solves for your target market. Identifying the real problem demonstrates market demand for the product.
  2. Create a Compelling Brand Story: The brand’s story is critical in today’s Seventy-nine percent (79%) of brick-and-mortar retail customers are uncommitted.[11] Incorporate your brand story as the primary element of your product packaging or incorporate a QR code.
  3. Identify Where Your Target Audience Shops: Consumers are multi-channel shopping. Analyze where they are most likely to be found online (social media platforms) and in which physical store they shop the most. Remember, 81% of all online searches are unbranded.[12] Ensure key SEO words are associated with your product.
  4. Listen to and Engage in Conversation: Social media has leveled the playing field. It empowers customers by providing a direct channel to interact with businesses, voice opinions, and influence brand perception. Brands that actively listen to and engage in conversation with their customers are most likely to foster increased brand loyalty.
  5. Utilize External Sources: Seventy-two percent (72%) of Canadians like trying new products.[13] This is where trade shows and new product awards give new entrants a boost:
    1. Traditional grocery on your radar screen? Grocery Innovations is Canada’s premier grocery trade show, www.groceryinnovations.com.
    2. The Canadian Grand Prix New Product Awards, presented by the Retail Council of Canada is one of Canada’s premier awards shows, www.rccgrandprix.ca for new product launches.
    3. Just commencing your journey, seek out the One of a Kind Show, www.oneofakindshow.com. Great venue to interact with consumers.

Food Distribution Guy’s Final Thoughts

Product innovation is critical for business growth, competitiveness, and staying relevant in the CPG sector. As noted by Nielsen, in 2022, manufacturers’ growing innovation sales were 1.8X more likely to grow overall sales than those with stagnant or declining innovation sales. [14] When it comes to innovation, patience is a virtue. Get it right the first time. If you don’t thoroughly research and test your product before launching it, you may miss key insights and opportunities. To Canada’s small food entrepreneurs, congratulations. Your new entrants into the Canadian grocery sector are making an impact. For the 52-week period ending February 2025, the small brand’s percentage dollar change was +5.5% vs. +3% overall.[15]

 

[1] Navigating the Road Ahead, Carman Allison, February 2025

[2] 2025 Q1 Inflation: Progress Update, Mike Ljubcic, Nielsen IQ, Grocery Business, May /June 2025

[3] What Will Shape the Year Ahead, Mike Ljubicic, January / February 2025

[4] CPG Food and Beverage Innovation Declines Nearly 50%: Mintel, www.grocerybusiness.ca, July 2024

[5] What Percentage of New Products Fail? www.bplanwriter.com, February 2025

[6] What is Innovation, www.ideascale.com, July 2023

[7] Navigating the Road Ahead, Carman Allison, Nielsen IQ, April 2025

[8] Why Good Design Can Make or Break Your Food and Beverage Business, www.fooddive.com,

[9] Canadians Want Retailers to Highlight Local Products Amid Trade War Threats, www.kpmg.com, February 2025

[10] 50 Empowering Personal Branding Quotes for Your Journey, www.forbes.com

[11] The Majority of Customers are Uncommitted, www.upside.prezly.com, June 2025

[12] Unlocking Canada’s Omnishopper, Carman Allison, Grocery Business, July / August 2024

[13] Boost New Product Awards Give New Products a Needed Boost, www.strategyonline.ca, 2025

[14] Innovation Volatility: The Payoff is Worth the Pursuit, www.nielseniq.com, June 2023

[15] Time for Tariffs, Grocery Business, May /June 2025, Carman Allison, Nielsen IQ

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