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Some retailers have also created programs to pressure manufacturers into making changes in the product characteristics of the items they sell. A recent example is Wal-Mart’s work to encourage suppliers to improve the sustainability of product packaging.8 Although not from the United States, another example is the requirement that ASDA supermarkets (which are owned by Wal-Mart) in the United Kingdom placed on their private label manufacturers to meet certain standards for fat, saturated fat, sugar, and salt in their products and to remove artificial colors and flavors (Hattersley, 2009).

Because a relatively small number of retailers are responsible for a large volume of processed foods sales, they can be the gatekeeper to new product success. If manufacturers are unable to convince major retailers that a new or reformulated product will appeal to consumers or if the company cannot safely take the risk of paying high slotting fees, its product has little chance of succeeding in the marketplace. These factors have become a major consideration in the development and reformulation of processed foods.

Product Development Process

In 2005, 18,722 new food and beverage products were introduced by food manufacturers (Martinez, 2007). The breakdown of these products by type is provided in Table 6-5.

To create new products, the largest processed food manufacturers have

TABLE 6-5 New Product Introductions in 2005

Type of Product

Percentage of Total

Candy, gum, snacks

27.7

Beverages

25.1

Condiments

10.2

Dairy

7.2

Baking ingredients

6.0

Processed meat

5.0

Meals and entrées

4.7

Bakery foods

4.1

Fruit and vegetables

3.4

Pasta and rice

2.2

Soups

1.6

Cereals

1.4

Desserts

0.8

SOURCE: Martinez, 2007.

8

Available online: http://walmartstores.com/Sustainability/9125.aspx (accessed October 12, 2009).



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