One on One is a weekly feature offering excerpts of interviews conducted by The Evening Sunwith newsworthy business leaders. Robert M. McMath is director of the New Products Showcase & Learning Center in Ithaca, N.Y., where he presides over the more than 75,000 products he's collected over the past 25 years. In addition, McMath advises corporations on the merits of new products. Q.I was wondering whether, with the recession, if it's worth it for companies to know in advance whether something is going to be successful. How much is that advice worth?
A.Well, it's hard to say. Obviously, nobody wants to waste any dollars. The pace of new product introduction so far has not diminished; in fact, it's gone up. Companies who track this in actual numbers will tell you that new-product production is up between 10 and 17 percent this year from last year, which was a record year. The problem is eight out ten products, that's 80 to 94 percent of new products in the consumables, fail. I'm not talking about statistics on cars or VCRs or cameras and stuff, but on consumables. So, it's worth something for people to understand whether the product's going to go. Unfortunately, companies continue to work in the dark. And when you get into reasons why products fail, you find that in many cases they test products, they do market research, and then either don't interpret the marketing research correctly or in fact they don't ask the right questions in the first place.
Q. What have been some big blunders?
A. Well, Premier cigarettes, which is a smokeless cigarette. Basically, that should have been sold to nonsmokers, and nonsmokers don't need to buy the product. It did not satisfy any of the cravings that people smoke for. You had nothing to do with your hands, you're not wreathed in smoke, and most smokers like that. Even though the nonsmokers say they hate the smell of smoke, the smokers themselves like it. And this product was tested, these things were discovered and they went ahead and came out with the product anyway. That was a $325 million blunder as far as RJR Nabisco was concerned.
Q. Are there some other examples?
A. Well, there are all sorts of things. The milk company, Pet Company, a couple of years ago brought out a line of Italian products. They were, I think, 17 different products. So they spent a lot of money developing this, to try to get into the Italian market. I don't know how much they ultimately spent, but I would think they spent well over $100 million. They subsequently dropped it in favor of buying Progresso.
Q. Generally speaking, what works right now? What really does well?
A. Well, things that are hot buttons at the moment are things that are healthy for you and things with environmental implications. Take the concentrated detergents. People are buying those. They're finally understanding that you can take a quarter of a scoop and do as well with a wash load as you used to be able to do with a full scoop. And they're interested. They're prepared to buy this now because it's less packaging, less in the land fill, less to take home, and less to store. They are finally accepting that. It's been tested in the past with other types of products; household cleaners and bleaches and so forth, fabric softeners in a concentrated form, and it didn't go. Finally, the environmental concerns are affecting that. Then you have things that are healthy, particularly things that say less fat. The biggest problem with that is if it doesn't taste right, people won't buy it even though they're supposed to.
Q. Within the healthy category, what are some big winners and big losers?
A. The biggest winner is Conagro, which has a better tasting frozen meal, particularly entrees. Now they're going into breakfast and breakfast cereals and egg substitutes, and desserts and a variety of different kinds of healthy products which are brand new. Their line is getting very extensive and in my estimation almost too extensive. I think that it's going to confuse the consumer. But at the moment it's the hot button. Companies like Weight Watchers, Lean Cuisine, Campbell Soup, Heinz and so on are fighting hard to keep a place in the market and build back the place that they used to have.
Q. But bloopers? What are some big bloopers, especially within the health-food category?