Brand survival rate below 60% long-term: report

Rapid product cycles challenge market sustainability.

The fast moving consumer goods (FMCG) industry is seeing a high turnover of brands, with many failing to sustain long-term viability. Nearly one third of brands launched in 2022 were discontinued by the end of 2023, and those started last year have less than 60% chance to survive in the long term, according to a Euromonitor International report.

Innovation Consultant Frida Polyak explained the volatile nature of brand success in today’s market. “In today's fast-paced world, consumers' attention spans are short, and the desire for new is constant. Therefore, many new brands failing in their first years is no surprise. Actually, it is very standard across the most dynamic FMCG categories,” she said. 

According to Polyak, Euromonitor’s new AI-powered platform, Passport Innovation, tracks the lifecycle of newly launched brands and has observed that “in food and beverages 10 to 15% of new brands fail in their first year, and approximately 30 to 40% of new brands fail in their first two years.”

This high failure rate is partly due to the shorter product life cycles necessary to continually captivate consumer interest with fresh offerings. “Our research indicates that product life cycles are simply shorter to meet consumers' expectations of seeing something new on the shelf all the time,” Polyak noted. 

Polyak emphasised that cost is a major deciding factor, especially in price-sensitive markets like Asia. “40% of Singaporean consumers look for low prices when buying food and beverages,” she stated, highlighting the challenge for smaller brands in maintaining competitive pricing.

Additionally, the taste of a product remains a critical success factor. “Taste remains a determining factor when it comes to new product launches in food and beverages,” Polyak said, indicating that consumers are willing to pay a premium for superior flavours.

Singapore, recognized for its innovation-friendly environment, serves as a crucial test market for new products. “Companies often use Singapore as a testing market to determine the viability of their products before investing more in a product that may not gain traction with consumers,” Polyak explained. The success of a product in Singapore often suggests potential for broader regional or global expansion.