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Lots of products, but who is ready to pay?

As 2010 heats up, companies are ready to bring out hundreds of new products. Chief executives at Procter & Gamble Co and Church & Dwight Co Inc even told investors at the Consumer Analyst Group of New York conference this week that their product pipelines are the strongest they have ever seen.

They also face one of the greatest tests yet of their ability to lure U.S. consumers with innovation while unemployment rates remain high and shoppers prove to be extremely selective about spending their money.

So while Church & Dwight’s $15 sonic toothbrush or Energizer Holdings Inc’sfive-blade Schick Hydro razor may impress people, few may be willing to pay for them.

“I like the innovation. I’m just still a little nervous about the consumer,” said RBC Capital Markets analyst Jason Gere. “I don’t know if it’s going to invigorate category growth quite yet. I think you need to see the consumer willing to trade up.”

Some smart new products have already be given the cold shoulder. Clorox Co hoped to command a premium price with its Green Works natural laundry detergent last year. But Wal-Mart Stores Inc decided not to carry the product, even though it was already selling other Green Works goods.

“We got too pricey,” CEO Don Knauss said in an interview.

Now, Clorox is dropping the price on a 45-ounce bottle of the detergent from $9.99 to $6.99.

What is clear is that household goods makers are looking for ways to drive sales after several quarters of cutting costs to meet or beat Wall Street’s profit expectations.

“Top line growth is obviously paramount in everybody’s mind now. From the investment community, everybody is looking for who’s got robust top line. You’re not going to save your way to glory,” Knauss said. “You’ve got to grow.”

Breaking Through the Clutter

After two years of watching shoppers clear out their pantries before buying, manufacturers are loaded with innovations. With so many items making their debut at the same time, there might be too much noise.

“There’s only so much information that the consumer can absorb,” Victory Capital Management managing director David Kolpak said. “If everyone tries to flood the airways at the same time, it raises the cost to break through the clutter.”

Companies are willing to significantly raise promotional and advertising spending to drive trials of their new goods. Executives at CAGNY said consumers will keep coming back to names they know and see as safe bets.

“Take Hidden Valley Ranch (salad dressing). It’s our most premium-priced product and it’s gained more share than anything we have in this economy,” Knauss said.

For Estee Lauder Cos Inc (EL.N), the key is showing that more expensive items are worth paying for. A woman picking out a foundation at a mass chain is “2.3 times more likely to get the wrong shade” than one who gets advice at a cosmetics counter, said CEO Fabrizio Freda.

“So maybe you pay a little bit less, but you lose a little bit more. There is value in the advice,” he said.

Tough Times Persist

At the very least, companies have a rough couple of months to work through as concerns about unemployment persist.

“It is still going to be tough out there for at least a quarter or so” to get people to buy, said JP Morgan analyst John Faucher.

Food makers, who have felt the brunt of consumers opting for cheaper store brands, find one key play is to bring out products that are not easy to duplicate.

ConAgra Foods Inc CEO Gary Rodkin said his company is working on more technology-driven products where it can get patents, thereby slowing down the introduction of copycats.

After coming out with Healthy Choice Cafe Steamers, which includes a container that steams frozen food in the microwave, it is preparing to introduce multi-serving microwaveable entrees like lasagna, which cook in about one-third the time it takes in a conventional oven with the same quality.

Another priority is weaning shoppers off promotional discounts.

Kraft Foods Inc decided not to match some rivals’ lower prices to protect its profits and instead work on new products, such as Capri Sun breakfast drinks.

“In the case of coffee and nuts, the promoted price points ... were just not attractive economically,” CEO Irene Rosenfeld said.