Category Intelligence: Dips and Spreads
Spread on the flavor
Dips and spreads are already popular, but new and exciting
flavors, as well as quality ingredients and healthful
options, could grow store brand sales in the category.
By Meghan Hogan
Do
consider adding
nut and seed
butters to the
store brand
spread lineup.
rom anytime snacking
to party time, few foods
offer the versatility and
convenience of dips and
spreads, and more people are reaching
for them. “Spreads in the US,” a report
published in November 2014 by London-based
Euromonitor, forecasts that the market for dips and
spreads will reach $4.5 billion in 2019.
And sales data from Chicago-based market
research firm Information Resources Inc. (IRI)
indicate that many shoppers are already choosing
store brand offerings here. Private label refrigerated
flavored spreads, for example, show a 31 percent
increase in dollar sales during the 52 weeks ending
Dec. 28, 2014, while private label cheese spreads/
balls experienced a 17 percent increase.
Retailers still will find room for growth, however.
Keeping up with the latest trends for spreads and
dips can mean even more success in this category.
Go nuts
One way to grow more sales is by “going nuts.” The
mighty peanut butter is facing a lot of competition
in the spread aisle, much of it from butters based on
such nuts as cashews and almonds, as well as butters
based on seeds such as sunflower and pumpkin.
According to “The State of the Specialty Food
Industry 2014” report, published by the New Yorkbased Specialty Food Association Inc., sales of nut
and seed butters grew a whopping 51.6
percent from 2011 to 2013. The growing
interest in nut-based spreads is also a trend
noted by Euromonitor.
“Traditionally, peanut butter spreads
comprised the vast majority of nut- and
sseed-based spread sales in the U.S.
However, niche brands like Justin’s
H
aand SunButter, which sell almond
and sunflower-based spreads, have
recently expanded their distribution
channel presence to include big name
supermarket and hypermarkets,”
Euromonitor states, noting that the
Orrville, Ohio-based J.M. Smucker Co.
is also getting in on the action with its Jif
brand almond and cashew butters.
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Store Brands / March 2015 / www.storebrands.info
Focus on flavor
For retailers wanting to
increase sales of store brand spreads and dips,
having flavors that jump out at shoppers is key.
“Consumers are looking for spreads to make
a dull piece of bread or fruit taste better with a
unique flavor profile,” says Kim Holman, director of
marketing at St. Francis, Wis.-based Wixon Inc., a
flavors and seasonings company.
According to data from Euromonitor, chocolate
spreads, in particular, are in high demand, partly
because of their versatility.
“Whereas traditional spreads with the likes of
jam, jelly and peanut butter are typically used in
conjunction with bread and more meal-oriented
applications, chocolate spreads can be consumed
in and outside of the context of meals,” the
Euromonitor report notes.
Many consumers, particularly younger ones,
are using Nutella spread not just as a spread, but
also as a cooking and baking ingredient, meaning
a competitively priced store brand alternative —
perhaps with recipes on the label — could be very
appealing to shoppers.
“I think that Nutella has really proven that sweet
spreads have the power to grow sales and be a
major player in the aisle,” Holman notes.
When it comes to fruit spreads, according to
Euromonitor, grape remains the favorite of Americans,
but premium flavors are seeing sales growth, too.
“Incorporating more
exotic fruits like mango and
superfruits like acai berries
limit offerings to
is on-trend,” says Michelle
NBE; premium
Joller, category marketing
spreads are
manager at Platteville, Wis.based Bay Valley Foods LLC, outpacing the
rest of the
a manufacturer of a variety
category.
of private label spreads and
other foods.
Don’t
Category Intelligence: Dips and Spreads
Do
consider adding
healthful ownbrand offerings
such as hummus
and Greek
yogurt dip.
Savory flavors are hot, too, though.
“Beer cheese is exploding on the spread
front,” notes Mary Lindemann, marketingg
director for Newton, Wis.-based Pine
River, which produces a variety of
cheese spreads, including ones for
private label customers. She adds that
hot or spicy ingredients such as sriracha
are getting noticed.
And with ethnic flavors continuing
to grow in popularity, particularly
among millennials, the 2015
McCormick Flavor Forecast suggests
Garlic Pepper Labneh and Tomato & Roasted
Red Pepper as two Middle Eastern-influenced
spreads that could gain traction this year.
But whatever the flavor, spreads also need to
convey quality.
“Premium products are outpacing the rest of the
category, and sales of products with ‘natural’ claims
are increasing,” Joller says. “Adding a premium
product tier is an excellent way for retailers to
expand store brand sales by potentially reaching
new shoppers.”
Offer healthful options
Besides flavor, consumers also want spreads and
dips that are considered better-for-you. NonGMO, organic and gluten-free claims can motivate
shoppers to purchase the store brand. In line with
those claims, Holman predicts that eventually
manufacturers could start adding functional
benefits, too, such as vitamins and minerals
to spreads and dips to generate even further
consumer interest, as has been the case in other
grocery categories.
Some of the most healthful — and most popular
— dips and spreads already on store shelves are
Mediterranean-inspired ones.
“Greek yogurt and hummus
continue to resonate with consumers,”
ssays Karyn Andrew, director of
marketing for Glendale Heights, Ill.m
based Kronos Foods, which offers
a number of products and culinary
ssolutions for Mediterranean cuisine.
““The numbers are incredible from
an awareness standpoint.”
Both Greek yogurt and hummus
aare high in protein, with hummus
aalso being high in fiber, but retailers
shouldn’t go overboard in stressing
their health benefits, Andrew warns.
“Messaging that reminds consumers about the
protein content and versatility should be used,
but don’t make specific health claims.” Instead,
she advises retailers to try to grab shoppers with
exciting beyond-the-ordinary flavors such as red
pepper, chipotle and roasted garlic, and also by
emphasizing the variety of uses for each.
“There is a huge opportunity for retailers to
educate how both Greek yogurt dips and hummus
can be used beyond just a dip,” Andrew says,
noting that “signage, recipes, videos on the grocer’s
social media channel or even something as simple
as pointing the consumer to Pinterest for recipes
will extend their sales.”
And with these and other refrigerated dips,
retailers also should consider
product shelf life.
“They will want it to have
miss the chance
a long shelf life for both their
to educate
sales cycle and the consumer’s
consumers on
use,” Andrew says.
uses beyond the
Claims that promise
traditional for
convenience can also mean
dips and spreads.
more store brand sales.
“Dips that can be
Don’t
Dip and spread category performance
Refrigerated
flavored spreads
Private
Label
Dollar Sales (in millions)
Change vs. Year Ago
Dollar Share
Refrigerated dips
All
Brands
Private
Label
Jellies/jam/honey
All
Brands
Private
Label
All
Brands
Margarine/spreads
Cream cheese/cream
cheese spread
Private
Label
All
Brands
Private
Label
All
Brands
$71.5
$729.9
$132.1
$748.7
$446.0
$1,457.0
$83.7
$1,595.7
$471.3
$1,537.0
+31.4%
+13.6%
+4.2%
+8.6%
+3.8%
+1.2%
-8.2%
-3.1%
+5.6%
+4.8%
9.8%
100%
17.6%
100%
30.6%
100%
5.3%
100%
30.7%
100%
Unit Sales (in millions)
23.7
211.2
45.8
261.3
136.8
444.8
51.1
709.9
254.7
659.2
Change vs. Year Ago
+34.5%
+14.9%
+2.0%
+4.1%
-1.0%
-0.6%
-9.4%
-4.3%
-0.6%
-2.2%
$3.01
$3.46
$2.88
$2.87
$3.26
$3.28
$1.64
$2.25
$1.85
$2.33
Avg. Price Per Unit
Source: IRI, a Chicago-based market research firm. Total U.S. supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar retail chains, for the
52 weeks ending Dec. 28, 2014.
62
Store Brands / March 2015 / www.storebrands.info
Category Intelligence: Dips and Spreads
refrigerated and heated in the microwave help
consumers in their time-tight days,” Holman says,
adding that Mintel data show that “microwaveable”
claims for new product launches of dips and
spreads almost doubled from 2013 to 2014.
Last but not least, one of the strongest means of
drumming up excitement for store brand dips and
spreads is simply giving customers the opportunity
to sample them.
“It’s the best way for people to try a new item
or reinforce the goodness of a store brand,”
Lindemann says. SB
Look what’s new
3 New from Batavia, Ill.-based ALDI Inc. is Simply Nature Creamy Cashew Butter. The butter is said
t be ready to spread and naturally free from gluten and lactose. It is described as a simple food made
to
with only all-natural, honest ingredients and no artificial colors, flavors or unnecessary enhancers. The
w
kosher-certified product retails in a 12-oz. PET jar.
Clover Valley Grape Jelly & Peanut Butter from Dollar General Corp., Goodlettsville, Tenn., 4
C
is now available. The product retails in an 18-oz. glass jar.
3 Now available from Loblaw Companies Ltd., Brampton, Ontario, is President’s Choice Sweet
P
Potato
and Harissa Dip. The vegetarian dip and spread is said to contain no artificial colors or
fflavors and retails in a 280g PET tray.
New from Minneapolis-based Target Corp. is Archer Farms Kale, Artichoke & Bacon Cheese Dip. 4
N
The microwaveable product retails in a 7-oz. carton made from 40 percent post-consumer recycled content.
T
Source: Mintel’s Global New Product Database
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Available in Original, Low Sodium,
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Wonder Natural Foods Corp. Watermill NY 11976
64
Store Brands / March 2015 / www.storebrands.info