Add Variety and Spice

Sometimes a favorite meal just is not complete without a favorite condiment. Condiments offer a lot of value, variety and versatility for a reasonable price.

However, the category overall seems to be headed for a downturn. According to a recent report from global market research firm Mintel, dollar sales for the total condiment category are expected to decline by 1 to 2 percent each year between 2013 and 2018. The keys to warding off future sales declines are using “of-the-moment” flavors and educating consumers about new uses.

New flavors

Classic condiments such as ketchup, mustard and mayonnaise are always popular, but the field is opening up to broader taste preferences and flavor profiles. Jennifer Tracy, senior marketing services manager, Mizkan Americas Inc., Mount Prospect, Ill., pinpoints several trends, beginning with ethnic flavors.

“The Latin American and Asian flavors are influencing all sorts of condiments, not just ketchup and mustard, but sauces as well,” she explains. “And we’re seeing those condiments that are typical of the Asian set or Hispanic set are really becoming more mainstream.”

Peppers are also playing a big part both as a standalone condiment and in the formulation of other condiments.

“There seems to be a lot of activity around peppers,” says Dan Kelly, vice president of sales for Musco Family Olive, Tracy, Calif., “both for branded companies and also in interest among retailers with regards to developing a private label pepper line.”

Peppers are also an important asset when developing better-for-you formulations.

“[Peppers] are a very powerful ingredient on the formulation side because they can be used to replace some other ingredients like salt, for example,” Tracy says, “because peppers add so much flavor.”

Another important trend for all condiments is the highlighting of their versatility. With such a heavily saturated category, this trend is critical to future growth.

“Mustard is really showing that it can be used as a component to a marinade,” Tracy notes. “You can also use it in a salad dressing and many other applications.”

Know your shopper

When it comes to store brand condiments, retailers have their hands full with a wide variety of product choices and strategies. Offering name-brand-equivalent products seems to be a logical first step. But retailers will need to get much more innovative with their private label lines if they are to take their sales to the next level.

“[Retailers should] be a little more creative in their flavor profiles and not duplicate flavors already on the shelf,” says Rick Schmidt, vice president of national sales for Woeber Mustard Co., Springfield, Ohio. “Why carry three spicy browns or two Southwest flavors [of mustard]?”

By gleaning shopper insights, retailers have the unique ability to customize their offerings to the specific wants of their customers. They also could take into consideration demographic-specific trends.

“Statistics show that the younger demographic group is very interested in spicy flavors,” Tracy adds. “They are more progressive and are willing to take risks in the kitchen.”

Retailers also should be aware of the opportunities for both center store and the store perimeter. Take olives, for example.

“Olives are kind of a hot category,” Kelly says. “In spite of the low to no growth in center store, you’re seeing this whole area of the perimeter starting to proliferate with various types of olive products.”

Perimeter store areas such as the produce and fresh deli sections, along with olive bars, are locations where olives are already playing and could be primed for enhanced growth.

And center store also lends itself to olive growth opportunity. Kroger’s Private Selection olives, for example, get into specialty olive territory, Kelly says. He notes that not only does the packaging feature more upscale jars, but the array of stuffings and olives are both high in quality.

“They are trying to differentiate themselves from the brands through packaging and through product quality,” he adds.

Optimize promos and pricing

Promotion optimization is often a function of timing and of understanding the shopper. It can be futile for a retailer to promote its store brand condiments during times of the year when consumers are simply not looking for those items.

“There are four critical holidays for olives: Easter, the Fourth of July, Thanksgiving and Christmas,” Kelly says. “Promoting in August, which is a very low consumption period for that product, does not make sense.”

And when it comes to pricing, retailers do not have to give away the product for next to nothing to drive volume.

“You just have to optimize the profitability of the sale by maximizing your gap management to brands,” Kelly advises.

Mizkan Americas’ Tracy agrees.

“Because there has been such an emphasis on price,” she explains, “consumers are in a pattern of believing that they can get things for next to nothing.”

Promotional tactics such as “get 10 for $10,” particularly in marinades, can drive down the overall category value.

“Manufacturers need to help retailers understand why a particular product is going to drive revenue for them,” Tracy says. “We need to, as resources, give them that insight and help them to strategize on value-add products.”

And it might not hurt to freshen up a line’s look — its label, its flavors and/or its packaging — every few years, or even more often.

“When going through a category review, freshen your product,” Schmidt advises. “Change out flavors that are similar, and be sure to include new organic and natural flavors.”

But above all, retailers should look for any opportunity to cross-merchandise.

“Set up particular end caps that are seasonal that relate to whatever the consumer might need to pick up on a shopping trip before a holiday or event,” Tracy says. “Put all of those items in one area and call attention to those items.”

And, when done successfully, in-store demos do a really good job of drawing attention to the condiment.

“From the retailer’s perspective, in-store demos are a good way of telling the consumer we understand you,” Tracy says. “We get your needs and we’re here to help you.”

Looking up

With such a heavily saturated category, it can be difficult to remain optimistic about category growth. But as long as consumers are in the market for “new and exciting,” retailers will be able to find ways to be competitive.

“[Store brands] have proven in other categories their ability to not only break away from the old-school-thinking me-too’ approach,” Tracy says. “They can stay ahead of the curve by offering flavors and packaging that appeal to consumers and are in a convenient format as well.”

Do consider adding on-trend ethnic flavors to the store brand condiment mix.

Don’t limit condiment placement to center store; cross-merchandise them with complementary items for complete meal solutions.

Do evaluate the condiment category frequently and refresh the own-brand lineup.

Don’t make the price gap between store brand and national brand condiments unnecessarily wide.