Cover your bases

Vinegars and edible oils have greatly evolved in recent years to meet ever-changing consumer demands in recipe creation and food preparation. Driving these demands are the continuing flat U.S. economy which is resulting in more at-home dining and entertaining; increased consumer experimentation with new flavors and dishes to serve family and friends; and growing consumer demand for higher-quality better-for-you products and ingredients.

Retailers would be wise, therefore, to offer different qualities of store brand oil and vinegar products at varying price points for today’s wide range of shoppers.

Sales fluctuation

Shortening and oil sales totaled $3.5 billion for the 52 weeks ending Nov. 1, 2015, down 1.2 percent from the year-earlier period, according to Chicagobased market research firm Information Resources Inc. (IRI). Vinegar sales, meanwhile, were $532.6 million, up 7.1 percent.

Specialty oils and vinegars have been gaining in popularity. Sales totalled $938 million in 2014, up 22.6 percent from 2012, according to research performed by the Specialty Food Association (SFA), says Louise Kramer, communications director of the New York-based group. Coconut oil and infused oils are of high consumer interest. Consumers also are interested in where the olives used in extra-virgin olive oil (EVOO) are grown.

“We’ve also been seeing a lot of fruit-flavored vinegars and drinking vinegars in the past few years,” Kramer says. “Smoked oils have been cropping up more, too. Both [the oil and vinegar] categories are doing well and driven by consumer demand for food that is ‘better for you.’”

Generation X shoppers (39- to 50-year-olds) have the highest incidence of oil and vinegar purchases, states “Today’s Specialty Consumer 2015,” a 2014 report from SFA and global market research firm Mintel. Gen Xers also spend the most per week on cooking or preparing food at home.

Consumers are becoming more educated on the positive role fats and oils play in one’s diet, according to “Consumer Perspectives on Fats and Oils,” presented by the Packaged Facts division of Rockville, Md.-based MarketResearch.com during the Natural Products Expo East in September 2015. Cooking/salad oils projected to be used most often in 2015 (percent of households) include olive oil, in 50 percent of households; vegetable oil, 31.5 percent; pure canola oil, 23.1 percent; pure corn oil, 6.0 percent; and blended oils, 3.9 percent.

Top vinegar product trends include organic, organic/drinkable/healthful vinegars (such as organic apple cider vinegar, which is unfiltered, unpasteurized and includes naturally formed constituents referred to as the “mother”) and balsamic glazes or reductions (balsamic vinegar reduced to a thicker, fuller flavor), says Luca Bombarda, CEO of Modena Fine Foods Inc., Clifton, N.J.

“Balsamic is still growing, especially the higher-quality more-upscale presentations,” he adds. “[More vinegar] is being used for pickling.”

More consumers are seeking higher-quality, healthier-alternative oil and vinegar products. Those more educated about the food they consume want more information about product quality and how food products are sourced, says David Bensadoun, CEO of Pompeian Inc., Baltimore.

“There is a lot of discussion around olive oil authenticity, so consumers seek validation from third-party authorities to verify quality,” he says.

Pompeian does so with its EVOO, Bensadoun adds. It works with family farmers globally to provide detailed olive oil traceability information from tree to bottle.

Increasing demand for quality products and more variety in origin, packaging and product pricing are major food oil trends, notes Agron Kosova, manager of Fine Italian Food, Naperville, Ill., the North American branch of Compagnia Alimentare Italiana.

“Consumers are learning more about olive oil and are willing to spend more on higher-quality products,” he says.

Leverage trends

To succeed on the store brand side, retailers should offer high-quality third-party-verified olive oil and vinegar — at great price points, Bensadoun says.

“Because today’s consumer is also interested in where olive oil comes from and making sure the product is authentic and of the highest quality/ freshness, retailers need to be transparent about the quality controls they have in place for their products, as well as ensure their vendors/partners have strict quality controls in place for all products,” he adds.

Retailers should offer products from different countries in various qualities and packaging, Kosova adds — plus find the right supplier to offer consistent quality of oil at competitive rates. They should use weekly fliers to merchandise their store brand oils, and not only offer deals, but also educate shoppers about olive oil quality.

The potential for growing store brand vinegar sales, meanwhile, grows when the number of items increases. Retailers should add more upscale, higher-quality products, as well as an organic vinegar and a balsamic glaze or reduction to current offerings, Bombarda suggests. They should also add more product facings to make their store brand products more visible.

“Offering a complete selection will increase [product] turnover and the value of the vinegar shelf,” he adds. “Group the store brand vinegar across different types of vinegars and qualities to center and attract the attention of the shopper to the store brand. Demo higher-quality [vinegar] and glazes to increase the value of the category.”

Retailers also should give store brand oils and vinegars their fair share of merchandising attention, Bombarda says.

“Cross-merchandising more store brands, promoting with signage and explaining to consumers how to use store brand products are effective ways to improve the category,” he says.

Consider alternative packaging

More oil bottle options, as well as natural sprays, are available and growing in popularity, Kosova says.

“Different packaging — larger sizes for convenience and everyday uses, plus smaller and more premium packaging and qualities [aimed toward] special occasions and/or special recipes — [satisfies] all of your shoppers’ needs,” Bombarda says.

Although vinegar is naturally gluten-free, not all consumers know this, he adds.

“Improving the shelf signage with shelf talkers and neck-tags to apply to bottles will improve and attract/educate shoppers,” Bombarda says. “The usage and different applications should also be advertised. Adding that the product is non-GMO, gluten-free, low-carb, low-sugar and low-sodium might sound unnecessary, but I believe it is still important to disclose.”

Looking ahead, he says stores should put more effort into merchandising, demoing and educating shoppers.

”Often, these activities have a low cost but result in a high return,” Bombarda says.

Do consider adding on-trend fruit-flavored vinegars and smoked oils.

Don’t ignore Gen X; the generation boasts the highest incidence of oil and vinegar purchases.

Do consider investing in third-party quality verification for olive oils.

Don’t discount the power of alternative packaging formats in attracting consumers’ attention.