Pour On Distinction

To drive growth in store brand oils, dressings and vinegars, retailers need to focus on cleaner ingredient statements, unique flavors and other differentiators.

Cooking oils, salad dressings and vinegars are staples in most North American households. And with more consumers looking to their own kitchens for meal preparation these days, one would expect sales in all sub-segments to be soaring.

But that's simply not the case. Instead, recent sales performance is all over the place. For example, the total reduced-/low-calorie shelf-stable salad dressings sub-segment saw a 9.6 percent decline in dollar sales and a 10.3 percent dip in unit sales during the 52 weeks ending Aug. 7, according to data from The Nielsen Co., New York (food, drug and mass merchandiser stores, including Walmart). But the total refrigerated (deli) salad dressing sub-segment realized 2.8 percent and 5.3 percent dollar and unit sales gains, respectively, during the same timeframe.

Health rules

According to the global market research firm Mintel International, healthful alternatives are of high interest across the entire segment. Within the salad dressing and vinegar space, for example, Mintel points to niche opportunities in functional claims — as well as opportunities to market the benefits of antioxidant-rich ingredients such as raspberry and pomegranate. And premium products remain popular on the oils side, driven by continued interest in more healthful olive oils, more natural formulations and origin of ingredients.

Michelle Joller, marketing manager for Westchester, Ill.-based Bay Valley Foods, agrees with Mintel's assessment, noting that the best store brand opportunities lie in the premium and health and wellness segments, where retailers can differentiate and provide more unique options. On the health and wellness side, she says the leading national brands recently replaced high-fructose corn syrup with sugar in their salad dressings.

"Overall, consumers are looking for [simpler] and 'healthier' ingredient statements," Joller adds. "For salad dressing, this trend will continue to challenge manufacturers to reformulate products to include fewer ingredients with which consumers are familiar, as if products were homemade. These types of products will best fit the all-natural and refrigerated segments and could be an opportunity for store brands to take the lead."

Omega-3 alpha-linolenic acid (ALA), an essential fatty acid the body cannot manufacture, now is being added to some salad dressings, notes Mike Klanac, senior director of marketing for The Carriage House Companies Inc. of Fredonia, N.Y. But he also sees potential for new store brand products outside the health and wellness arena.

"I think there is always room for a good store brand pourable dressing program that includes a good mix of top-selling brand alternatives featuring oil-based, cream-based, light, fat-free and western offerings," he says. "On the packaging side, we continue to watch 'spritzers,' but we'll wait until there is a strong branded presence before jumping in."

That said, Klanac notes interest in new flavors and ingredients ranging from Turkish influences with a "unique flavor fusion character" to cardamom and curry from the Pacific Rim.

A number of retailers recently added new flavors or formats to store brand salad dressing offerings. According to Mintel's Global New Products Database (GNPD), Shop 'n Save of St. Louis repackaged its Shop 'n Save Ranch Topping & Dressing in an "easy-squeeze" upside-down bottle that guarantees no mess. And Batavia, III.-based ALDI Inc. is keeping up with flavor trends, launching Tuscan Garden Connoisseur salad dressings in Asiago Peppercorn, Vidalia Onion and Three-Cheese Ranch varieties. St. Louis-based Save-A-Lot, meanwhile, is aiming to grab a share of spritzer sales, introducing Portmann's Spritz Mist salad dressings in Red Wine Vinaigrette, Italian Vinaigrette and Light Ranch varieties, GNPD reports.

Don't put so much emphasis on core items that you miss out on the potential benefits exciting new line-freshening items could deliver.

Do consider niche opportunities in functional claims, as well as opportunities to market the benefits of antioxidant-rich ingredients such as raspberry and pomegranate.

Quality counts

On the oils side, retailers have a chance to develop high-quality products featuring different origins and flavors, notes Agron Kosovo, manager of Naperville, Ill.-based Fine Italian Food, which recently introduced an innovative non-aerosol extra-virgin olive oil cooking spray.

"Some retailers have only one goal: the cheapest price possible," he contends. "If you don't offer any quality or a different taste profile … I think [consumers] will think again before purchasing this item again. Keeping the right balance between price and quality, I think, will guarantee success in the long-term."

Of course, many retailers aim for quality and are not afraid to stray a bit from the tried-and-true on the oils side. For example, Mintel's GNPD says Montreal-based Metro Inc. launched a spray-on olive oil: Irresistibles Extra Virgin Olive Oil Spray. And the new Roundy's Select Extra Light in Color Olive Oil, from Milwaukee-based Roundy's Supermarkets, is said to be a blend of oils imported from Italy, Spain, Tunisia and Turkey.

Also worth mentioning is the fact that manufacturers and retailers now face new USDA standards that will help mitigate the "shenanigans" that have been going on within the olive oil sub-segment in relation to quality grading, notes Pasquale Giampietro, who handles sales for Chicago-based V. Formusa Co.

The USDA standards, which went into effect on Oct. 24, define the different grades of olive oil and olive-pomace oil using chemical and sensory parameters that are similar to those of the International Olive Council, USDA explains.

New European labeling requirements also impact authentic Italian aged balsamic vinegars, according to Italian Foods Corp. of Raleigh, N.C.

The requirements no longer allow labels to indicate the number of years the vinegars are aged, but permit the word "aged" on the label if the balsamic vinegar has been aged in wood for at least three years.

Speaking of vinegar, it's also seeing its fair share of store brand innovation. The Food Emporium, New York, recently introduced The Food Emporium Fine Food Balsamic Vinegar, Mintel's GNPD reports, a certified quality product from Modena that is said to have a "round, sweet, spicy full-bodied taste." And Raley's of West Sacramento, Calif., added some flavor interest with its new Raley's Find Foods Garlic-Flavored Red Wine Vinegar.

Do remember that high-quality unique products can command a premium price and still provide good value.

Don't rely solely on temporary price reductions to move store brand salad dressings.

Err not

In addition to paying attention to trends and labeling standards, retailers will want to avoid some common mistakes playing out in the store brand oils, dressings and vinegars segment. Some retailers put so much emphasis on core items that they miss out on the potential benefits exciting new line-freshening items could deliver, Klanac notes. He also points to "woefully dated" label designs and price points that are too close to the brand target or too vast as other common missteps.

Speaking of pricing, Joller takes issue with deeply discounted premium products.

"Keep in mind that shoppers are looking for value, but that means quality at a certain price," she says. "Retailers pursuing premium product lines should consider that high-quality unique products can command a premium price and still provide good value."

Art of persuasion

A little creativity in merchandising and promotion doesn't hurt, either.

And don't rely solely on temporary price reductions to move store brand salad dressings, Joller advises.

"Store brand equity can be better maintained and lift is much higher by featuring store brand items in weekly circulars while, at the same time, putting those items on display in the store," she says.

Joller also points to one retailer that guaranteed store brand quality by offering its store brand item free when shoppers purchased the leading national brand.

On the merchandising side, Klanac notes that shipper programs featuring secondary locations work well for many of The Carriage House Co.'s customers. For example, for salad dressings, a self-contained display shipper situated in the produce department helps promote impulse sales and incremental volume year-round.

And cross-merchandising store brand oils, dressing and vinegars with other categories also works well, Kosovo notes.

Finally, Klanac advises retailers to "walk the talk" in program planning, overall.

"It's been said that the single central fact about a free market is that no exchange takes place unless both parties benefit," he says. "Unique sizes, flavors, programs, etc., are great tools for driving store brand volume, but all come at a slight premium. True partners need to keep this in mind in developing new store brand programs."

'Overall, consumers are looking for [simpler] and 'healthier' ingredient statements.'

Top 5 Markets for Oils, Salad Dressings and Vinegars

1. Pittsburgh, Pa., Metro
2. Tulsa, Okla., Metro
3. Birmingham, Hoover, Ala., Metro
4. Louisville, Jefferson County, Ky./Ind., Metro
5. Buffalo, Niagara Falls, N.Y., Metro

Regions with the largest percentage of people with a tendency to buy store brand oils, salad dressings and vinegars, reported by Core Based Statistical Areas (CBSA) defined by the U.S. Office of Management and Budget.

Source: Buxton Co., Fort Worth, Texas.

For salad dressings, a self-contained display shipper situated in the produce department helps promote impulse sales and incremental volume year-round.

Health Promoter

Combined with oil, vinegar makes a fine salad topper. But according to the Atlanta, Ga.-based Vinegar Institute, it's a great health booster, too. The institute says various varieties of vinegar help to:

• Relieve heartburn (1 or 2 tablespoons of balsamic vinegar).
• Remove calcium deposits from continuous positive airway pressure (CPAP) machines for sleep apnea.
• Soothe a bee or jellyfish sting.
• Relieve sunburn.
• Relieve dry and itchy skin when added to bath water.
• Fight dandruff, when used with warm water as a rinse after shampooing.
• Soothe a sore throat, when mixed with water and gargled.
• Treat sinus infections and chest colds, when added to a vaporizer.
• Treat skin burns.
• Relieve chest congestion, when mixed with steaming water and inhaled.
• Treat toenail fungus.
• Relieve arthritis symptoms (when mixed with honey and gelatin and ingested).
• Help alleviate morning sickness (when mixed with water and honey and ingested).
• Clean heavily soiled hands (when combined with cornmeal).
• Soften feet (when mixed with a warm water soaking solution).
• Remove warts (when mixed with a lukewarm or warm water soaking solution).
• Ward off bugs (when mixed with liquid dish soap and applied to skin).

To learn more about these and numerous other uses for vinegar (great for sharing with shoppers), visit www.versatilevinegar.org.