Pour On The Flavor

Consumers might be dining at home more often, but they still want a little flavor excitement. And they are looking to prepared sauces and marinades to get it.

Whether it's a savory pasta sauce topping spaghetti for a quick weeknight dinner or a spicy marinade poured over kabobs for a relaxing weekend cookout, North American consumers rely on sauces and marinades to add a bit of flavor excitement to at-home dining occasions. But few of these consumers have the desire, know-how or time to create these products from scratch. They want someone else to do the work for them.

And with the down economy forcing many consumers to make fewer restaurant visits and eat at home more often in recent years, prepared sauces and marinades have seen strong growth. According to "Cooking Sauces and Marinades — US," an April 2011 report from global market research firm Mintel International, dollar sales within the U.S. prepared cooking sauces and marinades market rose 20 percent between 2005 and 2010. However, slumping red meat and poultry sales, as well as competition from prepared meals and processed meat, poultry and fish, do pose a challenge to the market.

Healthy tweaks lead trends

To boost the chances of success here, retailers will want to pay attention to both current and emerging category trends. One such trend is that toward all-natural offerings.

"It's still small to the category, but it's something that you really have to be aware of and prepared for in the future," says Rick Schmidt, vice president of national sales for Woeber Mustard Manufacturing Co., Springfield, Ohio. "But that's the way consumers want to go, and you really need to answer to them."

Of course, a leap to all-natural comes with a higher price tag. The first ingredient in traditional barbecue sauce, for example, in corn syrup, Schmidt notes — and cane sugar as a natural alternative ingredient costs more.

Speaking of barbecue sauce, Mike Hackbarth, vice president of private label for The Fremont Co., Fremont, Ohio, notes that the Sweet Baby Ray's brand is now the No. 1 selling brand, having surpassed the offerings from long-time leader Kraft. That reality speaks to a trend toward premium barbecue sauces that are thicker and sweeter and designed for "real barbecue cooking," he says.

The natural trend is playing out on the pasta sauce side, too, but an emerging trend toward sodium reduction also is worth noting.

"Pasta sauce as a category has always been perceived as a healthy food, but there's been an initiative across all categories for reduced sodium," says Edward Salzano, executive vice president with LiDestri Foods, Fairport, N.Y. "I think that's one of the things you're going to see gradually happen in the pasta sauce category — it's already started. But not too many of the store brands have picked up on that initiative yet."

Flavor-wise, sauces and marinades with curry or Asian flavors are becoming more popular among consumers, and represent a potential opportunity on the store brand side, notes Doug Oaks, national accounts manager, retail for Red Wing, Minn.-based Food Service Specialties. Spicy wing sauces, too, have become very popular with consumers, he adds, and can be used as both a marinade and a dipping sauce.

No matter what trend a retailer is aiming to meet, store brand opportunities can be found in all product tiers across the sauce and marinade segment, notes Mike Klanac, senior director of marketing for The Carriage House Companies of Fredonia, N.Y. Rising costs for soy oil, sweeteners and other commodities have increased the need for value offerings, while national-brand-equivalent products remain the core of a solid store brand program, he says. And premium items can serve as differentiators for the more innovative retailers.

But retailers might want to bypass the value tier for new pasta sauces. According to Salzano, that segment is shrinking.

"If you look at the category numbers, the growth is on the higher end, especially in own brands," he says. "But that has to do with a lot of the retailers trying to position their brands as premium or better than the national brand."

Ponder the package

Retailers also will want to pay close attention to trends and technology advances on the packaging side. Although PET is now a consumer-accepted option for many national brand and store brand barbecue sauces and marinades, glass remains the standard for pasta sauce and many other sauce products. And if the product is all-natural, glass and aseptic really are the only options, Oaks says, because packaging in PET requires preservatives.

As he explains, PET is "not quite there yet" in terms of technology to be a good fit for the pasta sauce category.

"I think plastic eventually will get there," he says. "I think it's just a matter of time before they break through that wall and are able to fill at 195 degrees and get good shelf life. It's a barrier thing and a heat resistance thing for these products."

Of course, a unique packaging spin can draw attention to store brand sauces and marinades. Retailers might want to look to the national brands here for inspiration.

The Sweet Baby Ray's brand, for example, recently introduced an upside-down bottle, Hackbarth notes.

"They call it a dipping size, which takes advantage of barbecue sauce's universal appeal to use with chicken fingers, fries, etc.," he says. "Interestingly, I have only seen it in Walmart stores."

Speaking of dipping, Woeber Mustard went to a squeeze-style bottle for its new Supreme Dips (available for private labeling), which are designed to go with chicken nuggets and such from the retail freezer case. The unique packaging format might be appropriate for this newly created category that's really neither a sauce nor a traditional dip — but certainly in keeping with consumer behavior.

"People are dipping everything," Schmidt says. "They're not just cooking with sauces all the time — now they are dipping things into them."

Pour on the marketing

Retailers that put some marketing muscle behind new and existing store brand sauces and marinades will find the most success here, provided the quality is top-notch.

In a segment that's all about flavor, perhaps sampling is the most important attractor. And pasta and other sauces are relatively easy to demo, Salzano says.

"Some of the weaker retailers don't invest in their own brand — don't do demos on their own brand," he notes.

And the sky's the limit in terms of demos.

"If you're going to promote a puttanesca sauce, for example, you might as well put scallops or shrimp or maybe some fresh spinach and noodles as part of it — show them all at one time in a demo," Oaks suggests. "And in cross-merchandising, giving people really simple recipe ideas is huge. That's what people want — something they can put together in 5 minutes, put in the oven for 25 minutes and eat in 45 minutes."

Speaking of merchandising, half-pallet displays that feature, for instance, a store brand barbecue sauce and a complementary product work well, Schmidt says.

And Klanac notes that his company's cube shippers, which are self-contained and easy to set up, also work well on the merchandising front. For example, Carriage House's "medium" shipper works well for secondary displays of 12-ounce marinades, while its "universal" shipper can hold a couple of cases of cocktail sauce, making it perfect for holiday placement near fresh or frozen shrimp.

Overall mindset also will impact sales within the segment, Klanac emphasizes. Those retailers focused on "buying to buy" instead of "buying to sell" traditionally have realized the lowest store brand penetration rates.

Sauce and marinade segment performance

"Retailers will get a lot more lift by placing store brands in logical secondary locations versus simply offering [a low] price and being buried in the section."

Look what's new

Culinary Circle Three Forest Mushroom Pasta Sauce from Minneapolis-based Supervalu boasts porcini, portabella and champignon mushrooms; San Marzano tomatoes; sweet basil and extra virgin olive oil. The microwavable product retails in a recyclable 24-oz. glass jar.

New from Loblaw Companies, Brampton, Ontario, is the President's Choice black label Lime & Chili Marinade. Said to be inspired by the fresh and tangy flavors of Mexico, the marinade and dipping sauce combines lime juice and chilies and is suitable for seafood, pork, beef and chicken. The product retails in a 349ml glass jar.

Archer Farms Pot Roast Slow Cooker Sauce from Minneapolis-based Target is described as rich and savory. Made with Cabernet wine, the sauce is designed to be added to roast beef in a slow cooker. It retails in a 16.5-oz. glass jar.

New from Schnuck Markets, St. Louis, is Schnucks Sloppy Joe Sauce. Consumers simply add the sauce to browned fresh ground beef or turkey. The kosher-certified product retails in a 15.5-oz. can.

Also new from Loblaw Companies is the President's Choice Rosé Pasta & Cooking Sauce. The microwavable sauce retails in a 580ml plastic tub.

Do consider all-natural formulations — but be prepared for a higher cost.

Don't forget that consumers also use sauces and marinades for dipping; usage suggestions here could help build trial.

Do create and demo simple recipes for new sauces and marinades.

Don't hide the products on the shelf; cross-merchandise sauces and marinades with complementary products throughout the store.