Relish Your Brands
A good number of Americans would agree that no sandwich is complete without a layer of mayo or slice of pickle, nor is a hot dog ready to eat without a generous topping of relish or mustard (or both). And consumers’ increase in at-home eating after the economy tanked could explain why dollar sales of these and other condiments increased 10 percent between 2008 and 2013, reaching $5.6 billion, says global market research firm Mintel in its September 2014 “Category Insight: Table Sauces and Seasonings” report.
However, sales of condiments are expected to drop 1.5 percent to $5.5 billion by 2018, Mintel says. The expected drop will be due to increased away-from-home spending on food, the staleness of the category and increased competition from other categories. This news means retailers will have to come up with fresh ideas to drive sales of their store brand condiments.
What’s inside counts
According to Mintel, 39 percent of U.S. consumers believe condiments have too many additives and preservatives. Therefore, it makes sense that fewer and better-for-you ingredients are perhaps two of the biggest trends right now in condiments.
“Consumers are looking for cleaner labels with fewer ingredients, focusing on the content of sugar, salt and fat,” says Wendy Kado, regional sales manager with Eau Claire, Wis.-based Silver Spring Foods.
Natural and organic products represent an area of growth in the ketchup category, for instance. Organic ketchup has seen — and continues to see — significant growth, says Mike Hackbarth, vice president, private brand and customer demand with The Fremont Co. of Fremont, Ohio.
“Private brand organic ketchup sales have increased 35 percent versus last year, and [private brand ketchup] continues to be the No. 1 organic ketchup brand, with a 65.2 percent share of all units of organic ketchup sold,” he explains.
Meanwhile, natural ketchup made with sugar instead of high-fructose corn syrup (HFCS) has seen some good activity with the recent market entry of French’s HFCS-free tomato ketchup, which joins three Hunt’s natural ketchup offerings in the same 20- and 32-ounce sizes. Progressive retailers also have introduced at least one natural ketchup SKU under their own brands over the past couple of years, Hackbarth explains.
Organic offerings are increasing in popularity in the salad dressing subcategory, too, says David Hambright, general manager at Chester, Vt.-based Drew’s. He also points to free-from salad dressings — including non-GMO and gluten-free items — as areas of opportunity.
Think unique, upscale
Another way retailers could grow sales of store brand condiments is by thinking beyond “me too” products and developing new and innovative flavors and varieties, Kado says.
“Consumers like innovation and are looking for new and exciting flavors,” she stresses.
Mintel points to “flavor blurring” as a major trend in the liquid condiment market, whereby separate flavor components have been combined together — either from individual condiment lines or from different category lines. These condiments are especially appealing to U.S. millennials, as 79 percent of them say they enjoy trying new and different condiment flavors, and 61 percent say they like to mix condiments together to create their own flavors.
One example is Archer Farms Bourbon & Molasses Ketchup from Minneapolis-based Target Corp., which also fits in with the sub-trend of flavor-blurring inspired by alcoholic beverages.
Turning to pickled condiments, retailers have a chance to expand their store brand olives and peppers assortment into more specialty products. Brian Giuliano, vice president of Giuliano’s Specialty Foods of Garden Grove, Calif., states, for instance, that many retailers today limit their store brand olive offerings to low-end Manzanilla olives in several jar sizes, which attract a limited shopper base.
“Having larger stuffed olives — for example, garlic, blue cheese, etc. — opens the door to more shoppers wanting an upscale product,” he points out.
As for pickles, with the growing diversity of Asian flavors in U.S. prepared meals and Asia seeing the largest increase in pickle launches since 2010, U.S. brand owners could have an opportunity to introduce Asian-themed pickles, positioning them as authentic side dishes for Asian home-cooked meals. In its October 2014 “Category Expert Insight: US Condiments in a Pickle” piece, Mintel reports that some of the defining trends for Asian pickles are the significantly higher use of chili pepper seasoning and the use of different vegetables and other seasonings such as ginger and curcumin.
However, retailers shouldn’t neglect the classics across condiments subcategories. For instance, in the salad dressing subcategory, millennials purchase “more than their fair share” of ranch dressing, the subcategory’s top-selling flavor, says Michelle Joller, category marketing manager with Oak Brook, Ill.-based Bay Valley Foods.
“We expect sales of this condiment to grow in the years ahead,” she states.
As for what retailers should avoid, Joller points to carrying too many low-volume brands in hopes of providing shoppers the most variety. Instead, retailers should leverage their own-brand condiments to provide more variety.
“This not only strengthens the retailer’s brand by attracting shoppers with unique items,” she says, “but also helps to reduce complexity for the store, which will ultimately lower costs.”
Pack, pitch your product
Turning to packaging, retailers must call out product attributes and give usage ideas, Kado says. Packaging also should be sustainable and explain both the package’s sustainability and any of the product’s healthful attributes.
But don’t let the label get too cluttered.
“Shoppers are looking for clean, easy-to-read labels that have emphasis on the [item’s] flavor and fresh, eye-catching images,” Joller says. “Too many claims can clutter the label.”
A consistent look across condiments and other categories also is critical, Hambright states.
“The end goal is for the consumer to become familiar enough with the store brand to recognize it quickly among the various branded offerings, regardless of which aisle he or she is shopping,” he says.
And don’t just emulate the national brands’ packaging —be unique. Hackbarth notes that progressive and successful retailers have gone beyond strictly offering national-brand-equivalent (NBE) products in NBE packaging.
“For years, Wegmans, in particular, has done a great job promoting their signature glass [bottle] barbecue sauce program versus simply offering an old Kraft-style NBE or new Sweet Baby Ray’s-style NBE product,” he says.
And to merchandise products, Hackbarth says retailers should use shippers with smaller-volume condiments, as they provide an opportunity to generate incremental sales and off-shelf exposure. However, for higher-volume SKUs such as ketchup, the best way to generate incremental sales and labor savings at store level is to retail items in open-front display-ready cases every day.
Secondary placement of condiments — such as seafood sauces in the seafood department, mustards in the deli, etc. — also is a good merchandising strategy, Kado says.
And consider cross-merchandising store brand condiments with popular branded items in displays for events such as the Super Bowl or holidays, Giuliano says. Doing so will give consumers more confidence in trying a private label condiment.
Do consider offering private brand condiments with simple ingredient decks.
Don’t be bland — consider blending flavors to create new taste sensations.
Do communicate healthful attributes and other info in a clean, clear manner.
Don’t limit merchandising of own-brand condiments to their section — consider secondary placement.