Sauce Up Sales
They add flavor, are easy to use and can quickly give any ordinary meal some restaurant-quality pizzazz. So it’s no wonder that sauces and marinades remain some of the hottest shelf-stable food products on the market. According to “Cooking Sauces, Marinades and Dressings — US,” a December 2013 report from global market research firm Mintel, the industry reached $7.4 billion in 2013 and will be at $9.1 billion by 2018. And by following the latest trends for the category, store brands could get their fair share of that growth.
Focus on flavor
One of the biggest trends is tied to flavors inspired by faraway locales. According to Mintel, ethnic varieties are huge, with four out of 10 respondents to an Internet survey choosing “international/ethnic” as their preferred flavor choice when buying sauces and marinades, dry seasoning mixes or dressings. In fact, the entire ethnic food industry is rapidly growing; Mintel estimates it will reach $10.5 billion by 2017.
“Consumers want interesting, exciting food, and they want it now,” says Chee Yean “Voni” Tang, category analyst at Mt. Prospect, Ill.-based Mizkan Americas, adding that restaurants were previously the “gateway” for unique flavors.
Hot and spicy offerings such as sriracha, a Thai hot sauce derived from chilies, and gochujang, a spicy Korean condiment made from red peppers, are in vogue among the ethnic choices.
“The demand for hot and exotic cuisine continues as American palates take their dining cues from fiery and authentic flavors offered by Asian, Latin, Indian and African cuisines,” says Barbara Zatto, director of culinary and sales manager, West for Mizkan Americas.
But when deciding on ingredients for store brand sauces, retailers need to keep in mind the income level of their primary customer base.
“Most premium products are more expensive and are positioned to income greater than $50K,” points out Dave LaBudde, vice president of sales at Fairport, N.Y.-based LiDestri Food and Beverage. “Because the median income in the U.S. has been declining since 2007, and 49 percent of the shoppers had a household income [of] less than $50K in 2012, it seems unlikely that the premium segment should expect significant increase in the near term.”
Offer clean-label versions
As with other food products, the better-for-you (BFY) trend is going strong in the sauces and marinades category. Consumers are definitely more interested in cleaner labels listing ingredients they can understand and pronounce. However, sometimes the addition of certain ingredients is necessary to give the sauce the right consistency.
How could retailers find the right balance between consistency and taste for store brand BFY sauces? One way is to take advantage of new food technologies such as clean-label starches. Starches such as the functional native ones introduced by Westchester, Ill.-based Ingredion are derived from familiar foods, and allow retailers to sell sauces that are able to withstand heat and maintain the right texture — in a package that has identifiable ingredients on the label.
“These products provide food manufacturers the process stability needed while allowing them to be labeled simply as ‘corn starch’ or ‘tapioca starch,’ for example, and deliver the texture that consumers have come to expect of conventional sauces,” says Leaslie Carr, wholesome marketing manager at Ingredion, of the company’s Novation starches. “Starch is a consumer-friendly ingredient and one that most consumers already have in their pantry.”
Besides a shorter and cleaner label, functional native starches also mean being able to include messaging such as “no artificial ingredients” and “additive-free.”
Despite an increasing consumer preference for healthier sauces and marinades, however, the biggest concern for retailers should still be flavor, both LaBudde and the Mintel report note.
“Both brand and own brand can help consumers by positioning their better-for-you products with a focus on flavor and versatility first, and placing these claims as secondary to making flavorful or delicious meals using their products,” LaBudde says, since “many times shoppers will perceive better-for-you products as sacrificing taste.”
Make it easy
Flavor and clean ingredients are only part of the formula for strong sauce and marinade sales, however. Convenience is also a huge selling point, as evidenced by the many new offerings on the market designed for cooking and simmering — with the main purpose of making dinner easy. Retailers could stress the convenience factor for store brand sauces not only by developing these types of sauces, but also via packaging and smart product placement.
“Consumers are looking for convenience beyond the ‘fast and easy.’ They want instruction on how to use the product for a particular dish, as well as other ideas that demonstrate product versatility. Icons on front of pack are great for this,” Tang says, warning, though, that too much messaging “creates confusion and ultimately detracts from the main points about the product.”
The style of packaging itself also can communicate convenience to consumers. Many new sauces and marinades are showing up on store shelves not in bottles or jars, but in flexible pouch packs — a win for both retailers and consumers.
“Flexible pouch packs benefit both manufacturers and consumers, as they reduce transportation overhead and overall supply chain costs for manufacturers and are lightweight and convenient for consumer use,” says Kristen Powers, marketing analytics associate for Mizkan Americas.
Positioning sauce products near store areas such as the meat department can also lead to increased store brand sales.
“Cross-merchandising sauces and marinades near protein sections allows consumers to select cooking sauces as they select their protein and makes shopping convenient,” Powers says.
Source: Mintel’s Global New Products Database
LaBudde says his company sees many retailers that offer meal solutions; for example, they might combine pasta sauce with pasta and bread offerings.
“This gets the consumer to shop the whole store,” he says.
According to LaBudde, in-store sampling can also be “very effective” for getting customers to try a store brand sauce, as can attractive pricing strategies such as 10 for $10.
Last, retailers shouldn’t be afraid to take some chances with their store brand sauces and marinades. Due to the costs of launching a product, Tang notes that it is understandable that retailers and manufacturers want some assurance they will see success. Sometimes, however, success comes through from being first.
“There’s a tremendous advantage to getting to market faster than your competitors when you bring something new to the shelf,” Tang points out. “Consumers are generally interested in what’s new — flavors, [innovative] packaging or perceived benefits — and will buy your product again if it delivers on its promise, regardless of the brand on the front of the package.”
Do look to ethnic favors, including hot and spicy variations, for new product inspiration.
Don’t go too high-end on the premium side unless your shoppers skew high income.
Do consider the clean label trend, but emphasize flavor first.
Don’t be afraid to be first to the market with an innovative sauce or marinade.