Sauce up sales

From convenience to flavor to variety, the sauce and marinade category is one segment in which retailers really can offer it all. And if they want to step up sales, now is the time to add some creativity into the mix for store brand offerings.

“There is a buzz in the air about innovative cooking, and sauces and marinades offer turnkey meal solutions,” says Mike Post, director of retail sales at Portland, Ore.-based Trailblazer Foods, which manufacturers a number of sauces, marinades and glazes under retailers’ own brands and for foodservice.

According to “Sauces, Dressings and Condiments in the US,” a December 2013 report from London-based market research firm Euromonitor International, more people are eating out now that the recession has ended. But many others are still eating at home, and they are seeking premium ingredients and products that offer a restaurant-quality meal.

Be original

Given all the competition out there, retailers need to make sure their store brand sauces and marinades stand out. To do so, they might want to take the premium-quality route.

“A rising interest in premium products is now sustaining growth for the category, as salad dressings, barbecue sauce and various other areas have seen strong growth in premium products,” notes a Euromonitor category briefing.

Post agrees that it’s critical to break away from the pack.

“Retailers should not mention the names of national brands in their comparisons, which will simply inform consumers of their national competitors,” he says. “Retailers should note that their store brand is better-tasting than ‘conventional’ products rather than expressing their direct competition with ‘Joe Baloney’s’ sauce.”

According to Mark MacKenzie, managing director for North American operations at Collinsville, Conn.-based Passage Foods USA, a manufacturer of regionally inspired cooking sauces for private labeling, two retailers that have a done really great job with their store brand cooking sauces are Pleasanton, Calif.-based Safeway Inc. and Grand Rapids, Mich.-based Meijer Inc. Safeway is targeting millennials with global flavors such as butter chicken, he notes, while Meijer has a pouch program and good package branding.

Think flavors

One way in which retailers could differentiate is through unique flavors. Consumers, particularly younger ones, are not interested in making dinner with a product that looks or sounds boring.

“We know the 99-cent barbecue and teriyaki sauces will always have a spot on retailers’ shelves, but the millennial demographic is demanding products with big, bold, unique flavor profiles, and are willing to pay a premium price,” Post says, adding that Trailblazer Foods is “seeing a proliferation of Asian and Mexican flavors with an emphasis on higher-quality premium products.”

MacKenzie agrees that the target demographic for this category is the millennial generation.

“They are working professionals, time starved and looking for convenience, but they also want something a little bit different,” he says.

On the ethnic flavor front, Asian offerings lead the pack, with a growth rate of 6 percent per year and a sales forecast of $1.1 billion by 2016, according to a Passage Foods press release. Asian flavors for the North American market are based around Indian, Thai and Chinese cuisines, but as the flavor trend continues, it presents the opportunity for retailers to stand out with even more localized flavor profiles.

“Vietnamese will continue to be the next growing one out of the Asian subset,” MacKenzie says. “I think we will see more Peruvian, Argentinean and Chilean. There is a lot more flavor to come out of Latin America yet,” he adds.

In addition to innovative ethnic flavor profiles, some of the hottest sauce on the market is actually hot sauce. According to data from Euromonitor, the U.S. hot sauce market actually grew 150 percent from 2000 to 2013.

Why is hot sauce so hot? In part because of a growing Latino and Asian immigrant population that has a greater appreciation for spicy foods, but also because of our love affair with hot wings — around 27 billion chicken wing portions will be sold across the United States this year, estimates the Washington, D.C.-based National Chicken Council.

“When it comes to hot sauces, the hotter the better,” says Danny Cash, production manager at Lakewood, Colo.-based Branded Sauces, which manufactures a variety of sauces, salsas and condiments.

But just as they are with other types of sauces, consumers are seeking variety in hot sauce, too.

“The category has found extreme growth outside traditional hot sauces,” Euromonitor reports. That means retailers could potentially grab shopper interest with unique store brand hot sauces.

The better-for-you (BFY) and gluten-free trends also remain strong within the sauce and marinade space.

“Consumers are seeking healthier products that, for example, include less sugar, [have] lower sodium, are gluten-free and organic, while at the same time, maintain big, bold flavors such as chipotle and sriracha,” Post says.

Cash says the gluten-free movement is in full swing, adding that all of his company’s products labeled as celiac-friendly are selling extremely well.

Attract attention

Yes, price is important to attract shoppers to trial. And the fact that store brands often can offer a lower price than the national brands is a definite advantage. But providing value for the money spent is critical within the sauce and marinade space.

“My suggestion is to get out of the NBE mindset and offer items that are superior in quality, even if they retail for the same price or more than the nationals,” Post says.

And to get shoppers to try high-quality, good-value store brand sauces and marinades, retailers will want to give some thought to merchandising.

“Grocers are starting to set up true destinations in their stores for cooking sauces, using three- to four-foot sets and featuring their home brand as the center of that set,” MacKenzie says.