Wanted: fresh, innovative flavors
When it comes to dips and spreads, many consumers are gravitating toward fresh, innovative flavors. For example, cookie butter or cookie spreads, made with Belgian speculoos cookies (which have a flavor reminiscent of gingerbread), have exploded in growth, according to Margaret Roeder, business development manager for Kruger North America in Oak Park, Ill. She says the name-brand product initially on the market was a niche product that few people had heard of. But when a popular retailer started making its own store brand cookie butter products, the demand increased exponentially.
“It’s the first time in my experience that a private brand has led the category or changed the category,” Roeder says. “This has caused any retailer with a private brand presence to look into it.”
Research from Mintel, a global market research company, confirms the consumer interest for new flavors.
“Respondents are interested in seeing more innovative flavors, including indulgent chocolate spreads (24 percent), as well as new or unusual flavors of nut spreads (21 percent) or sweet spreads (17 percent) such as macadamia butter or plum,” the company says in its March 2015 report titled “Nut-Based Spreads and Sweet Spreads — US.”
And in its January 2015 report titled “Chips, Salsas and Dips — US,” Mintel notes that growth opportunities exist for “fresher spicier salsas and dips that follow the example of hummus, guacamole and yogurt-based dips.”
Kick it up
Stefani LiDestri, co-president of LiDestri Food & Beverage headquartered in Fairport N Y. says retailers should also look for new flavor profiles or those that are popular in ethnic foods.
“The health halo of salsa is shared by up-and-coming dips made from other vegetables including eggplant artichoke red peppers and beyond,” she says.
LiDestri points to baba ghanoush (based on eggplant) and muhammara (based on red peppers and walnuts) as two examples.
“Hummus continues its impressive growth, with roughly half of new launches plain and the other half with an ever-more-diverse set of flavor boosters, including beets, pumpkin, horseradish and walnuts,” she adds.
Retailers willing to spice things up will appeal to millennials, a group with significant buying power.
“We’ve also seen a shift in demographics that continue to influence flavor trends, like the growing immigrant population and millennials,” says Mary Beth Cowardin, director of brand marketing for T. Marzetti Co. in Columbus, Ohio. “These new demographics are looking for spicy, ethnic and flavors that bring ‘heat.’”
Those same millennials are also more likely to snack throughout the day than any other group, according to Mintel’s “Chips, Salsa and Dips” report. Those consumers, then, are looking for more healthful options with fewer added ingredients.
“While chips and dips are perceived as indulgent snacks, migration away from processed foods means consumers are likely to buy products with natural ingredients more than those with ‘free-from’ claims,” the report says.
Retailers should also focus on new flavors of fruit spreads while being transparent about added sweeteners, according to Mintel’s “Nut-Based Spreads and Sweet Spreads” report.
“To improve sales, manufacturers should focus product offerings on spreads with sugar alternatives and added nutrition, which respondents feel are missing from the current market,” Mintel says. “Consumer concerns about fruit spreads’ sugar content and a need for new flavors, nutrition and natural ingredients should be areas of focus for segment players.”
Finally, Dawn Kelley, president and CEO of Barney Butter in Fresno, Calif., suggests easing the minds of those with peanut allergies. Many peanut-free spreads and products are made in facilities that also process peanuts.
“Retailers are leaving a lot of money on the table and losing the carts of shoppers who go to stores with solid certified peanut-free options,” Kelley says. “Peanut allergies affect not only the 1 percent of Americans that have been diagnosed, but 15 people beyond that one person — whether it be family, friends, schools.”
Keep it simple
Those turning to dips and spreads for snacks want them to be not only healthful, but also easy to use. Roeder suggests offering products in different types of containers.
“If a product is spreadable, it is also squeezable,” she says.
LiDestri says dividing dips or spreads with crackers or other pairings can make a snack more convenient and provide portion control.
“Yogurt-like and pouch containers and also divided trays in some circumstances can give consumers everything they need for on-the-go snacking at once,” she says.
Freshness should also be a consideration. Since dips and spreads aren’t often completely consumed in one sitting, shoppers are looking for products that will still taste good later.
“More than seven in 10 respondents say they wish packaging helped keep chips/dips fresher longer. This presents brands with an opportunity to attract more buyers if they can improve packaging,” Mintel says in its “Chips, Salsas and Dips” report. “Fresh dips and salsas with healthy, interesting ingredients and more intense flavors are likely to grow sales but will need packaging that maintains freshness.”
Pick a partner
Since almost every item in the dip and spread category depends on a product outside the category, pairing items together is a key to driving impulse purchases.
“We find that placing our products near the produce they pair with reminds shoppers of better-for-you snacks and lunches for everyone in the family,” Cowardin says. “For example, by placing our veggie dips near the pre-cut vegetables, it encourages shoppers to think differently about the usage of these veggies.”
Roeder also suggests that any retailer launching a new product similar to a cookie butter think beyond a single product. Making a splash in a few areas around the store could get a shopper’s attention.
“We’re seeing it a lot in bakeries and in cookies where it’s using the cookie spread as a filling for sandwich cookies,” Roeder says. “If you have more than one SKU, it tells more of a story and makes more of an impact on the shelf.”
Do innovate with dip and spread flavors.
Don’t ignore millennials, who are seeking ethnic and spicy flavors.
Do consider investing in certified peanut-free dip and spread offerings.
Don’t forget to pair dips with complementary foods such as ’ chips and veggies.