Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.
Issue link: https://www.e-digitaleditions.com/i/654717
By the Numbers Condiments, dressings, and marinades are a $9.6 billion category, with $1.9 billion in sales of specialty brands, according to the "2016 State of the Specialty Food Industry" report (p. 81). According to further data by Mintel, salad dressings sold through supermarkets represent two-thirds of the category's sales. In its December 2015 "Condiments and Dressings—U.S." report, Mintel cited that sales through super- markets remained fairly flat from 2013 to 2015, while sales among other retail channels increased only 1 percent, reaching $884 million in 2015. Euromonitor also saw flat growth for the category, noting that volume sales dipped 1 percent for 2015 compared to 2014. Continued stagnation is expected in the overall category. "With the rising popularity of ethnic sauces and dips such as soy sauce, sriracha, chili sauces, hummus, guacamole and the like, the salad dressing category is forecasted for only a 0.5 percent com- pound annual growth rate for the next five years," says Amy Stevens, group category, strategy, and insights lead at Harvest Group, a sales agency supporting food, retail, and consumer packaged goods. However, the picture is looking a bit brighter on the premium end. As mainstream companies slashed prices and discontinued lines, shelf space slowly opened up to make way for some f lavor innovations with higher-end ingredients that showcased health- conscious or lifestyle claims. Versatile products with clean ingredients will see the biggest gains moving forward, notes Terry Rafferty, director of vendor man- agement for KeHE Distributors in Naperville, Illinois. The Mintel report supports this, noting that gains experienced in other retail channels—especially within natural food stores, spe- cialty or gourmet stores, supercenters, and warehouse clubs—are a ref lection of consumers' interest in f lavor and health innovation and a desire for these better-for-you and gourmet products. Thirty-seven percent of consumers buy dressings at a specialty or gourmet store such as Whole Foods or Trader Joe's, according to the report. Dressings with an organic ingredient panel or gluten-free claim are particularly poised for growth. In Mintel's research, more than one-quarter of consumers indicated organic products would make them purchase more dressings. And, gluten-free condiments and dressings grew 108 percent from 2013 to 2015, according to Mintel's October 2015 "Gluten-Free Foods—U.S." report. Gluten- free options, whether naturally free of gluten, or formulated to be gluten-free, will continue to be important to consumers, both in natural and traditional retail channels. Sales of certified gluten-free and labeled gluten-free condiments and dressings in natural chan- nels grew 38 percent and 31 percent, respectively. Refrigerated dressings are another growth area. Rafferty notes that the appeal of products with cleaner labels are helping refriger- ated dressings surge. "Consumers view [these] dressings as fresher, better-for-you products," she says. "According to IRI data, looking at the last 52 weeks ending on Oct. 4, 2015, refrigerated salad dressing had increased by over $20 million, while the shelf-stable category had declined by over $20 million," adds Stevens. The Trends Consumers ages 45 and up are more likely than younger shoppers to use salad dressings on salad, notes Stevens. "Yet, people ages 18 to 44 are using salad dressings in more non-traditional ways, such as dips and toppings." While brands are developing innovative f lavor profiles and incorporating international f lavors that are on trend with millenni- als, the classics—ranch especially, for its versatility and wide palate appeal—will remain strong, loyal favorites. According to Mintel, consumers enjoy customizing their con- diments, whether mixing different types together, or adding spices or seasonings. Hybrid products like Trader Joe's Sriracha Ranch salad dressing, for example, appeal to these interests and offer the convenience of only having to purchase one type of condiment to use as a dressing or dip. category spotlight "Consumers view refrigerated dressings as fresher, better-for-you products." Bragg Organic Apple Cider Vinaigrette appeals to health-minded consumers 54 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com