09Aug2009

Dips and spreads are ahead

DOUBLE-DIGIT GAINS ARE commonplace now in the flavored spreads sub-category. But dips are showing new life lately, as a host of new products hit the market. Here’s an overview.

Sabra
Sabra Dipping Co., Queens, N.Y., debuted Spinach-Artichoke Hummus at the International Dairy-Deli-Bakery Show in June, and response has already been so strong that “We project it will be one of our top five items within the year,” says John McGuckin, exec vp of sales.

The new hummus, in 10- and 17-ounce sizes, has already begun shipping. Also new from Sabra are four-packs of two-ounce classic hummus. The snack-size items, designed for onthe- go consumption with chips and veggies, tested well in the club store channel last year when they were offered in 12-packs.

“The wonderful thing about the snack pack item is that its sales appear to be incremental to the hummus category,” McGuckin notes. The four-packs, also shipping now, are line-priced with 10-ounce Sabra hummus.

You can expect more new items from Sabra in the fourth quarter, when it unveils a line of dips (not hummus) that McGuckin describes as “very exciting and revolutionary. They’re low-fat, all-natural, clean-label and delicious. We’ll be presenting them to the trade in the next few weeks.”

There’s still plenty of growth left for the skyrocketing hummus category, now at a household penetration level of about 18%, according to McGuckin. He says the category is approaching $400 million at retail, with about $200 million in supermarkets, more than $100 million in club stores and significant dollars in supercenters such as Walmart and Target. Considering that catsup sales are in the range of $640 million, all this is somewhat astounding for a category most people hadn’t even heard of a few years ago. The good news for Sabra, sitting on about a 40% market share, is that business continues to boom. With sales in double digits for many months now, it turned in a 42% gain in the fourweek period nearest our press time. “The most encouraging thing is that 30% of our growth comes from accounts we’ve had for over a year,” says McGuckin. “And it’s growing every month with our programs, planograms, promotions and demos. Demos are driving trial, and you get 80% repeat purchase with Sabra, based on an outside study we commissioned.”

The only problem Sabra seems to be facing is out of stocks. “Particularly when a promotion is involved, we can be out of stock ridiculously quickly,” McGuckin notes. “The category needs more space, especially on the most popular flavors which run out of stock first.”

McGuckin believes authenticity is key to Sabra’s success, and adds that this quality – along with taste – have kept private label and lower-end brands almost in a separate category that does not compete directly with his brand. Despite the tough economy, he adds, consumers seem to be migrating to the premium end of the hummus category. And the premium end is very profitable without deep discounting, he points out.

“Hummus is a very healthy category,” he says. “If it weren’t, the economy brands would be driving it.”

Fresherized Foods
Fresherized Foods, the Fort Worth, Tex.-based marketer of Wholly Guacamole, has introduced Wholly Salsa, in a 12-ounce peel-and-serve tub. Packed eight to the master case, the salsa carries a suggested retail of about $2.99. The resealable lid provides consumer convenience, and a high-pressure postpasteurization technique maintains the freshness of the product and eliminates health hazards such as E coli and listeria. The process also extends the shelf life to a guaranteed 60 days in-store.

The July-August edition of Fitness magazine rated it as the “best salsa” in its healthy food awards, and Health.com calls it one of America’s healthiest food buys this year. And in June, the salsa won Health Magazine’s “Healthiest Food Award.”

Although they were launched awhile ago, the company’s Wholly Guacamole 100-calorie snack packs have gained not only more distribution but national recognition. Each carton has three two-ounce packages. Shape Magazine called them the best snack in the savory category last year, and Men’s Health gave it a nutrition award for being among the “Top Foods for Men.”

Jay Alley, vp of sales and marketing, notes that consumers are looking for more all-natural, preservative-free healthy alternatives, and these two products fit the bill. With the increased demand – company sales are up by 30% in its most recent fiscal year – the biggest concern today is out-of-stocks.

“In most cases, once you leave the Southwest, we are one facing wide,” says Alley. “But recently, some retailers are adding more space. One retailer in the Northeast is putting in a four-foot set of our products.”

With five flavor profiles for its guacamole and four for its salsa, Fresherized Foods has been working with retailers to meet the challenges of the present recession. It has added smaller, seven-ounce packages to help build trial, and promoted them in FSIs. In some cases, the twoounce size has also helped induce trial and eliminate shopper concerns about waste if a seven-ounce package is not consumed quickly.

T. Marzetti Company
Columbus, Ohio-based T. Marzetti Company has begun shipping three new Veggie Dip Hummus flavors designed specifically to be eaten with vegetables. Varieties are:
Black Bean, combining black beans with traditional hummus, enhanced with lemon and lime juices, good in a Mexican sevenlayer v egetable dip.
Southwest Chipotle, made with three types of beans and four kinds of peppers, spicy but not overpowering.
Garden, made with traditional hummus combined with pieces of carrots, green bell peppers and parsley, goes well with carrots and broccoli.

The items come in 11-ounce tubs, packed six to the case. They are designed to be merchandised as close to precut vegetables as possible. It’s not a stretch: research showed that 66% of consumers inclined to purchase the product would use it with fresh vegetables.

Marzetti did research which showed huge potential for a dip item with a different texture from others now on the market, for merchandising in the produce department. The research also homed in on flavor profiles that would complement vegetables, helping to guide Marzetti’s launch.

In developing the products, the company recognized that the softening veggie dip category needed a jump-start – something really different to fill an unmet need, according to Irena Castle, senior marketing manager. “We didn’t believe that just coming up with another flavor would be a solution,” she says. “Our offer is already very wide, so we decided to bring out something completely new.”

Early results show that the items are turning veggie dip sales declines into gains among retailers that have adopted the products, Castle notes. “We are going after dip consumers, and offering them a healthier alternative,” she explains. “These items are only 70 calories per serving, with fiber and good nutritionals.”

Rising Sun Farms
Rising Sun Farms, has launched Salad Energizers – combos of fine cheeses, nuts, and savory dried fruit, designed to add pizzazz to salads, veggies and potatoes. The all-natural products are gluten-free with a shelf life of six weeks when refrigerated and 18 months when frozen. Consumers just open the package and sprinkle.

Also new: DipnSpreads – an assortment of sweet and savory, allnatural ingredients in a silky base of cream cheese. All-natural and gluten-free, they have the same shelf life as Salad Energizers. They come in 2.5-ounce grab’n go, single serve containers, and in a six-ounce valueadded party size.

Karen McJilton, marketing coordinator, says active and passive demo programs both help grow sales. Training dlei managers on product attributes and selling points also pays off. She adds that all Rising Sun Farms products are glutenfree, as well as free of chemical additives and preservatives.

“We see that despite the economic downturn, consumers are still loyal to Earth-friendly companies, providing all-natural, wholesome products,” she says. “Mothers and other primary caregivers are paying closer attention to what meals and snacks they provide to the family.” Rising Sun Farms was recently named the Top 20 women-owned business in Oregon and within the top 100 overall.

Ventura Foods
Ventura Foods, Brea, Calif., has introduced a classic duo: pretzels and mustard. Dean’s Honey Mustard Pretzel Dip adds a sweet twist to the salty, savory pretzel, although it also goes with finger foods such as egg rolls or chicken nuggets.

The product is made with Dijon mustard and honey, and is low in fat, with 50 calories per serving. It has no cholesterol or trans fat.

Also new: Dean’s Cheddar Cheese Pretzel Dip, with a tangy flavor for pretzels, chips, crackers or baked potatoes. Made with real cheddar cheese, it can be served warm from the microwave or straight from the refrigerator. It has 90 calories per serving, and no trans fat.

Both are line priced with the company’s other dips.

Tribe Mediterranean
In a unique twist, Tribe Mediterranean Foods, Taunton, Mass., is launching pizza hummus, perhaps the first time a company has patterned a product after another food product. Rick Schaffer, vp of sales and marketing, says the new item had great reception in focus groups.

He notes that for the hummus category to continue to grow, retailers need give it more space and build planograms around products that have a point of difference with the consumer.

Reser’s Fine Foods
Reser’s Fine Foods, Beaverton, Ore., begins shipping three new dips under its Stonemill Kitchens brand this month: Creamy Spinach Dip; Roasted Red Pepper Dip; and Peppercorn, Garlic & Herb Dip.
Designed to increase sales on consumers’ favorite varieties, they come in brightly colored 11- ounce resealable tubs with recipes on-pack.

Reser’s is working with retailers on cross-department promotions to help time-starved shoppers put together a meal, says Karmen Olson-Stevens, category manager. “If we can provide value in the form of meal ideas or meal preparation, we’re doing our job and our customers will realize profits because of it. Real growth can’t happen only at the department level, so it’s imperative that retailers collaborate with their own departments as much as they do with their vendors; this is what creates true value for shoppers,” she says.

Asked about information retailers can use to build sales and profits, she notes that in the deli salads category there is a shift towards larger sizes, and that traditional retailers offering these sizes can pick up sales that might otherwise go to club stores.

Further, Olson-Stevens cites data from the 2008 State of the Deli Report from the Perishables Group, which suggests that deli shoppers are less price-sensitive than had been thought. Data in the report notes that deli salads promote at the greatest discount (34%) of any prepared food category, but sales volume while on promotion is among the lowest (14%). In place of deep discounts, retailers should work with manufacturers to create value for shoppers with meal bundling and menu ideas, she says…