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Consumers are making healthier choices across almost all categories, including oils, vinegars and salad dressings. Thanks to that, private label products in these categories have seen increases in consumption.
While numbers haven’t risen dramatically, for the 52 weeks ending June 12, 2011, private label vinegars gained 1.3 percent in dollar sales, flexing their muscles with a whopping 40 percent market share, according to Chicago-based SymphonyIRI Group. Private label salad dressings and oils didn’t fare quite as well, but the potential for growth is evident. Private label salad dressings lost 1.2 percent of dollar share for the same time period, and hold only 13 percent of the category, while private label oils lost less than 1 percent of dollar share for the week ending July 10, 2011, and hold 33 percent of that market.
“Private label is a major part of these categories and is enjoying share gains and a higher consumer awareness,” says Craig Smith, president and CEO of Mt. Prospect, Ill.-based Mizkan. “Private label is widely available and enjoys the leading market unit share in the vinegar category. As private label offerings in oils and dressings increase, we should expect to see a migration toward these products as long as the consumers’ quality expectations are met.”
Expectations are a tricky thing, especially when consumers aren’t willing to give up taste or value in their products.
Louis Gato, CEO of Sovena USA, Rome, N.Y., notes that there has been a significant increase in private label olive oil sales, particularly with those products that have greater cache in consumers’ eyes.
“We’re beginning to see a growing demand for Tier II programs where store brands try to develop a more premium segment,” Gato explains. “They’re adding SKUs such as an organic extra virgin olive oil or specific countries of origin, like Spain, Greece or Italy. The premium segment represents more than 10 percent of the category, and private label needs to tap into this as well.”
Sovena, Gato adds, has tapped into this trend, creating specific country of origin products for its line, as well as creating new flavor profiles and launching new packaging sizes.
Private label manufacturers also are adding new products to retailers’ offerings, giving consumers more options for making their healthy lifestyle a tasty one. Bay Valley Foods of Platteville, Wis., for example, recently launched salad dressings that fit into its premium product tier in flavors like raspberry acai vinaigrette and chipotle bleu cheese.
Michelle Joller, consumer marketing manager for the company, notes these flavors tap into trends evident in the restaurant industry.
Ventura Foods, Brea, Calif., has curried favor with consumers with its line of proprietary blends of private label oils that are high in essential fatty acids and polyphenols, says Fred Zimmermann, vice president, consumer products, for the company.
“These oils allow for healthier frying or sautéing and perform great in cold recipe applications as well,” Zimmermann says.
Like the Biggest Loser contestants fighting each week to keep their spots on the ranch, private label products continually fight for the consumers’ eyes versus the national brands; setting house brands apart from the branded giants is what will help those products proliferate.
“Retailers are taking more control of the messaging via the packaging medium,” says Zimmermann, noting that labels that call out the healthy benefits of products are becoming more popular, and simple, me-too products are going by the wayside. “Today, retailers are branding the store and their private label offerings are a mean to that end,” he says.
Besides branding the store, private label products work to bring repeat customers to the shelves. Once consumers are there, it’s all about standing out from the crowd, starting with simply having enough presence on the shelf to begin with.
“The worst thing a retailer can do is poorly stock their shelves,” says Mizkan’s Smith. “Out-of-stocks or poorly merchandised shelves are a definite negative to the consumer.”
With high margins in private label olive oil, Gato notes that there is a continued increase in shelf space for private label oil offerings, and that the category overall is being treated better by retailers.
“Some retailers have been making the shopping experience more positive,” Gato says. “A better organization of shelf space is happening, sometimes coupled with educational pieces, namely explaining the difference between extra virgin, pure or classic, and light-in-taste.”
Additionally, brand blocking a category, suggests Zimmermann, rather than a shotgun manner of product placement-forcing a consumer to hunt for an item-makes it easier for consumers to find the private label offering from the outset.
Cross-promoting store brand oils, vinegars and salad dressings in the produce department offers great secondary placement, notes Joller, helping increase awareness and trial.
While a reality show like The Biggest Loser is helping get Americans on a healthier track, the reality for private label oils, vinegars and salad dressings is much more true-to-life-the category will continue to grow and chip away at national brand offerings, and that means no losers here.
Eye On National Brands
The national brands are no stranger to the healthy eating game, and when it comes to making their oil, vinegar and salad dressing products healthier, they’re at the forefront of change.
“Leading national brands have recently replaced high fructose corn syrups with sugar to sweeten salad dressings,” notes Michelle Joller, consumer marketing manager of Bay Valley Foods, Platteville, Wis. Joller also noted that the change came from retailer requests for the removal of those ingredients, which store brands also adhered to. Retailers also are requesting the removal of MSG and sodium reduction in salad dressing products, though national brands have not yet made those changes.
Additionally, while private label products try to ply more and more category share, national brands are bringing in star power to hold onto their customers. According to a September 2010 Euromonitor International report, Unilever is leveraging the popularity of Food Network star Tyler Florence to hawk its Wishbone salad dressings, touting the healthy benefits of the product, noting that the oils Wishbone uses help the body absorb essential vitamins found in salad vegetables.