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Category Review Condiments: Flavor on the Side

March 28, 2012


Flavor on the Side

With an increasing number of consumers willing to try new flavors, experiment in ethnic foods and bring some restaurant-quality to home dining, that could spell opportunity for private label condiment sales.
Ketchup and mustard, you’ve got company.
While the condiment category has long since expanded beyond the red and yellow picnic staples, growth is now coming from more sophisticated offerings that tap into consumers willingness to try new flavors and bring some restaurant-style tastes to home cooking. Things like chutneys, dipping sauces and ethnic variations on traditional condiments like mustard and mayonnaise are bright spots in a category whose sales of traditional offerings were relatively flat in 2011.
The $5.6 billion condiment market benefitted from the recession, according to Mintel International Group Ltd., Chicago, as more people ate meals at home. The category grew by 5.5 percent during the recession, according to Mintel, which also projects growth to continue, albeit at a slower rate, through 2015.
But figures from the SymphonyIRI Group show that much of that growth is coming from innovation in the category, rather than the usual kitchen staples. Dollar sales of private label chutneys rose a whopping 24 percent in 2011, and private label mayonnaise and sandwich spreads were up 7 percent. But ketchup (up half a percent) and mustard (down 1 percent) remained stable.
“Everything used to be about price, price, price,” says Ann Stettner, owner of Wild Thymes Farm, Greenville, N.Y. “Now it’s all about innovation. It’s no longer a battle for creating a national brand equivalent. For all these years, companies were trying to re-engineer what the Krafts of the world were doing and making it cheaper.
“Now it’s about being creative to make new products that people can’t get anywhere else,” she says.
This focus on innovation is reflected in the sheer number of products that are introduced each year. According to Mintel, 2011 featured the launch of 262 different cooking sauces, 250 pickled condiments, 37 types of mayonnaise and 18 sandwich spreads.
“I think you’d be hard pressed to come up with any other category that has more offerings,” says Domonic Biggi, CEO of Beaverton Foods, Beaverton, Ore. “People are getting extremely creative with what they’re making. We’re always looking for the next thing to ‘wow’ people.”

Consumers’ willingness to try new products-and pay for them-have rewarded that innovation.
“Now the trend is putting out a high-quality product at an affordable price,” Stettner says. “It’s no longer just who can be the cheapest. Price matters, but it’s not as important as it used to be.”
Like many other categories, ethnic flavors continue to gain market share in condiments, lead by Italian, Asian and Hispanic. But perhaps even more than a move toward established cuisines is the trend to create unique and gourmet-style flavors in prepared foods that were previously found only in restaurants.
How-to and food competition TV shows have helped whet the home cooks’ appetites for these higher-end products. That’s lead to successful introduction of more dipping sauces, chutneys and marinades to take advantage of this trend.
Customers also have embraced a greater emphasis on natural, homemade and organic ingredients when it comes to condiments.
“Consumers now are expecting quality ingredients-we call it ‘food with benefits,’” says Karen Foley, senior vice president of sales and marketing at Tulocay & Co., Napa, Calif. “They’re focusing on better eating habits for the family.”
An increased tolerance for heat also has lead to the proliferation of hot sauces and the addition of spicier elements to mustards and mayonnaise.
“Horseradish continues to do well, even though it is a small category,” Biggi says. “We’re starting to put wasabi in everything.”
Mustards in particular have benefitted from this trend. It’s now common to see dozens of flavored mustards on store shelves. Extra-hot jalapeno, chipotle or horseradish-infused creations can help draw in heat-seeking palates, but other flavors like cranberry, maple, ale, garlic and raspberry are just some of the milder choices that appeal to more gourmet tastes.
“How many more Dijon mustards can you have?” Stettner adds. “You have to innovate to separate yourself from the masses. There’s only so many ways to cut up that pie of existing users. You want to bring new people to the category with innovative products.”

Private label products have been leading the charge in this experimentation. In the condiment category, only mustard and ketchup are dominated by consumer package goods brands-Heinz and French’s combine for 50 percent of the market share.
In all other categories, private label has gained market share in every segment, according to Mintel, and retailers haven’t hesitated to fill their shelves with private label products.
“We’ve found that there is a customer base out there who likes to experiment,” Biggi says. “They find a brand, and then they like to play with it. Try the different things they have to offer.”
Private label may be better at adapting early to food trends before they reach mainstream acceptance. While ethnic sauces are already a growing category (led by Hispanic and Asian staples like salsa and soy sauce), developing tastes for cuisines from India and North Africa create an opportunity to introduce home cooks to these flavors.


Eye On The National Brands

When it comes to condiments, national brands are dominated by Heinz and French’s, which own the ketchup and mustard categories respectively. Flavored ketchup hasn’t taken off like flavored mustard, but Heinz did release a limited-edition ketchup blended with balsamic vinegar. It also has teamed with Tabasco for hot & spicy flavored ketchup.
Heinz has gotten more attention for its packaging innovations, including the new dip & squeeze packages that have invaded fast food in the last year.
French’s latest is a Dijon mustard with chardonnay, adding to the flavored mustard trend.
Mayonnaise is also seeing an increase in blended flavors. Hellmann’s Mediterranean roasted garlic & herbs spread features roasted garlic, basil and oregano. Hellmann’s also features a Dijonnaise spread, which combines Dijon mustard with mayonnaise. Frank’s RedHot has introduced a thicker, spreadable hot sauce in seven different flavors. And both Frank’s RedHot and Tabasco now feature a Buffalo-style hot sauce for those craving the taste of Buffalo wings at home.
Lea & Perrins has made a think version of its classic Worcestershire sauce that’s spreadable for topping and dipping. And even condiments are now tapping into the market for gluten-free products. Kikkoman introduced a gluten-free soy sauce, using rice instead of wheat.

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