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Special Report - The Hot List: Food

The Hot List, March 2013

PLBuyer takes a look at the food and beverage categories that saw dollar sales increase by at least 10 percent in 2012.

March 14, 2013

PLBuyer’s 2013 Food Hot List includes food and beverage categories that saw dollar sales across supermarkets, drugstores, mass market retailers, military commissaries and select club and dollar retail chains increase at least 10 percent during the 52 weeks ending Dec. 30, 2012. The chart on pages 10 and 12 shows the 70 categories on this year’s Food Hot List.

At the top, the drink mixes category shows potential with private label frost/whipped/yogurt drink mixes hitting the No. 1 spot on the Hot List this year and private

Click here for enlarged image

Hot List Food chart

label flavored hot drink mixes falling into the No. 4 spot, up 578 percent to $13 million.

While private label fruit drink mixes didn’t make the Hot List, it is worthy to note they account for about $236 billion of the drink mixes category, with a 12 percent share and a 5 percent rise in sales.

“A while back, Indira Nooyi, PepsiCo’s CEO, announced plans to ‘drinkify’ snacks, and indeed the company has launched several products that realize the ambition,” Carol Spieckerman, president of retail strategy firm Newmarketbuilders, told PLBuyer. “Drinks are becoming snacks, and healthy snacking is emerging as a top meal occasion. The category is enjoying an impressive uptick as these trends converge to break drink mixes out of the confines of beverage.”

Continuing American consumers’ obsession with the energy drinks category, private label energy drink mix is ranked 14th on the Hot List with a 187 percent increase up to $35 million, the highest dollar amount at that point on the list. Instant energy drink mixes offer consumers the convenience of having the product anywhere, such as the Starbucks VIA Refreshers instant beverages, which launched in July. The packets are made with Green Coffee Extract to provide customers with “natural” energy.

Convenience is yet again a popular trend on the Hot List, with a nod to healthy living. The private label categories with the biggest total sales that made the Hot List include fresh cut salad and snack nuts, both with more than a billion dollars in sales and more than 10 percent sales growth. What’s more, fresh cut salad has a 35 percent share, while snack nuts take an almost 25 percent share (the fifth and sixth biggest unit shares on the Hot List).

“Convenience and health are undoubtedly major factors; however, consumers’ values around both continue to evolve,” Spieckerman said. “The rise in diabetes and other diet-related health concerns have consumers taking a more proactive and preventative approach to personal health and sensible options that are easy to prepare make the choice easier than ever before.”

Additionally, Spieckerman pointed to rising meat prices accelerating the movement toward protein alternatives. This trend can be seen across many categories that made this year’s Hot List.

Refrigerated yogurt comes in third place when looking at the biggest total sales, at $644 million, up more than 10 percent with a respectable 15 percent share. Yogurt might be the perfect example of a convenience food, and Greek yogurt, in particular, has been in the spotlight in recent years.

“Private brand yogurt sales are enjoying a spike, most likely because retailers aren’t wasting time jumping into premium yogurt products, including the ragingly popular Greek varieties,” Spieckerman said. “Had retailers stuck with basic offerings, they would have missed the party.”

“Back in the 1980s, the only place you could find Greek yogurt was … well, Greece. … Today, Greek yogurt is the star of the dairy case,” said Connie Tipton, International Dairy Foods Association (IDFA) CEO in January during the 2013 Dairy Forum Keynote Speech, “Unlocking Dairy’s Potential.”

Click here for enlarged image

Hot List Food chart

Shoppers seeking lower priced protein alternatives might be turning to yogurt. Dairy is a naturally good source of protein, Tipton said, citing Greek yogurt as also a low-fat or fat-free option.

“Less cooking and greater convenience are also great selling points for dairy,” Tipton said. “In spite of all the cooking shows and the high-end cookware, kitchen appliances and gadgets we have in our homes, we’re looking to cook less. The growing foods are the ones that require less cooking and effort … like yogurt, a stick of string cheese, or an ice cream novelty.”

Tipton goes on to say Greek yogurt is dominating the yogurt category and popping up in other cultured products.

“It has wide appeal to consumers who are looking for healthier snacking options but crave bold flavors and flavor pairings,” Tipton said.

Carob/yogurt coated snacks are also high on this year’s Hot List, up 96 percent to $15 million.

Processed frozen and refrigerated chicken/chicken substitute and frozen fruit come in at Nos. 4 and 5 of the categories with the biggest total sales that made the Hot List, continuing the trend towards healthy convenience foods. Frozen fruit also notably has the second largest unit share of the Hot List, accounting for 65 percent.

Peanut butter is up 26 percent to $394 million, continuing the trend of quick meals, although its counterpart, Jam/Jelly/Preserves was down 1 percent to almost $202 million.

“Going back to the popularity of protein alternatives, peanut butter is the epitome of an affordable, shelf-stable, convenient protein source and manufacturers’ continued flavor innovations are bringing unprecedented choice to this iconic staple,” Spieckerman said.

Perhaps in another example of protein alternatives, canned tuna is up 20 percent and has nearly an 11 percent share of the category and $250 million in sales.

Although healthy foods seem to top the Hot List, consumers still seem interested in a few indulgences. Cupcakes/brownies (part of the bakery snacks category) are up almost 13 percent to $359 million. Refrigerated cheesecakes are up 11 percent to $115 million, and boast a 57 percent share, the third largest share on the Hot List.

The popularity of cupcakes might have retail stores and TV to thank for this trend. “Cupcake Wars” on the Food Network, TLC’s “DC Cupcakes” and CBS’s “Two Broke Girls,” a sitcom about two girls starting a cupcake shop, have brought prime time attention to the sweets.

“Cupcake store chains have given the cupcake a new chic edge,” said Fern Phillips, CEO, Little Big Farm Foods. “At last year’s Fancy Food Show in DC, a taxi driver drove me past Georgetown Cupcake (of “DC Cupcakes”), where the line to get in actually went around the block!  He told me one of his fares paid him to wait (40 minutes) while they waited in line.  Of course the founders having their own reality show has helped fuel their growth, but other chains, specifically Sprinkles, Crumbs and, of course, Magnolia Bakery have helped to add a cultural ‘now-ness’ to the tiny treats.”

“Cupcakes have remained a trend and are a great example of how specialty retail concepts can translate into grocery sales,” Spieckerman said. “The proliferation of cupcake shops is goosing sales and keeping the trend alive. Cupcakes and brownies are also small-portion take-and-go treats that mitigate dessert guilt while addressing convenience.”

“One of the key trends over the past five years is the growth of ‘minis,’ or controlled portions,” Phillips said. “While ‘healthier for you foods’ is one driver here, decadent little treats are another.  Cupcakes fit in perfectly here.  The dichotomy of ‘controlled’ portion and ‘decadent treat’ explains why cupcakes continue to grow as a category.  And a cupcake or a box of cupcake mix is an affordable indulgence for those who are weary of the recession.”

According to Phillips, Mintel projects an additional 20 percent growth over the next five years. New flavors keep the category alive, even within the national brands, so the private label entries follow. 

“Now specialty food private label entries are beginning to include frosting, making the entries a one item purchase, rather than two,” Phillips said.

When it comes to brownies in the grocery aisle, Phillips said the growing segment is in the premium tier of private brands. 

“These items often include special chocolate and other innovative inclusions such as chocolate chunks, sea salt finishes, pieces of peppermint topping, frostings, etc,” Phillips explained. “While the premium tier might be a little more expensive, the consumer can tell a difference, and ‘all natural’ is the price of entry here to reinforce the specialness of the offerings.”

While shoppers might be trying their hands at making their own cupcake creations, or getting inspired to buy them from the bakery department, Spieckerman noted that, while gravy is beloved, it’s “not necessarily in everyone’s culinary repertoire.” This might account for why refrigerated sauce/gravy has a 15 percent growth, nearly 16 percent share of the category, and $66 million in sales.

“Convenience would seem to come into play along with quality upgrades on the part of private label manufacturers,” Spieckerman said of the gravy category.


No categories were repeated this year from the Top 10 of the Hot List from 2012.

Looking at the list as a whole, private label food categories had total dollar sales of more than $9.3 billion, down from the 2012 Hot List where total dollar sales were roughly $11.2 billion.

Total unit sales reached almost 4 billion, also down from the 2012 list where total unit sales reached roughly 4.2 billion.

Egg substitutes have the biggest unit share from the Hot List, with a whopping 78 percent.  The category has increased its share by 27 percent in the past year, signaling a huge leap in consumer acceptance of buying this item as a private label product.

Prepared gelatin had the cheapest average price per unit, while water devices had the highest price.

In a look to the future, Spieckerman predicts the popularity of protein alternatives will continue to escalate for a number of reasons, including rising meat costs, consumers’ health concerns, and a steady movement toward sporadic vegetarianism.

“All three are multi-generationally supported trends,” she said.

Additionally, a rise in extreme weather events and anxiety surrounding their potential occurrence will also impact food sales, she predicts.

“Shelf-stable products that provide nutrition without the need for refrigeration are one example,” she said. “Retailers and manufacturers will have to get used to surge activities driven by extreme cold, extreme heat and extreme weather events.”

  Traditional seasonal planning won’t cover these new realities, she advises. 

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