Category Review: Sauces and Marinades -- Perfect Partners

September 8, 2008
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Whether teamed up with pasta, meat or seafood, today’s sauces and marinades add zing to everyday meals - and also can help build excitement within private label programs.

Pity the poor pasta deprived of its zesty marinara sauce topping - or the spare rib denied its barbecue sauce kick. Cooking sauces and marinades long have given home cooks a quick, easy and relatively inexpensive means to bring flavor and excitement to the dinner table.

Although some sauce and marinade categories (the less-convenient dry sauce mixes, in particular) have faced somewhat of a rocky road recently in terms of dollar and unit sales, other categories appear to be more than making up for their slowdowns - especially in the store brand arena.

In fact, the private label meat sauce/marinades/glaze and private label seafood sauce subcategories recorded private label dollar sales gains of 15.5 percent and 13.5 percent, respectively, during the 52 weeks ending May 18, 2008 (according to data from Chicago-based Information Resources Inc. [IRI], excluding Wal-Mart, club stores and c-stores). And the private label spaghetti/Italian sauce category also did well, enjoying an 11.7 percent dollar sales increase during the same timeframe.

Sauce Sensations

These days, “good-for-you” messages are attracting consumers in the overall sauce and marinade sector, notes Mike Klanac, vice president of marketing for The Carriage House Companies Inc., Fredonia, N.Y. Specifically, consumers are looking for more nutritional offerings, fresh and natural products and lower-salt formulations, as well as products with less sugar or with sugar substitutes. He adds that today’s “thirty-somethings,” especially, have simply become more aware of the benefits of good health and nutrition.

All-natural premium sauces are doing very well, offers Brad Denis, private label director for Victoria Packing Corp., Brooklyn, N.Y. Not every consumer wants to pay more for organics, he stresses, but they still want healthful, high-quality sauces.

“I think consumers are getting real tired of looking at labels filled with ingredients they can’t pronounce and/or spell,” he says. “We feel the cleaner the ingredient deck, the better.”

But organic sauces and marinades also are gaining momentum in light of today’s health and wellness awareness, says David Bottomley, director of marketing and development for Panola Pepper Corp., Lake Providence, La.

“Though organics [appeal to] only a percentage of consumers, due to [higher pricing], it remains a focus for growth,” he stresses. “All-natural products will always be with us, and have a stable footprint of sustainability, in a global market.”

Of course, “healthful” means different things to different people, says Edward Salzano, executive vice president and chief operating officer of Fairport, N.Y.-based Lidestri Foods Inc. One health-based national trend in pasta sauce - usually an already inherently healthful product - is substituting a “natural” sugar for high fructose corn syrup, he adds.

But health and wellness awareness is not the only trend impacting the sauce and marinade category. As you might expect, the category’s all about flavor, so flavor trends also wield a heavy influence on product development here.

Klanac sees increased interest in spicier offerings across the category.

“Educated, professional [baby] boomers are well into middle age,” he says. “As a result, we’ll see the continued demand for hotter, spicier offerings, as senses are not as sharp as we age.”

JoAnn Aguilar, category specialist for Fort Worth, Texas-based Marketing Management Inc., notes that garlic and herb, lemon pepper, lime and mesquite were the past year’s top private label “mainstream” marinade flavors, citing data from IRI. She says antioxidant-rich pomegranate is growing in popularity as a flavor ingredient, and fruit-based products and spicy-sweet formulations also appeal to consumers.

Outdoor grilling now has become a year-round activity, Aguilar adds, and new exotic flavors are of high interest.

Ethnic sauces also continue to expand, Bottomley says, particularly those tied to Thai, Hispanic, Mediterranean, the “islands” and Asian cuisines.

“The ethnic proliferation is fed by the plethora of quality restaurants, food channels and cooking shows,” he says. “People of most all ethnicities and income brackets like to explore diverse food cultures while eating out or [preparing food] at home.”

Follow or Lead?

Bottomley expects all of the current trends in the sauce and marinade segment to contribute to the growth of store brand concepts.

“Many national brands are adding habanero, chipotle, Thai, Asian and island flavor profiles to broaden line extensions,” he says. “This alone will broaden national-brand-equivalent baseline opportunities.”

Bottomley says Panola Pepper currently manufactures more than 20 SKUs of various sauces in a wide variety of sizes, including multi-packs and gift packs. Moreover, the company has added 10 new flavor profiles within the past 18 months and can duplicate most national brands to achieve an equal or better-quality product.

Retailers that already boast strong private label programs have an opportunity to be the innovators here, Bottomley adds, moving along with or ahead of the national brands.

Aguilar agrees, believing national-brand-equivalent programs should follow the national brands’ lead, but premium private label programs should “break away from the mainstream flavors” and look for high-quality formulations “similar to unique gourmet products” - an area with significant growth potential.

“We are continuously sourcing for new innovative items to present to our retailers,” she notes, “[and] offer marketing plans for store brand product lines and provide market data trends reports through secondary data.”

Victoria Packing’s Denis notes that consumers are basing their like or dislike for a private label line on main commodity items such as premium pasta sauces.

“Thus, our sales for premium sauces are doing very well,” he says. “We are also seeing our USDA meat sauces on the rise from a private label standpoint, as it’s a meal solution in a jar.”

Klanac stresses caution, however, when it comes to innovation. And that includes packaging, too.

“First, one needs to determine if the innovation is a fad or a trend,” he explains.

For example, squeeze packaging - which now adds a convenience element to jellies, salad dressings and barbecue sauces - is likely here to stay, he says, and to soon include salsa, taco sauce and more. In addition, pouches and to-go cups should increase in popularity in the years to come.

“Organics, on the other hand, may transition to more ‘all-natural’ alternatives as costs of organic ingredients make offerings cost-prohibitive in the marketplace,” Klanac says.

Lidestri’s Salzano says it ultimately boils down to the specific retailer and what it wants its own brands to say and do. Some retailers are looking to lead, not follow, in terms of new sauce and marinade launches. In contrast, other retailers might have a store brand message more aligned with value pricing, and might be better-served by the follower route.

Moving Right Along

Whether the sauces and marinades are old standbys or trendy newcomers, retailers can take a number of steps to build sales of these store brand items.

Cross-merchandising is the most logical first step. Although sauces and marinades come in myriad flavors and boast numerous usages, they all have one thing in common: They’re meant as an accompaniment to another food product.

“Cross-promoting private label brand pasta with the sauces is a natural,” Denis says. “We cross-promote our fra diavolo sauce, which is a spicy marinara, anywhere in the seafood department.”

Marinades, barbecue sauce and steak/Worcestershire sauce pair up logically with beef, chicken and pork, Aguilar adds.

The combinations - ideally with other store brand offerings - are virtually endless, and can be varied by seasons, holidays and special occasions.

“I think in today’s economic times [it’s important] to try to show the consumer how they can put together easy meals by using a number of corporate brands together,” Salzano says.

Recipes also work very well, he adds. Here, suppliers can be a welcome source of ideas.

“We try to work with our customers in sharing our internal expertise,” Salzano says. “We have executive chefs that are on staff, putting together recipes, putting together some cross-merchandising [suggestions], so that retailers can present a home meal replenishment program.”

Traditional approaches such as temporary price reductions, special couponing and off-shelf promotions also will increase exposure and growth, Bottomley says.

Secondary placements in display shippers outside the center store in perimeter sections present a major merchandising opportunity, Klanac adds. Ditto for co-marketing programs in which two to three store brand suppliers come together to help retailers grow the store brand overall through in-pack/on-pack coupon offerings.

“Finally, display pallet programs, band packs and mixed cases are all proven winners,” Klanac says. “One of CHC’s newest initiatives is our ‘Cube Shipper’ program, whereby a variety of our sauces and marinades are available in a very easy-to-assemble self-contained display shipper. The outer carton serves as the base and is perfect for secondary placements with complementary items - for example, marinades in the meat section.”

Denis says Victoria Packing actually is going a “step ahead” in private label marketing by participating in the promotion of retailers’ private label items even though “it’s always been a net-net deal.” Along with its brokers, the company is willing to be part of the retailer’s scan, end cap, demo or ad program.

“We strongly feel that once the consumer tries our sauces, they become brand loyal,” he adds.

Outside the merchandising and promotion arena, communication is critical to building store brand awareness, Aguilar says. And a major part of that communication is accomplished through packaging.

“Packaging, of course, is key to the equation, with only seconds to attract the consumer,” Bottomley maintains.

Klanac says current packaging trends include “greener,” eco-friendly materials, as well as labels that feature healthful messages such as “gluten-free” or “fortified.” PLB

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