Category Review: Oils, Vinegars & Dressings
Trimming the Fat
July 18, 2012
Better for you benefits expected to be at the heart of growth in private label oils, vinegars and dressings.
As the economy continues to nurse its way back to health, Americans are eating out more often. Yet the recession-driven habits of cooking and baking meals and dishes at home is now part and parcel of food preparation, according to a December 2011 report by Euromonitor International.
The research group doesn’t expect this to change, especially since it seems that every week, if not every day, consumers hear more news about the drastic state of American health and are learning that the best way to manage their diet is to cook meals at home.
“Absolutely, more and more of our manufacturers are dedicated to finding healthy alternatives and reformulating recipes, but still keeping the flavor,” says Jacqueline Petty, communications manager for the Atlanta-based Association for Dressings & Sauces.
As Americans continue to grow more obese and worry about the health risks associated with a poor diet, private label oil and dressing products that tout innovative, “better for you” and natural benefits are primed to grow. Combined with health worries — which aren’t going to go away any time soon — consumers are also getting accustomed to innovative additions to products that once were seen as basic commodities.
Bill McCullough, director of marketing for St. Louis-based Bunge Oils, which makes oils for private label retailers, sees the trend of touting better for you health benefits continuing to go strong as consumers become more informed.
“Margarines continue to evolve across the grocery shelves,” McCullough says. “The products are becoming more sophisticated. They incorporate more water and are lower in calories per serving. They deliver greater nutrition through the use of key blended base oils like soy, canola and olive.Margarines are also key carriers for essential fatty acids, vitamins, cholesterol reduction and other oil soluble ingredients. These tailor made products cater to the needs of many different consumers and have lead to a number of new categories over the last couple years.”
Bunge’s mobile oil experts’ food truck has toured the U.S., promoting the company’s oils and healthier food preparation without trans fats for the past few years.
SymphonyIRI Group total U.S. FDMX (supermarkets, drugstores and mass merchandisers, excluding Walmart and club stores) sales for the 52 weeks that ended April 15 showed that total shortening and oil sales rose 6 percent to $2.2 billion, while private label sales jumped 11 percent to $756 million.
OLIVE YOUR BENEFITS
Private label olive oil sales should continue to benefit from a strong consumer perception that extra virgin olive oil is a healthy food that lies within a modest food budget. SymphonyIRI Group’s April 2012 sales data shows overall sales for olive oil down 0.14 percent to $705.3 million, but private label sales up 4.31 percent to $169 million.
The continued popularity of diets following the eating habits of Mediterranean countries with cuisines rich in olive oils works in its favor. Euromonitor forecasts that olive oil sales are expected to rise by 10 percent between 2011 and 2016; retail volume sales are expected to increase by 8 percent.
Euromonitor notes that “consumers’ perceptions of olive oil as the ‘healthiest’ oil are expected to continue boosting demand for olive oil. Americans are becoming more aware of the inflammatory effects of omega-6 fatty acids, which are found in many vegetable and seed oils, including corn and soybean” oil, the reported notes.
It adds that some of the healthiest growth in this category should come from the premium or artisanal end of the market, and notes that retailers that use savvy marketing such as tastings, education and “a romantic story” to enhance olive oil’s allure are finding success.
SAUCES AND DRESSINGS
As with oils and margarines, Americans consumed a bit less sauces, salad dressings and condiments at home versus restaurants, as they perceived the economy improving, but frugal habits linger.
Shelf stable salad dressing sales totaled $1.5 billion, up 2.3 percent from a year ago, while private label sales rose 6.8 percent to $208 million. The fastest-growing types of dressings are those that are spicy or contain chilies or peppers. Those sales rose 3 percent from the previous year.
“Retailers have adopted a fast follower status, keeping a close eye on innovative products produced by the national providers,” McCullough says. “The time between concept and development has been shortened, as consumers are more educated about the nutritional benefits and quicker to accept private label products because of quality and cost savings.”
Eye On The National Brands
Hellman’s recently introduced its new mayonnaise dressing with olive oil. Hellman’s said it has “fine-tuned its olive oil mayonnaise recipe to include 50 percent more olive oil, while still delivering the taste of Hellman’s consumers know and love.”
The makers of Hidden Valley Ranch dressing have introduced “The New Ketchup” — Hidden Valley for Everything Topping & Dip. The new product keeps the same taste as the traditional salad dressing, but has a creamier, thicker texture that is said to be ideal for use on a wide variety of foods and snacks — from burgers and fries to pizza and chicken wings.
Last fall, Bolthouse Farms introduced a completely revamped line of premium refrigerated salad dressings that contain at least 55 percent fewer calories and 75 percent less fat than the leading brand. Bolthouse Farms undertook a calorie and fat-cutting campaign in response to consumer demand, and the results deliver 45 or fewer calories per serving. Bolthouse Farms also added two new flavors: Zesty French and Salsa Ranch.