Versatile indulgence

Few products meet the flavor-enhancing capabilities and versatility of retail dips and spreads. Both boost flavor when paired with crackers, chips, breads, vegetables and even some fruits, plus they provide a flavor wallop to vegetable-based salads, assorted protein dishes and more. As a result, sales are mostly trending upward.

For the 52 weeks ending Sept. 6, dollar sales of refrigerated private label spreads totaled $128.7 million, up 9.5 percent versus year-ago sales, states Information Resources Inc. (IRI), a Chicago-based market research company. Total refrigerated spread sales were $912.0 million, up 6.9 percent versus the year-earlier period.

Sales of refrigerated store brand dips totaled $134.8 million, up 4.3 percent from the year-earlier period, while total refrigerated dip sales hit $784.5 million, up 6.8 percent from year-ago sales. Sales of store brand shelf-stable dips/dip mixes, however, declined 5.4 percent from year-earlier sales to reach $15.2 million, while total dip/dip mix sales climbed 8.5 percent to $456 million.

Clean up the label

Americans’ insatiable snacking appetite has upped eating occasions from the traditional three to as many as six per day. Smaller, more frequent meals and snacks, combined with increased socializing at home, provide opportunities for retailers to create extraordinary store brand dips/spreads that taste unique in comparison to — and feature healthier ingredients plus more effective packaging than — those of national brand competitors.

Clean label is the major category trend, says Theresa Rauch, marketing director, Berner Food & Beverage Inc., Dakota, Ill.

“Health and wellness is a major initiative” she adds. “Consumers are looking for ‘better-for-you’ products with simple, easy-to-understand ingredients and low calorie counts. Still, most consumers snack to satisfy a craving — so taste and flavor variety play an important role in snacking behaviors.”

Retailers could benefit by working with suppliers to develop their own brand(s) of clean-label dips and spreads — offerings that are gluten-free and contain no artificial flavors, colors, preservatives or MSG — in a selection of flavors that allows consumers to indulge in snacking “without the guilt,” Rauch says.

“With most of todays consumers documenting their opinions and daily details of their lives on various social media, retailers are selling much more than products — they are selling lifestyles,” she adds.

Satisfy the need for indulgence

Consumers also want dips/spreads to indulge in as a treat any time of the day, anywhere, so flavor profiles ranging from breakfast to late-night snacking — and products in packaging for on-the-go eating — are on-trend, says Jeanne Meeder, director, industrial and consumer products R&D for St. Francis Wis.-based Wixon Inc. a supplier, of seasoning creations, flavor systems and more.

“We see a continued rise in premium products, more sophisticated flavor profiles and more items that fit into the ‘high-quality meals at home’ trend,” she adds.

Health-conscious consumers who want a little indulgence while staying on track in their diet programs are trending toward lower-fat and higher-protein/fiber choices. Wixon is getting more requests for vegetable-based dips and spreads such as hummus, lentil, kale, black bean, avocado, edamame and more, Meeder says. Blended nut and seed butter varieties such as almond, hazelnut or cashew butters, and tahini are also increasing in demand.

Thanks to continuing interest in healthful, flavorful foods and the Mediterranean diet, Greek yogurt — a hot, trendy ingredient — and hummus have become mainstream. Many retailers are introducing all-natural dips made with Greek yogurt, as it carries a strong health halo and a better-for-you reputation.

“We are also getting requests for a broad range of seasoning blends, flavors and masking technologies for several types of applications and flavor profiles using Greek yogurt as the base ingredient,” Meeder says.

Andrew Kramer, brand manager for Cicero, Ill.-based Wild Garden — which offers jarred hummus varieties with no artificial preservatives, single-serving options in to-go packs and combo packs featuring single-serve squeezable tubes and multigrain pita chips — points to dip combinations with chips or crackers as the “biggest category trend.”

Requests for spicy, kickin’, blazing and flaming profiles; more ethnic and regional profile flavors such as Sriracha, chipotle, Asian barbecue and North African; and more sweet and savory dessert-occasion requests such as hummus in chocolate, cookie dough, sweet potato, cinnamon and other flavors continue rolling in, Meeder says. Flavor profiles, colors and graphics that appeal to kids are also growing in popularity.

Fresh remains important but is not the main driver in the category.

“[Fresh] often means healthier, but not always,” cautions Susan Viamari, IRI’s vice president of thought leadership. “Indulgence remains an important driver of snacking.”

Sweet spreads containing sugar alternatives and added nutrition are missing and needed on the store brand side, according to “Nut-Based Spreads and Sweet Spreads — US,” a March report from global market research firm Mintel. Peanut-butter lovers want products with natural ingredients and high protein. They will be more likely to seek out organic, non-GMO or vegan spreads, plus spreads with added vitamins or antioxidants, allergen-free claims, and gourmet or premium positioning regarding other nut or seed-based spreads.

Attract attention

On the merchandising front, retailers might want to create a destination point for store brand dips and spreads in the snack section that highlights portable single-serve, snack-pack products. Many retailers launch a store brand program without fully supporting it in terms of merchandising and marketing, Rauch charges.

“Retailers need to know who their [store brand] customers are and leverage a full understanding about their needs to drive product innovation strategy, improve the allocation of their media spend and enhance the alignment of their marketing and sales programs,” she adds.

The main challenge, Kramer says, is giving store brand dips and spreads as much visibility as national brand competitors have.

Retailers also could leverage store brand dips as a banner differentiator.

“Local flavors, artisan ingredients — targeted to core shoppers at the store level — will satisfy consumers and offer a unique draw,” Viamari says.

Store brand dips/spreads perceived as healthier should be cross-merchandised with other health and wellness products throughout the store, several sources advise. More retailers are providing customization suggestions on-package or at point of sale.

“Suggestions for punching-up milder dips/spreads with added jalapeños, ginger, hot sauce or other zesty ingredients is one way to go,” Meeder says.

Packaging also goes a long way to attract shoppers to a purchase. Retailers should offer clean packaging graphics in bold colors on clear containers that allow shoppers to see their refrigerated dips and spreads, Meeder advises. Most respondents to Mintel’s January “Chips, Salsas and Dips — US” study also said they wanted packaging that keeps dips fresher longer.

Big and small package sizes are both driving category growth.

“Larger pack sizes help support dollar growth — consumers perceive larger packs as offering better value, but remember: Consumers are looking for quick-and-easy solutions for on-the-go [single-serving] consumption as well,” Viamari stresses.

Do approach product development with cleaner labels in mind.

Don’t forget consumers’ desire for a bit of indulgence in the category.

Do consider current trends toward spicy flavors, ethnic flavor profiles and more.

Don’t discount the power of local flavors and artisan ingredients in banner differentiation.