Originally printed in the January 2018 issue of Produce Business.
Appetite for healthier and flavorful options grows among consumers
The healthier eating trend among consumers continues to grow, and salad dressing and dip producers are ready to meet the demand. In this category, that means products that contain fresh ingredients requiring refrigeration.
“Recent research suggests that 78 percent of consumers are trying to eat more fresh,” says Bill Lange, vice president of marketing and consumer packaged goods at C-Fresh of Santa Monica, CA, a division of Campbell Soup Co., which also owns Bolthouse Farms in Bakersfield, CA. “After launching our line of organic dressings, we saw that more than one-third of consumers purchasing our dressings were new to the refrigerated dressings category.”
“Consumers are looking for ‘better for you’ options when it comes to dressings, and refrigerated dressing and dips offer options that align with this movement,” says Ben Woodbridge, director of market research and category management at Litehouse Foods in Sandpoint, ID. “With household penetration down in shelf-stable dressing and up in refrigerated dressing, consumers are migrating to the fresh sections of the store. Consumer research also shows snacking is increasingly becoming a key part of daily life, and more than half of consumers utilize dressing as a dip.”
Charles “Buzzy” Blyer, sales manager at Makoto Dressing in Melbourne, FL, agrees. “Consumers are definitely buying healthier salad dressings and dips. They’re also reading labels and determining which items are beneficial for their health.”
“At Bolthouse Farms, our dressings have fewer calories and fat but are bold in flavor and rich in texture. Consumers get all the creaminess they crave without all the calories,” says Lange.
Even so, a joint report by Information Resources Inc. (IRI), Chicago, and Litehouse Foods using consumer decision tree research — a method used to show how consumers shop in specific categories — shows the refrigerated dressing category (RSD) is shopped first by brand and then by flavor, despite new choices in flavorings.
Within those brands, product offerings that meet consumer demand for cleaner ingredients are trending upward. According to IRI, organic options within the RSD category show a 62 percent growth from the past 52 weeks ending Dec. 3, 2017. Consumer favorites, including Ranch and Blue Cheese, still drive the category, however, accounting for 44 percent of sales dollars.
Fresh means refrigeration — and that usually means placement in the produce department, as opposed to the more familiar shelf-stable salad dressings that are often found on store aisles. Ingredients and processing techniques dictate this placement.
“Bolthouse Farms’ dressings are made without preservatives and undergo high-pressure processing (HPP) to help retain taste and freshness,” says Lange. “Because of this, they must be refrigerated and are placed in the produce section next to the other items that typically make up consumers’ salads.”
“Dips are most often found either in produce, deli or dairy sections. The decision-making for where dressings and dips will be merchandised revolves around if the brand is already found in that area of the store, or where product attributes would most likely be sought by the target consumer,” says Woodbridge.
According to Blyer, the trick is to make consumers aware that the dressings and dips are in the produce department versus the salad dressings and dips aisles. “One way to do this is by cross-merchandising with bagged salads and raw veggies and snacks, such as chips.”
Not Your Mother’s Dressing
In addition to the increasing consumer demand for fresh and real ingredients is the consumer drive for more variety. Gone are the days when consumers settled for onion dip or the usual Ranch dressing on their veggies and salads. Today, consumers crave bold, new and even exotic flavors, and salad dressing and dip producers are ready to meet the demand. Brands that offer a full spectrum of products, from organic to traditional favorites like Ranch, will attract more consumers who are looking to adapt eating habits.
According to C-Fresh’s Lange, there’s a growing appetite for salad dressings with unique spices and flavor combinations that are twists on the classics. “We’re also seeing consumers experiment and shift from shelf-stable dressings to refrigerated options, signifying a movement toward fresh food options,” he says. “This spring we’re launching new flavors across our organic and conventional dressings that leverage ingredient trends like spices and avocados.”
“We’re seeing consumers experiment and shift from shelf-stable dressings to refrigerated options, signifying a movement toward fresh food options.”
— Bill Lange, C-Fresh
“Consumers commonly gravitate toward salad dressings in classic flavors with a twist,” says Lange. “They are also getting into the habit of turning the bottle over to read the labels — looking for cleaner ingredients and lower calories and fat.”
Making the Cut
When it comes to providing space for new salad dressings and dips, buyers often look for what seems to resonate with customers, including price point, unique flavors, and nutritional values and ingredients.
“The industry uses several different means of criteria, such as IRI and Nielsen reporting data, to determine which items are the most popular in different regions of the country,” says Blyer.
“Retailers are looking for insight into consumer preferences, ranging from food flavors to health and wellness claims. Litehouse utilizes flavor performance information through IRI’s Unify platform, finding emerging trends and new opportunities within the category,” says Woodbridge. “We also utilize Mintel’s flavor trends information to track flavors as they become more popular in foodservice and restaurant applications, looking to capture innovation for retail development. Beyond flavor innovation, rest-of-market performance is a key indicator for retailers deciding on new products. Litehouse measures the market using IRI’s performance tools, making sure retailers can see the success of products before adding new UPCs.”
Taste tests provide one way to determine which new dressings and dips may become popular among consumers.
“We always offer a taste test at our presentations to buyers and retailers, and we try to bring enough samples so others in the office can share their opinions,” says Blyer.
Litehouse incorporates consumer feedback through sensory and innovation testing to ensure that products are located within the store to maximize consumer interest. Bolthouse Farms provides product tastings for retailers and shares consumer flavor trends and purchase interest data to help retailers select products that will pique consumer interest and move dressings from the shelves.
“Litehouse utilizes consumer sensory and innovation testing processes on new products to refine and perfect those products before reaching the market,” says Woodbridge. “Consumer testing offers insight into flavor, packaging and design choices, which assists retailers in making decisions on authorizing new offerings. As an example, Litehouse utilized food sensory studies during the development of its most recent OPA Greek yogurt dressing products, showing through these consumer tests what the preferred flavor choices were of the tested choices.”
Keeping tabs on which new salad dressing or dip offerings are sellers and which are not is also important in gauging whether or not a new product is a hit among consumers.
“Most retailers consistently review sales data and have shelf resets once or twice a year. Depending on when an item launches, it can take six to 12 months to determine how a brand is performing on the shelf,” says C-Fresh’s Lange.
“Normally, there is an annual review, and some accounts have a second review during the year to determine how a product is doing,” says Makoto’s Blyer. “Usually, when an item is under-performing, it will be pulled and replaced during one of these periods. Scanner data is reviewed by account frequently, and buyers are very aware of how items within the category are selling.”
Woodbridge says it depends on which retailer you are working with. “There may be a specific timeframe the retailer is looking to review. When working with retailers, we make sure to look at multiple timeframes so we can adjust for any market factors influencing performance. Most common timeframes for comparison are the previous 52 weeks, 26 weeks, year-to-date or 13-week timeframes.”
Produce departments can push salad dressing and dip sales by shining the spotlight on these products via placement and cross-merchandising.
“Location plays an important role when merchandising products. Place salad dressings on shelves at eye level and in the same area where other associated products can be found, like bagged salads or fresh fruits and vegetables, to encourage usage occasions and recipe ideas,” says Lange. “Alternatively, retailers can leverage the larger brand portfolio of products to cross-promote and create a bigger brand block.”
Recipe cards using salad dressings and dips as part of the ingredients can also push sales, and displays and visual signage are other ways to encourage purchases, particularly of new offerings. While consumers tend to go for their tried-and-true brands and flavors, bringing awareness of new flavor offerings can expand customer demand for new choices.
Some of these new flavors include Makoto’s Wasabi Ginger Dressing and Balsamic Ginger Dressing, Litehouse’s Tzatziki Ranch, Avocado Cilantro and Strawberry Poppy Seed, as well as the spices and avocado-based offerings of C-Fresh/Bolthouse Farms.
With more adventurous consumers and the demand for exotic choices, produce departments that are willing to venture out of the standard salad dressings and dips comfort range can be rewarded with an increased ring at the register.