- MARKET INSIGHTS
* Top claims in global sauces and dressings include reduced-calorie, natural and non-allergen.
* Gluten-free claims grow notably.
* Mustard, garlic and Caesar rank as top three flavors.
Since 2007, dressings and vinegar launches have been on the decline. Global dressings and vinegar introductions went from 1,281 launches in 2007 to 1,233 in 2010. However, in observing the segment's top claims, more natural ingredients, reduced-calorie contents and allergy restrictions stand as primary trends that drive product innovation. From 2008-2010, the gluten-free stance grew by a notable 116.7% in dressings and vinegar.
Unilever and Kraft Foods were the two most active mainstream companies to introduce dressings and vinegar items; mustard, garlic and Caesar, respectively, ranked as the top three flavors in global dressings and vinegar.
Trends, Claims and Flavors
Gluten-free showed the most robust growth among dressing claims, followed by low-/no-/reduced-allergen, low-/no-/reduced-calorie, and no additives or preservatives. Dietary and health considerations are generally linked to the salad category, but the decline of the low-/no-/reduced-fat claims likely reflects the fact that taste can be an issue, or consumers are finally warming up to the idea of "good fats" associated with olive oils or avocados, for example.
Kosher (+45%), vegetarian (+47%) and premium (+44%) claims also showed some growth between 2008-2010. All-natural (-7%) and organic (-19%) claims declined slightly during that time period.
From 2008-2010, Caesar, Thousand Island and French topped the global flavor trend in the dressings and vinegar segment. Not surprisingly, herb, ranch and honey were not far behind. Because dressings such as ranch and honey are prominently offered as dipping sauces in many restaurants for chicken tenders, chicken wings or bite-sized burgers, their popularity is expected to continue into the future (see chart "Salad Dressing and Vinegar Flavorings").
The increased prominence of allergies has been fueled by the long-standing peanut restrictions present in most elementary schools. Additionally, high-profile celebrities, such as The View's Elisabeth Hasselbeck, have drawn attention to their own allergies to foods containing gluten by producing segments that feature gluten-free products. Dressings are no exception, so manufacturers are stepping up efforts to address this consumer segment by offering new flavors that are clearly labeled.
One example of such clarity in labeling for consumers who cannot tolerate gluten is Salad Girl Lemony Herb Organic Salad Dressing, which is gluten-free. The versatile dressing is said to be the perfect marinade or dipping sauce for fresh lake trout or walleye. It retails in an 8oz jar. Also available are the following varieties: Blueberry Basil, Savory Strawberry, Crisp Apple Maple, Pomegranate Pear, Curry Fig and Sunny Pear. These products were displayed at the All Things Organic 2009 Trade Show in Chicago.
The Sauce Market
A certain degree of confusion is inherent in the condiments and sauces market. Different segments are employed in very distinct food applications. While condiments most often accompany sandwiches, burgers, fries and grilled meats, they are also frequently used as dips, spreads, seasonings, garnishes and ingredients in complex, from-scratch recipes.
Consumer packaged goods that directly compete with condiments can be found throughout the supermarket: in the refrigerated section (dips); the salad dressing section (along with mayonnaise); the spice/seasonings section (grilling rubs); and the international/ethnic foods section.
While variety can generate confusion, it can also stimulate experimentation, trial and purchase. Consumers looked to the well-stocked shelves of supermarkets for a range of interesting choices. Of all condiment sales, 97% took place in supermarkets.
The $1.3 billion ethnic sauces segment saw steady increases prior to the recession, and growth accelerated in 2008 and 2009, reaching 4.8% in 2009, driven by the appeal of salsa and soy sauce, and is expected to reach $1.4 billion in 2011. Meat sauces, a $930 million segment in 2009, was among the fastest growing of any segment, fueled by successful performance of barbecue sauces, in particular; in 2011, meat sauces are projected at just over $1 billion.
In comparison to other condiment segments, ketchup and mustard occupies the middle ground, in terms of annual sales growth. With over 5% of the FDMx condiment market, the segment is a household staple that kept pace with the overall condiments market.
The catch-all segment, "other sauces," grew 8.4% in 2009, faster than any other segment, while growth is expected to slow a little in 2011 (+7.8%). Hot sauces dominate, though even the most successful brand names (Frank's, Tabasco) are comparatively small players.
Populations Influence Market
Asian populations tend to be quite positive about purchasing condiments of an ethnic or Asian persuasion; their population increase should support further growth in Asian condiment sales. This bodes well for consumption from an ever-increasing range of Asian cuisines, which are already enjoying broadening acceptance in mainstream American dining.
Perhaps ironically, Hispanics under the age of 45 decidedly do not buy Mexican sauces, likely cooking much more from scratch. Home food preparation is a tradition maintained by younger Hispanics more than older members of the group; Hispanics aged 45+ tend to be assimilated into a broader range of culinary flavors, and their consumption of most condiments, including Mexican sauces, parallels the total sample.
The Sodium Quandary
When consumers were asked to report the top two nutritional claims important to them, rating 37 and 35%, respectively, were "MSG-free" and "low-sodium/sodium-free." This represents a serious challenge to condiments marketers. Consider the following single-serving information from assorted condiments products: Suree Fish Sauce contains a whopping 55% of the U.S. daily value of sodium in a 1tbsp serving; Mt. Olive Baby Dills (1 pickle serving) come in at 14%, and Grey Poupon Mustard at 5%, per 1tsp serving.
In fact, as monitored by Mintel's GNPD, "low-sodium" and "MSG-free" claims are conspicuously absent among the top 10 product claims across condiments segments. But, the concern for manufacturers should be that consumers are starting to realize nutritional facts panels and typical serving sizes are often unrealistically small. For example, a half slab of ribs is typically bathed in barbecue sauce, not just dabbed with 2 tbsp. Similarly, a single baby dill pickle is a modest snack for most. Consumers may be quietly cutting back on condiment usage, as sodium fears influence their behavior, and manufacturers may need to reformulate, reposition or otherwise pro-actively take note--or, the market may experience less than stellar growth in the coming years.
Only the "other sauces" segment is generally safe from sodium concerns: an extremely hot sauce is generally used in quantities more modest than 1 tsp, and salt is unimportant to the product's flavor profile.
Hot sauce manufacturers should attempt to reach out beyond the extreme-flavor-loving male and talk to a larger audience about the product's ability to deliver an abundance of taste, without large amounts of sodium, via a very small serving. For producers of condiments in all other segments, a few alternatives should be considered:
* Expand product lines to include items that can make low-sodium, or at least lower-sodium claims, especially in sub-segments, such as soy and other Asian sauces.
* Disseminate recipe/serving messages on labels and bottles, and in point-of-sale locations, advertising and promotions, emphasizing the flavor impact of a truly small amount of a condiment.
Diversity in Flavors and Brands
Ethnic sauces deliver much-needed variety for the increasing number of meals cooked at home. Mexican sauces, especially salsa, enjoy popular acceptance and dominate the segment; they are mainstream foods, at this point. Asian sauces, led by the well-established Kikkoman brand and smaller players in Chinese, Thai and Indian cuisine, also add spice to the mix. Tostitos, the main brand that couples a forceful presence in the chips section with another on the salsa shelf, operates at an advantage and is the single largest brand, as a result.
Mexican cuisine's inclusion of legumes as an ingredient and the tomato base of most of the sauces mean Mexican dishes made at home often include a healthy dose of vegetables. Similarly, Asian stir-fries often incorporate fresh vegetables. Use of ethnic sauces could increase with marketing directed to "better-for-you," easy and flavorful cooking at home. Similarly, salsa's reputation as a healthy snack with good nutritional value can and should be exploited. Six out of 10 consumers use tortilla chips, and whole-grain, organic and otherwise healthier chips are seeing growing demand, according to Mintel's "Salty SnacksU.S., August 2009." Coupled with such chips and fresh, lean taco fillings, salsa should see even greater success.
Frank's RedHot Hot Sauce and Frank's Original Cayenne Pepper Sauce are the only brands that show growth in share in 2009-2010. The Frank's brand marketing places a strong emphasis on wing recipes and contests, as well as tail-gating usage; the website offers up suggestions to spur usage. Sports tie-ins help communicate to the male consumer, many of whom favor hot sauce.
Private labels gained share, but private label and brand names combined could not achieve even half the sales numbers of other companies. Hot sauce, in general, appeals to collectors, has many websites for devotees and enjoys a macho, extreme image. It is a very "special" specialty food, and restaurant- and chef-label products mix with odd, often racy souvenir bottles from cities known for spicy cuisine.pf
For more information on sauces, dressings and condiments, type "dressings," "sauces," "marinades" or "dips" into the search field at www.PreparedFoods.com. Or, type "Marinades and Rubs," for an exclusive Prepared Foods' E-dition article on the subject.