Tuesday, September 6, 2011

RFF Retailer: Dips Go Hip

Dips Go Hip
Vanessa L. Facenda
June 20, 2011

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Gone are the days of artificially flavored and colored dips sitting on retail shelves.

Dip quality is improving as consumers demand fresher, higher-quality and better-tasting products.

“We are seeing a trend away from dips that are made with fillers, stabilizers and oils,” says Jon Levy, senior associate brand manager for Northfield, Ill.-based Kraft Foods Inc. “The products are becoming fresher and less processed.”

Greater shopper interest in dips that are better-tasting, healthier, ethnic-oriented and exotic is spurring innovations as merchandisers work to jumpstart sales.

Refrigerated dip revenues totaled $460.6 million for the 52 weeks ending April 17, 2011, up 1.74 percent from the year-earlier period, reports SymphonyIRI Group, a Chicago-based market research firm. Unit sales were 184 million, up 0.38 percent.

In its 2010 State of the Snack Industry Report, SymphonyIRI Group notes that 55 percent of consumers are more likely to eat what tastes good rather than what is healthier.

Yet, it also notes that 71 percent of consumers are trying to eat healthier, and that the healthier and indulgent snack segments have had annual growth rates of 4.4 percent and 1.2 percent, respectively.

Kraft is among the suppliers focusing on wellness. The company in April began rolling out sour cream dips under the Breakstone’s and Knudsen brands that are made with real sour cream and no oils, Levy says.

The four varieties—French Onion, Ranch, Southwest and Buffalo—are available in 16-ounce containers with a suggested retail price of $2.99.

Sea Gold Seafood Products, New Bedford, Mass., also is emphasizing wellness with its line of seafood-based dips, says Michael Trazzera, chief executive officer.

The company, which is leveraging shoppers’ perception of seafood as a healthier alternative, is marketing Cajun Seafood & Crab Dip, Seafood & Shrimp Scampi Dip, and Buttered Seafood & Lobster Dip.

The suggested retail price for the 7-ounce containers, which are typically merchandised in specialty coolers in seafood departments, is $2.99 to $3.99.

Salsa- and yogurt-based dips are also being positioned as better-for-you offerings.

Sabra Dipping Co., New York, for instance, is rolling out all-natural Greek Veggie dips that are made with Greek yogurt and low in fat. Varieties include Roasted Garlic, Spinach and Artichoke, Sundried Tomato and Onion, and Fresh Herbs.

The company claims that the dips have 67-percent fewer calories and 88-percent less fat than the leading sour cream dip.

The items are available in 10-ounce containers and have a suggested retail price of $3.59 to $4.59. In addition, Sabra also is launching all-natural Salsa in four flavors: Chunky Pico de Gallo, Classic, and Homestyle in 16-ounce containers, and Southwestern Style in a 14-ounce container.

All varieties are fat free, gluten free and kosher.

The suggested retail prices are $3.49 to $3.99.

Also offering new selections is T. Marzetti Co., Columbus, Ohio, including Otria-branded Greek Yogurt Veggie Dip in 8.75-ounce packages with a suggested retail price of $3.49.

Such items are becoming prevalent as snacking expands into more food categories.

“Peoples’ perceptions of dips are shifting,” says Mary Beth Cowardin, T. Marzetti senior marketing manager, produce dips. “The products are being seen as not only a party platter option, but also as an everyday snack. Consumers are eating small meals more frequently throughout the day and veggies with dip or hummus is being perceived as a health and wellness alternative.”

Carlos Canals, president and chief executive officer of Taunton, Mass.-based Tribe Hummus, notes that hummus also is increasingly being used as both an ingredient and on-the-go snack.

Hummus typically is low in fat, and high in fiber and protein.

“Hummus is great with fresh vegetables so it is a healthy meal option, and an easy way to increase vegetable consumption,” Canals states.

“The culinary experience is driving the category,” adds Jerry Goldner, Tribe director for customer marketing. “Consumers’ desire to have more exotic flavors and the Mediterranean aspect of hummus is an allure.”

Tribe is offering 21 selections of hummus in either organic or all-natural varieties in three lines: Classic, Organic, and Origins.

Origins uses a special tahini, is smoother, and features toppings such as Spicy Red Pepper and Tomato and Garlic. Products range in size from 8 ounces to 16 ounces with suggested retail prices of $2.99 to $4.99.

John McGuckin, Sabra executive vice president of sales, says hummus has a large growth potential, noting that its household penetration is just 20 percent, compared to 80 percent for salsa.

“There has been very little marketing for the hummus category,” he states. “Most of it is trade driven, so there is tremendous upside as mainstream marketing increases.”

Sabra offers 14 hummus varieties, including two new flavors: Basil Pesto and Buffalo Style.

Products are available in 10-ounce containers with suggested retail prices of $3.59 to $4.59, and 17-ounce containers with suggested retail prices of $5.99 to $6.99.

Sabra’s hummus line also includes singles—four-packs of 2-ounce containers—that retail for about $3.59.

Also launching new dips is Blount Fine Foods, a Warren, R.I.-based supplier of private-label offerings.

The company’s newest varieties include Panera Bread- and Legal Sea Foods-branded selections in 7-ounce containers with a suggested retail price of $4.99.

Suppliers say that rolling out such added options creates excitement and will boost activity.

“Versatility and new and interesting flavors are all paramount to growth,” Blount’s Sewall says. “Retailers need to stay on trend with product offerings and offer enhanced items.”

McGuckin notes that Sabra wants to create a “dips destination” in the deli, a department in which shoppers are more willing to experiment.

Sea Gold’s Trazzera, meanwhile, says “buy one, get one” promotions and in-store demos also are effective merchandising techniques.

He suggests that retailers also regularly rotate demos to spotlight the range of new products

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