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4 2 Store Brands / December 2015 / www.storebrands.info urchased by most households, ketchup is a beloved condiment. However, the competition for consumers' affection from products such as sauces, mari- nades, spreads and dips is becoming fierce. Although 86 percent of consumers use ketchup, dollar sales of condiments in general have struggled, and product innovation is necessary to keep the category relevant, declares global market research firm Mintel. In its December 2014 report titled "Condiments and Dressings — US," Mintel suggests innovations such as the development of specialty products with complex flavor profiles, the addition of heat, the enhancement of healthful properties, and freshness positioning. Encouraging expanded usage occasions and capitalizing on snacking's popularity could also help the category, Mintel says. Consumers in the 25- to 34-year-old age group are more likely than older shoppers to use toppings such as ketchup in nontraditional ways, and to mix and match flavors, Mintel also notes. Dollar sales of condiments showed little move- ment between 2009 and 2014, hovering around $7 billion. When adjusted for inflation, dollar sales actu- ally declined by 8 percent, according to the report. On a sunnier note, Mintel reports that private label performance in the condiment category is relatively strong. "The high penetration rate of product use in a mature category contributes to the store brand presence and acceptance," the company says. Trends with traction A major trend impacting the ketchup category is the continued sales growth of "hot-and-spicy" and "better-for-you" ketchups, reports Mike Hackbarth, vice president, private brand and customer demand for the Fremont Co., Fremont, Ohio. "Jalapeño ketchup is the largest-selling type of hot ketchup on the market," he says. "Sriracha ketchup is new this season and is building [in] consumer strength. Hot red pepper is the third most desirable hot and spicy ketchup flavor." The use of sugar rather than high-fructose corn syrup as a sweetener is also a growing trend, popularized in the specialty trade channels for consumers looking for what is perceived to be a more natural ingredient, he adds. Many progressive retailers have introduced sugar-based ketchup as part of their private brand ketchup portfolio. And organic private brand ketchup now represents more than 50 percent of all organic ketchup sold in the United States. Moreover, private brands have a high penetration within the organic ketchup category, at 75 percent, according to Hackbarth. Today's savvier consumers, whether they are millennials or more traditional family households, have shifted their purchase behavior to the grocery's perimeter departments, Hackbarth observes. Ketchup and other condiments could generate incremental impulse sales if featured together and/or merchandised in-store with complementary fresh products, he declares. They could do so with display-ready open-front cases placed in meat or deli departments. Trends on the horizon One trend that has been successful in the barbecue sauce category is now crossing over into the ketchup category. Restaurants with truly unique ketchup profiles have introduced retail ketchup sizes into supermarkets, Hackbarth says. "The regional Whataburger fast-food restaurant chain in Texas is by far the most successful [at this strategy] because they had their own unique ketchup that customers throughout the South have loved for years. This [strategy] will continue [to be used] as other restaurants or brands grow significantly using unique hot-and-spicy, natural sugar or organic ketchup formulations," Hackbarth says. — D.Cvetan Play catch-up changing tastes and expectations call for innovation to keep the ketchup category relevant. keTchup