GROCERY: BBQ Sauces and Marinades: Pouring it on

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GROCERY: BBQ Sauces and Marinades: Pouring it on

By Howard Riell - 07/01/2007
BBQ sauces and marinades are helping Americans to maximize their fondness for grilling -- and retailers to ignite some excitement in the center store and beyond.

The category is thriving thanks to a variety of factors, most notably consumers' increasing love of grilled meat, seafood, and vegetables, and their desire for new and exotic flavors, many of which they're being exposed to for the first time on cooking shows.

The category is also diverse. National brands continue to do the volume, private labels to offer alternatives, and small local players to add spice, variety, and regional flavors. All three are succeeding in helping shoppers trade up to more premium products. Solo and cross-merchandising on and off shelf, together with promotions and sampling, continue to spur trial and sales.

A look at the condiment segment reveals it to be both popular and mature. According to Information Resources, Inc. (IRI), barbeque sauces generated more than $351 million in sales during the 52 weeks ended March 25, 2007, a 0.11 percent year-to-year gain. Private label trailed Kraft, Sweet Baby Ray's, and KC Masterpiece, with more than $24 million in sales, but down (1.26 percent) compared with the previous year. Also down slightly year to year: steak sauce (1.79 percent, to $172 million), Worcestershire sauce (2.11 percent, to $58.5 million), and meat sauces, marinades, and glazes (1.23 percent, to $236 million). Hot/Cajun sauce, on the other hand, rose 6.4 percent as a category, to over $159 million.

As for consumers, research conducted by Weber-Stephen Products Co., the Palatine, Ill.-based manufacturer of outdoor grills and grilling accessories, shows that more than half of all outdoor chefs now grill year-round -- even in below-freezing temperatures.

'Strong category'

"It's always been a strong category with us," says Forrest Norvell, category manager for Piggly Wiggly in Charleston, S.C. "It's flat, but it's good volume."

Piggly Wiggly limits the number of national brands placed in its 12-foot section. "We include a lot of locals. Those who don't make their own barbeque sauce will use something that's very local to them. We have quite a bit of space for our local people, who may make it in the bathtub or wherever." The balance of sales, however, still comes from the nationals like Kraft, Sweet Baby Ray's, KC Masterpiece, Bullseye, Hunt's, Lawry's, and others.

Brands also have seasonal strategies, Norvell points out. "When it gets a little cooler, you see a lot of the mustard- and vinegar-based brands promoting. Summertime is when the national brands take over -- the Krafts, the Hunt'ses -- and private labels."

Piggly Wiggly, he adds, does "quite a bit" of off-shelf merchandising in the category, though not as much with the regional players. "The volume is with the national brands," he explains. "They're the ones we put out there; then with our private label we try and compare on the shelf with price and quality."

Other retailers are seeing growth in the category via new entries.

"I actually think that marinades have picked up quite a bit," says John Brown, store manager at Richboro Shop 'n Bag in Richboro, Pa. "I'm carrying more SKUs and getting more requests for them. We put them right up in our meat department, on a little island shelf, and they do well."

Richboro stocks about 40 brands of bottled marinades, plus dry product in envelopes. Top sellers, says Brown, are Lawry's, Emeril's, and other brands with exotic flavors. "Customers experiment, but they lean toward what they like."

Not everyone, naturally, is enjoying the same success with marinades, however.

"To be honest with you, we're not doing a whole lot with marinades," says Warren Crills, grocery buyer for Stauffer's of Kissel Hill, a four-store operator in Lancaster, Pa. "We actually got out of the private label business in marinades in the beginning of this year. Our turns on it just weren't that great."

On the other hand, he adds, "We're doing well with barbeque sauce." Indeed, Stauffer's recently expanded its private label barbeque sauce offering to six SKUs.

Capitalizing on potential

The key is to awaken the category's potential by linking with a popular cooking trend, or consumer preference for food with healthy attributes. However, that trend must be locally relevant, retailers report.

Along the lines of the first strategy, in March Weber-Stephen signed a licensing agreement with ACH Food Cos., a subsidiary of London-based Associated British Foods, to produce a new line of seasonings and marinades called Weber Grill Creations. The product is being marketed nationally through the grocery, mass merchandiser, wholesale club, and drug store channels.

In addition to eight seasonings, the Weber Grill Creations line includes six marinade mixes: White Wine & Herb, Black Peppercorn, Italian Herb, Chipotle, Tomato Garlic Pesto, and Mesquite. The suggested retail price is $1 per 1.12-ounce single-use foil laminate package.

"Essentially, what we're doing is capitalizing on the growing trend in grilling and grilling-related products, adding flavor, and enhancing the overall grilling experience," says John Leonardo, brand manager for ACH Food Cos. "People aren't looking for just beef or steak marinades. They're looking for unique flavor profiles that are really going to enhance their dish or meal. For us that's the key."

A print ad campaign behind the tagline "Be a Backyard Hero" has hit mostly women's-interest publications, and includes coupons ($1 off two marinade mixes or one seasoning) and Sunday FSIs.

Additionally, ACH is collaborating with Coors Beer and Tyson Foods in a campaign that also includes POS displays at retail, along with a free grilling guidebook with recipes and a sweepstakes contest.

The growing popularity of organic and natural products also bodes well for growth and diversification of the sauces and marinades section, at least for some retailers.

McGinnis Sisters Special Food Stores in Pittsburgh is doing well with health-and-wellness-oriented entries in the category, says Sharon Young, co-owner, along with her sisters, of the independent operator. The segment aligns well, since all of McGinnis Sisters' meat and seafood is all-natural and hormone-free.

The grocer stocks organic items side by side with others. "We find there's better movement when we do that," Young notes. "Some people are afraid of the organic aisle."

Young reports that the category is "very strong" in her two stores (a third is scheduled to open in November). "In fact, it's a signature section, since we're a high-end meat store and very big in perishables." The 12-foot section stocks as many as 200 SKUs. Among the most popular: "Anything with citrus and anything Asian."

"Organic meat is the fastest growing of all the organic categories," notes Kory Kazimour, senior brand manager for Norway, Iowa-based Simply Organic, the all-organic brand of spices and seasonings from Frontier Natural Products Co-op. "It's growing at about 67 percent on an annualized basis." In March Simply Organic added four new items to its line of organic grilling seasonings and marinades.

Auburn, Maine-based World Harbors, Inc. manufactures marinades and cooking sauces, among other products. In 2005 it introduced the Acadia Naturals line, featuring five flavors without preservatives, animal byproducts, or GMOs. This past March Acadia Naturals added three new products: Garam Masala Madras Curry, Ginger Blueberry Teriyaki, and Cilantro Lime Wasabi.

"I have been chastised, and told that I am absolutely nuts to even try and compete in this category," due to the number of players in it, says Bill Kelley, founder and owner of Smokin' Willie's BBQ Sauce in Northridge, Calif. "I have always been adamant about having no high-fructose corn syrup. When I first started, my manufacturer and formulator were going, 'What's the big deal?' Then all of a sudden on TV they started talking about no high-fructose corn syrups or juices for kids. The demand just grew and grew."

Piggly Wiggly is one operator that hasn't shared others' success with natural and organic brands in the category. As Norvell recounts, "We put one in, and it's been a flop so far. I think organic is a way of life down the road, but not at this particular time [in barbeque sauce]. I don't know why [consumers] would want to put an organic BBQ sauce on a pig or chicken that may not be organic."

He finds that it's still the more traditional flavors -- hickory, honey, and original -- that sell best.

Squeeze play

Meanwhile the small regional players will continue to add spice and variety to the category, and perhaps continue as well to be squeezed out by national and store brands.

"There are not a lot of small players left anymore," notes Ed Schaefer, president and c.e.o. of Silver Spring Gardens in Eau Claire, Wis. "You'll get really small players, the specialty food niche guys, [but] it's very hard for them to increase distribution. It's shrinking."

Within private label, says Schaefer, retailer brands are "all moving away from the lower-end, price-driven products, and coming out with some really good, higher-quality, well-priced -- not high-priced -- products." Family-owned Silver Spring markets horseradishes and specialty mustards.

Stauffer's Crills says he sees a future for regional players "as long as they have a niche. There might be a different flavor that some of the mass players like Kraft or Sweet Baby Ray's might not be able to come up with." Local popularity will remain an ace in the hole. An example near Lancaster, Pa. is Hess' Original, whose owners are known and highly visible locally.

Stauffer's has also expanded the number of glazes it carries. One, an apricot/ginger/teriyaki glaze under its own label, does "exceptionally well," according to Crills. It's also merchandised at the stores' seafood counters, and used in-house in prepared foods. A new label and increased promotional activity are planned.

"From a national standpoint, Kraft has gone with an EDLP program (79 cents per 12-ounce bottle) through the summer months," says Crills. Sweet Baby Ray's "by far is still one of our top barbeque sauces when we have it in an ad. When you have a private label priced at 69 cents, a lot of times people just figure, 'I can buy Kraft for a dime more.'"

Unlike many other retailers, McGinnis Sisters "squeeze[s] off the national brands," says Young. "If [consumers] can get them at regular grocery stores, they're not special anymore; then it becomes a price issue." Her stores stock just three or four of the national brands.

"It's fun to see all the different ones that come in," reflects Piggly Wiggly's Norvell. "I have presentations from new barbeque sauce vendors about every other week." He always sends them on their way with some encouragement. "I tell them, 'Go where you're strong, promote it, do a good job. We have scan data, we can see what you're doing, and if it's something viable for all the rest of our stores, then OK.'"