Smart Snacking

Health-and-wellness issues are guiding development of new refrigerated dip products.

Consumers are making food choices that are part of a well-balanced diet while still seeking great taste and variety, and makers of refrigerated dips see strong category growth potential.

“From a health-and-wellness perspective, consumers are also eating small meals more frequently throughout the day, and veggies with dip is a terrific option,"says Mary Beth Cowardin, senior marketing manager for produce dips at Columbus-based T. Marzetti Co. “As a result, people's perceptions of dips are shifting from being used not only as a party platter option, but also an everyday snack.”

Refrigerated dips are enjoying healthy sales as well, especially in the wake of the recent perennial spike leading up to Super Bowl Sunday. Sales of refrigerated dips were up 2.8 percent to nearly $445.7 million for the year ending Dec. 25, 2010, at grocery stores with at least $2 million in sales (excluding supercenters), according to Schaumburg, Ill-based Nielsen.That follows a dip of 0.1 percent for the same period a year earlier and minor gains the two previous years.

Units sold also were up 2.8 percent for that period, following an anemic 0.2 percent increase for the same period a year earlier and two previous consecutive years of declines.

Name-brand dips hold an especially strong position, especially in a dairy department otherwise dominated by private label products. Branded products held an 80.3 percent share of the dip segment for the year ending Jan. 22,2011, at U.S. food, drug and mass merchandiser stores (including Walmart), according to Nielsen data.

“In this $450 million category,we are seeing a snacking society really come to life,” says Tracey Altman, VP of marketing at Saginaw, Texas-based Fresherized Foods, maker of Wholly Guacamole brand products. “Dips are not just for parties anymore. Consumers are adding them to dinner or using them as a mini-meal throughout the day.”

Altman says the line between condiments and dips is blurring:“Healthy dips like hummus, salsa and guacamole continue to be on the rise as their usage extends to the lunch and dinner table.”

Cowardin concurs:"Consumers are looking for foods that not only taste great, but [also] have more nutritional value. As a result, consumers' interest in refrigerated dips that offer a well-balanced snack option is rising, and innovative choices, like Marzetti Otria Greek Yogurt Veggie Dip, are becoming increasingly popular.”

Dip Into Goodness

From the probiotic power of yogurt to the addition of'superfood” ingredients, dips are taking advantage of the wellness trend from many angles.

Gluten intolerance and celiac disease are of increasing concern to consumers, notes Leslie Gordon, marketing director at Woodbridge, Ontario-based Summer Fresh Salads Inc. “All of our hummus [products] and some of our dips are gluten-free, offering consumers a wide selection. We also use symbols for vegetarian and lactosefree, as these are also areas of increasing concern,” she says. “Another trend is that consumers want their foods to have more than one nutritional benefit. Hummus is relatively low in fat and a good source of protein, and Summer Fresh has added superfoods like avocado and sweet potato, which add their own additional set of nutritional benefits.”

And though avocado is considered a superfood, “guacamole still carries a bad rap with some consumers,” Fresherized's Altman says. “They look at the fat and don't distinguish between good fat and bad fat. Our guacamole and salsa are available in the produce section, since they are all natural and have no additives or preservatives.”

The challenge for some wellness products is convincing consumers they taste as good as what they've been used to. “Consumers still buy traditional sour cream and cream cheese-based dips that have been around forever, but new growth comes from products purporting healthy nutritional and natural ingredients,” says Dominick Frocione, VP of sales for Ward Hill, Mass-based Cedar's Mediterranean Foods Inc. “We are currently launching an extended line of Greek yogurt-based dips, which are much healthier than sour cream … [and] rival traditional flavors like French onion, blue cheese and spinach.”

Healthful options are available in convenient packaging formats as well.“New refrigerated dips are trending in a healthier direction,”says Sabrina Kautz, associate brand manager at White Plains, N.Y.-based Sabra Dipping Co.“They are providing consumers meal replacement solutions such as smaller sizes and options, [among them] Sabra's Grab N Go.”

Wholly Guacamole's 100-calorie snack packs continue to rise in popularity. “They can be used with veggies or crackers as a snack, or as a topping for a grilled chicken sandwich,”Altman suggests.

Gordon, too, agrees convenience is gaining importance."We have relaunched our Snack'n Go line with less packaging. It is a convenient 2 ounces of hummus with flatbread for a healthy snack,"she explains. Summer Fresh also offers individually packaged 2-ounce portions of hummus and a variety pack of dips with four complementary flavors.

Also chasing the growing popularity of Greek-style yogurt, Sabra is launching a Greek yogurt-based dip this spring, and will add a spinach and artichoke variety to its hummus line.

Marzetti's Greek-based offering, Otria, comes in five varieties that promise a light, creamy texture; herbs and spices; omega-3 fatty acids; and 60 calories per serving. With cross-merchandising in mind, Marzetti suggests pairing Otria with mixed vegetables or pita chips, or using it in pasta salad or other recipes that call for mayonnaise.

“Marzetti continues to work with retailers to drive sales, whether it's through in-store programs like 'shelf talks,' product demonstrations, or consumer promotions such as online and print advertising, to bring people into their stores,”Cowardin says.

Dip Destinations

Jay Alley, Wholly Guacamole's VP of sales, says the aim is to “interrupt the shopper to give us the opportunity to sell our brand and product. We work closely with retailers on displays, shelf talkers, pricing and making the produce a destination for great eating. The most successful retailers promote at holiday and non-holiday times. During holidays, they build aggressive displays themed to the occasion. They have also built destination sections for all dips and dressings.”

Snacks and Sacks

As the smoke cleared after the most recent big game, Colchester, Vt.-based MyWebGrocer examined shopper data from the 2010 Super Bowl to see what foods — and brands — would be likely to experience sales increases this year.

MyWebGrocer compared purchases from the week of last year's 2010 Super Bowl to the week prior, and saw a major increase in several categories. Sales of dips went up 46 percent, with Heluva Good and T. Marzetti leading category sales. Tortilla and corn chip sales soared 32 percent, while potato chips jumped 15 percent. Brands leading these category sales included Tostitos and Lay's.

To help with building destinations, Alley says that Wholly Guacamole has been testing rack systems and portable refrigeration units.

Point-of-sale promotions are “always a challenge,"Cedar's Frocione concedes. “Sampling is costly but in some cases worth the expenditure. For the most part, we like to push new products like this as line extension of our brand.”

According to Sabra's Kautz: “We believe that sampling is the best way to get consumers to try our products. We utilize this vehicle both through grocery demos and out of store. We also partner with retailers frequently for consumer loyalty programs in store in order to customize the experience for shoppers.”

Another challenge is products that walk a fine line in shoppers' minds.“l strongly believe dips and hummus should be merchandised separately in the same counter,”Gordon asserts. “Summer Fresh has 25 flavors of hummus and even more dips. When the consumer is confronted by a counter with 50-plus choices, it makes their shopping experience easier when this simple separation is made.”

What are the next trends to watch for in refrigerated dips?

Gordon says “innovative flavors like avocado hummus, sweet potato hummus and spicy tzatzki are starting to steal the spotlight. Consumers want their favorite flavors from other food categories incorporated into dips.”

Frocione says Cedar's is"always working on a few concepts that we think will be the next big thing.” Right now, those concepts include some new hummus flavors designed to appeal to different ethnic flavor profiles. Later this year, Cedar's will begin importing a line of dips from Australia that combines cashews and parmesan cheese; these Simply Delish Chunky Dips won a SOFI Award at the recent Fancy Food Show, Frocione notes.

“Consumers are looking for more variety, and we see a tremendous opportunity with innovative new offerings” such as Greek yogurt-based dips, Cowardin says. “Additionally, delivering well-balanced options that consumers can snack on daily will help increase consumption and enable us to grow the category. The combination of these opportunities allows the category and Marzetti produce section dips to appeal to a younger and broader audience.”

Strategic partnerships with makers of refrigerated dips should help aggressive grocers maintain the category's upward trend and stimulate sales of complementary products through savvy crossmerchandising.