Merchandising is key for increasing sales of dips and salad dressings.
As more and more consumers opt for the convenience of ready-made offerings, packaged salads are at the top of shopping lists. Since dressings will ultimately end up on salads, it makes sense to place them near packaged salads, cross merchandised with salad ingredients. By paying attention to this and other merchandising tools and trends, retailers can keep category sales strong.
Merchandising Matters
“Merchandising with complementary items always makes it easier for the consumers to grab what they need for their party or meal,” says Stacey Miller, director, trade marketing and business manager, Litehouse Foods, Lowell, MI. According to Miller, secondary displays show up to a 200 percent lift when cross merchandised properly. “For example,” says Miller, “July is a peak time for coleslaw. When we merchandise our coleslaw dressing with bags of slaw, this is the time we see the biggest lifts.”
Charles “Buzzy” Blyer, sales manager for Makoto Dressing in Melbourne, FL, also stresses the importance of product placement for increased sales. “Dressings usually work best when cross merchandised with a bag lettuce program or fresh vegetables to be used as a dip. There is a refrigerated section usually next to or around the bag salad section,” says Blyer. “That reminds a consumer to purchase a dressing as well.” Out of sight is out of mind for many harried shoppers, so proximity is key.
Retailers knows this, as Marc Goldman, produce director, Morton Williams Supermarket, in the Bronx, NY, says, “We have a shelf in the bagged salad section, so we merchandise it with the bagged salads wherever there’s space for it.”
Keith Cox, former produce category manager for Food City, headquartered in Abingdon, VA, likewise stresses placement. “Displaying the dressing section next to packaged salad is a must and also three to four facings in the middle of packaged salad works well, especially when the dressing is at a reduced retail.” Cox also notes vegetable dips sell well when displayed with cut vegetable items and fruit dips sell well with fruit cups and party trays.
Dressings aren’t just for leafy greens, of course. The variety of flavors in the category, as well as the availability of offerings like cooking sauces, provides retailers with opportunities to cross merchandise with other items in produce. Many brands now boast a variety of bold flavors that appeal to consumers with more adventurous palates, and Millennials have also shown a desire to explore new flavor profiles. “We offer a line of 8-ounce cooking sauces that are intensely flavored and inspired by global and ethnic cuisines,” says Ed Byers, chief executive and founder of Cindy’s Kitchen, Brockton, MA. Merchandising opportunities exist with these types of sauces with pre-cut veggies as well as stir-fry kits. According to Byers, pairing them with items like this opens the door to a number of different recipe ideas and serves as inspiration for the retail customer for quick, healthy dinner options.
For Samantha McCaul, marketing manager for Concord Foods based in Brockton, MA, success has come through a range of shelf stable guacamole and salsa seasoning mixes. “Retailers that display our mixes adjacent to the fresh companion items, such as tomatoes or avocados, will see great sales,” she says, adding, “There are other great benefits to cross merchandising such as: it adds great interest and variety to the produce department, convenience to customers and great margins.”
McCaul recommends focusing on seasonal items and items with high sales volume and velocity. “Examples of seasonal items include apples and caramel dip. Avocados and bananas are high volume items. Cross-merchandising displays do very well with these items.”
Follow Clean Label Trends
With consumers looking for healthier options with cleaner labels, shopping in the perimeter continues to expand, says Litehouse’s Miller, who acknowledges the refrigerated dressing and dip category is challenged with refrigerated space. “Making sure you have the right items and flavors by region is key to maximizing space and sales. Secondary displays would contribute more/new sales in the produce department as well,” says Miller.
Competition is strong in the dry aisle and sales have suffered in recent years. “The dry aisle is oversaturated and sales are down by some estimates nearly $20 million in the category year over year. Going into the refrigerated aisle, we are able to use a larger variety of ingredients like fresh basil and fresh lemon zest, as an example, that can not be utilized in the dry aisle because of the restrictions,” says Byers.
With these ingredients, Cindy’s Kitchen is able to up the game as the refrigerated aisle continues to grow by nearly $20 million per year, according to Byers. “Because of our experience and our depth of range, our partner retailers lean on us to deliver the same tried-and-tested category killers we have always delivered, as well as innovative and seasonal items that keep their customer dazzled and excited.”
One of the biggest trends in packaging continues to be clean labels. Products that call out their natural or healthy ingredients appeal to health-conscious consumers, as well as those concerned about the environment. “It’s all about clean label,” says Brian Vetter, chief growth officer and co-founder of Tessemae’s, Essex, MD. Vetter sees clean label, as well as organic, as “the biggest trend, driving 60 percent of the category’s growth.”
McCaul has seen this as well. “We’ve seen growth in clean label products. Today’s consumers read labels, and they want to feed the best products to their families. Because of this, we’ve updated our seasoning and smoothie mix products to contain no artificial ingredients.” Concord Foods has also introduced a clean-label caramel dip, which has sold well.
According to Byers, Cindy’s Kitchen has been successful from a merchandising standpoint by offering a wide range of flavor profiles including premium, non-GMO and clean ingredients. Byers points out that since the company is family-owned, it is able to remain nimble and innovative in a category where competition is tight. Manufacturers need to continually develop new products to capitalize on emerging trends that, according to Byers, help retailers “constantly refresh their sets while still offering our category killers, which have dominated the industry for more than two decades.”
Clean label packaging may appeal to shoppers who put a lot of thought into the buying choices, but sometimes packaging that “pops” is what grabs the attention of busy shoppers. “I am seeing brighter colors as new packaging appears on the shelf,” says Blyer adding, “However, consumers know what items they are shopping for.”
Cox at Food City advises, “Always follow the new trend, pull history on movement and decide what items are declining, and delete to make room for the new trend.”
“Consumers are looking for convenience,” says Miller at Litehouse. “We are constantly keeping an eye on what consumers are looking for, best sustainability practices, and of course, tying in with convenience and ease of use.”
Retail Considerations
There’s a ton of dressings around; it’s almost endless,” says Goldman at Morton Williams. With so much competition, what should retailers consider when making decisions on what new refrigerated dressings and dips to add to their produce departments? According to McCaul, “They should look at several factors including: Will consumers want these products? Are the product’s new and interesting or a classic which is always in demand? Does the product add interest and variety to the department? What is the sales potential for the product and complementary items? Does the item offer great convenience to customers?” Answering these key questions will help produce managers with their buying decisions.
According to Byers, “National brands are very recognizable and pretty much found in all leading retailers and independents across the country.” Name recognition alone may not be enough, however, and Byers recommends promotions as an effective way to raise consumer awareness. “I would say sales numbers from IRI or Nielsen are tools to reveal the top selling items in the category. Also, include an annual promotional plan to ensure the sell-through of newly placed items.”
For Goldman at Morton Williams, “Certain dressings sell better in certain stores, so I let the managers decide. If they tell me the Panera Bread dressings aren’t selling, I don’t make them sell it. If the Marzetti is selling better, then sell the Marzetti.” Space is limited, according to Goldman, so store managers have discretion to stock what they know their customers will buy, which can leave little wiggle room to experiment with new products.
Goldman also notes there is some room for improvement in support from manufacturers after getting a new product added to a store, saying, “A lot of companies in the beginning are very proactive and do demos and everything else, but once they get into the stores, it’s over.”
“Overall sales and sales-by-item definitely vary between chains, regions and demographics,” says Miller of Litehouse. “We are constantly looking for ways to reach multiple types of consumers with our products and flavor offerings.” Miller recognizes some regions have more ethnic profiles, while others may be looking for different packaging options.
“Also, an organic consumer may be shopping in different stores, so we need to make sure we have offerings for those consumers as well.” Which doesn’t mean the classic flavors of dressings can be neglected. “Every retailer needs the classic flavors and what appeals to the masses,” says Miller, “however, they also need to keep up with the trends and have a smaller section dedicated to new up-and-coming flavors/products.”
