Originally printed in the May 2018 issue of Produce Business.

Grocery aisle varieties still way ahead but produce shoppers can find more unique, healthful offerings.

Salad dressings and salads are one of those quintessential hand-and-glove culinary combinations. If one of these items is in a shopper’s cart, the other is likely there too. This duo is also hugely popular.

Consider that packaged salads were the top commodity dollar-wise in the vegetable category in 2017, according to the Washington, DC-based United Fresh Produce Association’s FreshFacts on Retail Year in Review 2017, and it’s easy to see why a whopping 81.3 percent of Americans said they used prepared salad dressings last year, based on U.S. Census data and the 2017 National Consumer Survey, by New York-based Simmons Research.

Although packaged salads and salad fixings are sold in the produce section, less than 8 percent of shoppers said they found dressing in this department, according to the same research. This is because the produce shopper for salad dressings is looking for something different than those who buy from the grocery aisle. Retailers who recognize this can capitalize on today’s health, wellness and culinary trends to stock what shoppers want and gain this incremental ring.

“There are four points I look for in salad dressings to sell in produce,” says Randy Bohaty, produce director at B&R Stores, an 18-store chain based in Lincoln, NE, that operates under the Russ’s Markets, Super Saver, Apple Market and Save Best Foods banners. “First, fresh ingredients. Second, refrigerated products only. Third, ingredients that are trendy and healthier like those with Greek yogurt, for example. Fourth, brand recognition. This last could be a national brand, or the brand of a local restaurant in the area that is well known by our customers. Salad dressings sold in produce are typically priced higher than in the grocery aisle. However, they provide value by giving customers what they want: freshness, quality, healthfulness and familiarity.”

STOCK WHAT CONSUMERS WANT.

Sales of salad dressings, shelf stable and refrigerated combined, are flat. However, over the past year, sales of refrigerated salad dressings at retail have increased 2.2 percent while shelf stable salad dressing dollars have decreased 2.2 percent, according to IRI data as shared by Litehouse Inc., in Sandpoint, ID.

“There has been a fair amount of publicity about how some salad dressings are not as healthy as we think,” explains Shawn McLaughlin, chief growth officer at Tessemae’s All Natural, in Annapolis, MD. “In many cases, consumers feel like they have been duped and as a result, are really starting to read labels. They don’t want to feel like they are putting a science experiment on their salad. We have benefited from this over the past few years as our dressings are 100 percent clean label. We don’t use gums (xanthan), fillers or any type of preservatives.”

Companies such as the Good Foods Group, LLC, in Pleasant Prairie, WI, are following this trend by using processes such as High-Pressure Processing to produce refrigerated salad dressings without preservatives, additives and artificial ingredients or the need for heat treatment, according to Kristyn Lawson, vice president of retail sales.

“Our newest salad dressings are unique to the category by featuring added wellness benefits such as cold-pressed produce and fresh herbs. For example, one favorite is our Apple Thyme Salad Dressing, made with five varieties of cold-pressed apples from Washington State,” says Lawson.

The desire for more healthful dressings holds true across age demographics.

“Boomers are consuming greens as a reactive measure to health management, and refrigerated salad dressing allows them to add rich flavor to their salads,” says Marci Needham, vice president, strategic insights and category management for Ventura Foods, the Brea, CA-based manufacturer of Marie’s brand salad dressings.

“Salad dressings sold in produce are typically priced higher than in the grocery aisle. However, they provide value by giving customers what they want: freshness, quality, healthfulness and familiarity.”

— Randy Bohaty, B&R Stores

“Millennials are consuming greens to bring balance into their lives: balanced approach to weight management, balanced approach to nutritional intake, and refrigerated salad dressing allows them to add flavor, fun and variety,” says Needham.

As for desired flavors, classic dressings with a twist are growing in popularity as consumers look to add to their rotation.

On the traditional front, “Blue Cheese, Ranch, Caesar, Balsamic and Coleslaw represent 70 percent of sales for the Litehouse brand,” says Ben Woodbridge, director of market research.

Vinaigrettes are growing at a rapid pace, especially those differentiated with oils such as olive and avocado, says Ventura’s Needham. “Flavors that are performing extremely well in these segments tend to focus on signature ingredients that highlight a quality differentiation to consumers. Some of the most popular flavors to emerge include Avocado Poblano, Avocado Cilantro, Avocado Ranch, Balsamic Vinaigrette, Lemon Vinaigrette and Champagne Vinaigrette. We also see shifts as Millennials move into their full purchasing power and Generation Z approaches this phase. Given the diversity of these populations, flavors that stem from Hispanic or Asian cuisine likely will continue to grow.”

Good examples of new products on the Latin flavor front are the recently launched Sriracha Lime and Mango Habanero dressings from Litehouse and Bolthouse Farms’ brand Avocado Green Goddess and Sweet Heat Sriracha, owned by the Campbell Soup Company, headquartered in Camden, NJ. Similarly, on the Asian side, Wasabi Ginger is one of the newest flavors from Makoto Dressing, Inc., in Melbourne, FL.

The Mediterranean-style of eating continues on-trend. In fact, U.S. News & World Report ranked the Mediterranean Diet as the Best Diet Overall, according to a January 3, 2018 release. This means ingredients such as Greek yogurt continue to be fashionable.

“Our OPA by Litehouse brand, a line of Greek yogurt-based salad dressings, includes favorites like Tzatziki Ranch, Avocado Cilantro, and Strawberry Poppy seed,” says Stacey Miller, director of trade marketing and business development. “Pairing unique flavors with a lower calorie/higher protein Greek Yogurt base delivers on innovation both regarding what consumers want on a nutritional basis and in flavor options.”

Beyond health and flavor, convenience continues to rule.

“To appeal to those looking for convenience, our newest dressing and dip packaging innovation includes a six-pack of 2-ounce cups that are perfect to take for lunches or to have with a portion-controlled snack,” says Miller.

MERCHANDISING: SALADS & BEYOND

Salad dressings are merchandised next to packaged salads at Tops Markets, a 169-store chain based in Williamsville, NY. “We have the dressings and dips in one section, each within their own category. We’ll also cross-merchandise blue cheese dressing in the meat department as a dip for chicken wings.”

A good example of cross promotion of salad dressings within the produce department is Litehouse pairing its products with Fresh Express Salads and NatureSweet tomatoes.

“The campaign leveraged integrated tactics with consumer touchpoints both in store and online to emphasize these three brands being key ingredients for a great salad. We also provided value by offering a hot price point for dressing, tomatoes and bagged salad when bought as a bundle.

“Another example is creating secondary displays during particular times of the year, one example being Coleslaw. By having the jar of Coleslaw dressing displayed with a bag of coleslaw in a bunker display or endcap, it reminds consumers of an easy side dish they want to make, especially in the summer months. Secondary displays generate increased sales and strong lifts,” says Miller.

Retailers can promote more sales by positioning salad dressings as not just for salads.

More than half of consumers use salad dressing as a dip, 40 percent use them as a spread/condiment, and a third of consumers use them as a marinade, according to Litehouse’s Woodbridge. “Opportunities for cross promotion and marketing offers exist to tie refrigerated salad dressing products into other high-volume/high-velocity categories and should be maximized.”

The possibilities are endless.

“Our dressings can be used as dips or a flavorful marinade for meats, or as a healthier topping on flatbreads and grain bowls,” suggests Bill Lange, vice president of marketing at Bolthouse Farms, headquartered in Bakersfield, CA.

“Our creamy dressings can also be used as a better-for-you, creamy substitute in a macaroni and cheese recipe. Retailers can highlight recipe ideas and leverage cross promotion during key moments in time such as creating a refrigerated display with dressings, carrots and other dippable veggies that position them as an easy appetizer.”

CATEGORY CONSIDERATIONS

What and how many refrigerated dressings to carry in the produce department often depend on the space constraints imposed by the size of the set. However, says Shawn McLaughlin, chief growth officer at Tessemae’s All Natural, in Annapolis, MD, “all SKUs should also be evaluated on velocity, sales, profit and uniqueness in flavor profile. The review process should also include an in-depth review of everyday and promotional pricing.”

Salad dressing manufacturer Litehouse Inc., headquartered in Sandpoint, ID, worked with Chicago-based market research company, IRI, to develop a Consumer Decision Tree for the refrigerated salad dressing category. This study detailed not just what consumers buy, but also analyzed transaction level data to determine the attributes of products that are most important to consumer when shopping this category. Results revealed having a mix of brands is important, and having brands that can offer a variety of flavor and product type is equally important.

“We carry two key brands of salad dressings in the produce department,” says Jeff Cady, director of produce and floral at Tops Markets, a 169-store chain based in Williamsville, NY. “As for flavors, it’s anything that is healthy, or has key words like yogurt or avocado. Lighter vinaigrettes are popular due to the trend toward more tender leaf lettuces that will sink under the weight of heavier dressings.”

In terms of buyers creating the optimal set, Marci Needham, vice president, strategic insights and category management for Ventura Foods, in Brea, CA, see this as somewhat regional. “The buyer should have a core set that all divisions take on and then understand the specific banners or regions to identify needs of those consumers. An example might be to have more Avocado/Poblano or Avocado/Cilantro in the West but focus on fruity vinaigrettes in the East, based on the data that we look at.”

Slotting fees, which can sometimes affect exposure at store level, can be challenging especially for smaller companies.

“We just don’t do it (slotting fees). We believe it’s an old-school way of managing the category and ultimately, it just restricts consumer access to some great brands that can’t afford to pay those fees. It is changing. The evolving e-commerce dynamic is forcing many retailers to really think about putting all of the promotional funding into attracting new consumers,” says Tessemae’s McLaughlin.