But the premium segment continues to gain momentum as manufacturers roll out trendy new offerings.
Although refrigerated dips (+8.6%), flavored spreads/hummus (+0.5%) and sauce/gravy/marinade mixes, including fresh salsa (+4.6%) all registered dollar sales gains, they underperformed relative to the refrigerated department as a whole (+14.3%) during the 12 weeks ended Jan. 29, according to Chicago-based market research firm Circana (circana.com), formerly IRI and The NPD Group. The news was much the same on the unit side where the three subcategories saw sales tumble 3.8%, 6.7% and 3.3%, respectively, while unit sales for the department fell only 2.7%.
“Demand has slowed down due to pricing elasticities, and guacamole is seeing dollar growth due to recent price increases,” explains Chris Monahan, brand manager of WHOLLY products for Saginaw, Texas-based Wholly Guacamole, the No. 2 refrigerated dip brand. However, he adds, there are still pockets of unit sales growth, and manufacturers continue to roll out new products.
“Consumers are becoming more acculturated [and are] exploring new flavor profiles, which is translating into new items on grocery store shelves,” he says. For example, “We are seeing more plant- and nut-based dips for the vegan and alternative ingredient-focused shopper. And to no one’s surprise, avocado continues to evolve in usage occasions as we are even seeing new avocado-based hummus products on shelves.”
‘Millennials continually indicate that they are looking for new and innovative flavors to spice up their lives.’
DEMAND RISES FOR PREMIUM DELI DIPS
Although it may seem counter-intuitive given the recessionary macro-environment, Greg Klein, CMO at Delphos, Ohio-based Lakeview Farms, says he’s also seeing increased demand for premium deli dips. “This is being driven by flavor innovation, the return to entertaining after the pandemic shut down, and increased product assortments in deli sets.”
Aimee Tsakirellis, executive vp of marketing at Ward Hill, Mass.-based Cedar’s Mediterranean Foods, agrees that post-pandemic, unique and on-trend flavor profiles are hot once again. In fact, Cedar’s will tap into the hot honey craze with its new Topped Organic Hot Honey Hommus (topped with honey and crushed chili peppers) later this spring.
“Also trending is naming flavors after vibes or moments to encourage consumers to purchase the products for a specific time of day,” reports Tsakirellis. To that end, Cedar’s just launched Organic Grecian Golden Hour Hommus at select Whole Foods stores nationwide. “While we currently offer a Zesty Lemon Hommus, the hints of oregano…in this new variety are really flavorful and add an extra Mediterranean kick that we think our customers will really crave,” she says. “Plus, the [chickpea, herb and red pepper] topping helps create an entirely new flavor experience reminiscent of dipping into hummus on the shores of Greece right when the sun is about to set.”
Another company looking to deliver that feeling is Monroe, Wis.-based Klondike Cheese Co., which will add a Mediterranean Style dip to its Odyssey line of Greek yogurt-based dips in Q4.
Phoenix-based FoodStory Brands is also expanding its lineup, recently adding Jalapeño Cilantro, Lemon Garlic and Mediterranean varieties to its hummus collection. “Although the top hummus flavors — Classic, Roasted Red Pepper and Roasted Garlic — continue to make up a majority of sales, we are always looking for ways to draw in new customers…with the goal of helping the category to grow incrementally,” says chief operating officer Nicole Parker. She adds that she’s seeing chefs and consumers using hummus in new ways: to create hummus toast, in grain bowls and as the centerpiece of mezze and charcuterie platters. “Hummus pairs incredibly well with vegetables [and lends] itself to other low-carb and nutritious carriers,” she says.
Another key category player, Louisville, Colo.-based Hope Foods, is offering hummus lovers a way to feel good while doing good. Its organic, non-GMO, gluten- and preservative-free hummus is being reformulated to also include plant-based Omega-3s, which promote digestive and mental health.
“Research indicates that over 70% to 80% of the body’s serotonin is regulated by the digestive system,” says Nicole Pavlica, vp of marketing. “With this addition, Hope Foods is furthering its mission to foster emotional well-being. Plus, each purchase helps Hope fund free mental health and self-care activities.” In addition, says Pavlica, the Plastic Neutral Certified company is partnering with rePurpose, which helps properly process ocean-bound plastics and create sustainable living opportunities for communities. Pavlica adds that while hummus accounts for a significant chunk of dip sales, most consumers have only experienced hot-processed hummus made with low quality oils and artificial preservatives. “But more and more consumers are starting to gravitate toward premium, cold-processed hummus, and this small segment is driving category growth.
“Premium hummus is cold-processed using high-pressure processing (HPP), which locks in the flavor, texture and nutrients and yields a fresher-tasting product,” she explains. “For consumers who include hummus in their daily wholesome snacking routine, it’s even more important that the product include premium ingredients, that it’s free from preservatives and glyphosate (the toxic herbicide used on garbanzo bean plants), and that it’s offered in unique flavors.”
RE-IMAGINING RESTAURANT FLAVORS
As much as consumers are celebrating the return to normal and eating out, they’ve also developed a craving for traditional restaurant favorites they can enjoy at home — especially now that inflation is making dining out cost-prohibitive for some.
“Products like carnitas street tacos and beef brisket-forward items have seen increased interest alongside restaurant-style ingredients like caramelized onions and truffles,” says Matt Haskell, vp of brand innovation at Greenville, S.C.-based DiscoverFresh Foods. “We keep seeing trends articles and pundits lean into the better-for-you and vegan lanes, but the sales have not followed…. People still want to indulge.” He adds, “Although [better-for-you items] have not sold as well as their more indulgent counterparts, it seems clear there is a place for both in the market.
“Customers are looking for bolder flavors that explore their comfort-food favorites, or trendy takes on international cuisine,” continues Haskell, citing the two newest additions to DiscoverFresh’s hearty Taste of the South collection: ‘Southern Fried’ Chicken Dip and Smoked Carnitas Street Taco Dip. “There is nothing more southern than fried chicken, so this new item was a natural extension to the lineup.” He adds, “We haven’t seen anyone attempt to take on the fried chicken profile before in a dip, although it remains one of the most popular flavor profiles across all restaurants nationwide.”
Meanwhile, “The carnitas item uses real slow-smoked pork in a blend of nacho flavorings, and works great with chips, on a bed of nachos or over a salad. Flexibility in usage is one of the key areas we’ve focused our product development around,” says Haskell.
The Southern Fried Chicken Dip hits Kroger shelves in May, with additional retailers to follow; the Smoked Carnitas Dip will launch in July at Sam’s Clubs nationwide.
On the frozen side of the meat-based dips segment, Baltimore-based Phillips Foods also drew inspiration from its restaurant menu items, adding Cajun Seafood Dip and Chesapeake Crab Dip to its product line. Next up: a shrimp-based dip.
“I haven’t seen or tasted a quality shrimp dip on the market, so with shrimp the No. 1 seafood protein, it just made sense as a line extension,” says vp of retail sales and marketing John Baxter. “We are always looking for new ingredients and flavors,” he adds. “And the shrimp dip features a sriracha flavor profile,” highlighting growing demand for products that bring some heat.
SUPPLIERS SPICING IT UP
Of course, few dips deliver bold flavor like salsa. But in a category dominated by heavily preserved products made with artificial flavors, consumers are hungry for an innovative salsa recipe that offers fresh ingredient flavor, says Chris Kirby, founder and CEO of Rochester, N.Y.-based Ithaca Hummus.
“This year we are venturing into the fresh salsa category to bring made-to-order fresh salsa to consumers everywhere,” he says, noting that Mild and Medium were introduced in January as a Whole Foods Market exclusive. “Filling the void for fresh salsa with a homemade taste, Ithaca Hummus’ new Fire Roasted Salsa offers a unique flavor profile comparable to a tableside, made-to-order salsa.”
The product is made with real, recognizable ingredients, including fire-roasted tomatoes, onions, jalapeno peppers, lime juice, cilantro, garlic, salt and vinegar — and without the preservatives and additives typically found in store-bought fresh salsa.
Orange, Calif.-based MegaMex Foods, owned by Hormel, recently added a refrigerated salsa line that consists of Mild, Medium and Chipotle flavors to its Herdez lineup. (The company’s portfolio also includes the Wholly brand.)
“We realized that consumers search for salsa in several aisles of the grocery store, but particularly the deli area, which has high foot traffic,” says Monahan. “Our presence in this area expands our ability to connect with consumers looking for an authentic salsa brand to add to their entertainment meal solutions or at-home eating occasions.”
In addition to bold flavors, consumer demand for cheese-based dips is also growing, says Lakeview’s Klein, citing the company’s recent introduction of Rojo’s queso dips and Tribe Mezze feta dips. “Real cheese, cheese as first ingredient, and unique flavor combinations that include cheese differentiate these products from other competitors,” he says.
In the plant-based cheese segment, meanwhile, Brooklyn, N.Y.-based CHKP Foods, just debuted dairy-free cream cheese made with chickpeas “so it brings nutritional content other plant-based cream cheeses don’t,” according to the company. Another player in the dairy-free space, Spread’Em Kitchen, Richmond, British Columbia, recently took home a NEXTY Award for its probiotic-rich, cashew-based Meadow Herb & Garlic Cheese Alternative, which was named best new dairy alternative at Natural Products Expo West last month.
LIMITED EDITIONS CREATE EXCITEMENT
Although consumers often reach for old favorites like French Onion dip and Roasted Red Pepper hummus, “Millennials continually indicate that they are looking for new and innovative flavors to spice up their lives,” says Chris Ross, senior vp of marketing and R&D at Lynnfield, Mass.-based HP Hood. To create some excitement and drive incremental sales, the company recently added a limited-edition Buffalo Wing flavor to its Heluva Good! dip collection.
“This new dip features Buffalo wing sauce blended with real milk and cream to create the perfect pairing of a cool, creamy dip with the popular medium spice level,” he says.
In the hummus category, FoodStory Brands is also rolling out limited editions that represent a “one-step change” from more traditional or mainstream offerings (think Dill Pickle, Pizza and Lemon Dill), reports Parker. “These flavors make a great addition to our family of products, despite only being available for a short time, and allow us to deliver on current consumer preferences.” She adds, “We have new innovations in salsa coming out this year, so keep an eye out for those as well.”