Health-high with Spreads
Despite relatively stable retail volume sales, the Canadian retail value for spreads grew three per cent in 2014 to reach $589 million. The Euromonitor International Country Report goes on to describe the category as “very mature” and “saturated with limited growth opportunities.”
That being said, the three leading players in the Canadian market — which collectively accounted for about 43 per cent of the total value sales in 2014 — were identified as Kraft Canada Inc., Smucker Foods of Canada Corp. and Ferrero Canada Ltd.
“The latest trends are shifting to healthier options,” says Amy Rawlinson, brand director, Kraft Peanut Butter, who adds that the company has seen this reflected in sales in its own All Natural Peanut Butter. “The natural peanut butter segment is the driving force of the overall category growth.”
Ted Turner, advertising manager and buyer, Fairway Markets, Victoria, B.C., concurs.
“The category has evolved greatly over the past several years,” he says. “Healthconscious consumers are quick to read labels to ensure that product ingredients fit their family’s demands. Sugar and sodium are always top of mind. Peanut butter continues to be the spread of choice. It’s nutritional, natural, easy-touse and versatile.”
New this year is the launch of the Planters peanut butter brand in Canada. “We feel the timing was absolutely right to launch the Planters Peanut Butter brand in Canada. Our research shows Canadians are buying spreads more than ever before — 79 per cent of Canadian households report heavy peanut butter consumption (at least once per week), and 83 per cent of Canadian households report having peanut butter on hand,” said Don Lock, vice-president sales and marketing for Johnvince foods/Planters Canada. “Consumers are responding very positively to the value proposition and superior quality of Planters — and they recognize the Mr. Peanut brand.”
“In the past few years, there have been small increases in honey consumption that is likely been driven by consumers seeking healthier sweetener alternatives.”
Another health trend in the peanut butter segment is “peanut” products that don’t actually contain peanuts.
NoNuts Golden Peabutter from Mountain Meadows Food Processing (2004) Ltd. is an example of this trend. The product is completely gluten, soy, dairy, egg, nut and peanut free — and is high in protein. The company’s four peabutter flavours contain none of the top 11 allergens.
“Because spreads are popular with children, health and allergens are a huge factor,” says Caryll Carruthers, president. “Our products are also nutritious and ideal for school lunches.”
Honey is another healthy choice in the spreads category.
“In the past few years, there have been small increases in honey consumption that is likely been driven by consumers seeking healthier sweetener alternatives,” says Shannon Bowden, brand manager, Bee Maid Honey. “Health has definitely come into play with this category with consumers eager to find alternatives to refined sugar. 100 per cent pure Canadian honey has an excellent reputation for being of extremely high quality, with a delicate and mild flavour. Many consumers are reporting that they are us ing honey in their cooking or baking instead of sugar.”
Points to ponder
There are many factors to be taken into consideration by retailers looking to build or add to their spread category.
“We believe retailers should consider offering brands that are Canadian,” states Bowden. “Consumers are looking for products that are made in Canada, and it’s important that retailers offer them that choice.”
Consumer appeal is another consideration.
“There are three major factors for retailers to consider when choosing products for their category,” explains Rawlinson. “How quickly the product turns on the shelf. How the product looks on the shelf and how it will look beside the products that the retailer already carries. And if there is consumer demand for the product.”
Of course, the right merchandising can go a long way to help turn product. “In the past few years, there have been small increases in honey consumption that is likely been driven by consumers seeking healthier sweetener alternatives.”
“The right merchandising can have a huge effect on sales,” continues Rawlinson. “Displaying the product in a way that is more interesting and engaging for the consumer is a great way to increase interaction, in-store experience and customer satisfaction.”
There are also interesting merchandising options for other products like honey.
“Honey is a great alternative to anywhere you’d use sugar,” says Bowden. “If retailers are putting together a display with healthier options for families, placing honey with that category is a great idea.”
Bowden also suggests including individual-sized portions of honey in a display featuring items for lunch boxes.
“Displaying the product in a way that is more interesting and engaging for the consumer is a great way to increase interaction, in-store experience and customer saftisfation.”
Carruthers also sees value in creating targeted displays. “Merchandising is important because it calls attention to the product,” she says. “Creating a local section for local manufacturers works well. Displaying with foods you can use with spreads — like crackers, cookies, fruit, bread sticks and bread — is also a good idea.”
Cross-merchandising products in innovative ways have been shown to increase sales. In the case of honey, for example, Bowden suggests placing it in the tea/coffee section.
“Use in tea is one of the highest reported uses of honey,” she says.
Rawlinson suggests that retailers make use of displays outside of the traditional spreads aisles as well.
“A great way to cross-merchandise would be to put peanut butter in places within the store outside the spreads aisle,” she says. “For example, putting peanut butter and jam together beside bread in the store would be a convenient way to pick up everything the consumer would need for a tasty sandwich. Another great way to cross-merchandise would be to put peanut butter floor displays beside bananas and apples – another way that peanut butter is consumed — or with oats and honey.”
Catch their attention
Whichever way retailers choose to grab their customers’ attention, the point is to highlight innovative products and innovative product combinations to encourage trial.
“The right product and right merchandising,” says Turner. “I believe that consumers enjoy seeing innovation, bright décor and nutritional information available from reading the label.” Put it all together and you’ve got a winning combination sure to increase sales.