Images provided by Scott Schuette
I visit grocery stores every week – I call it a habit, my wife calls it an addiction! My visits usually involve a little bit of shopping and a whole lot of observing. I am always looking for new trends, strong operational practices and areas of opportunity.
This week, I took note of a small area of the produce department with big growth potential: the refrigerated salad dressing category.
The days of merchandising a two-foot section of refrigerated display case with ranch, blue cheese and Caesar dressings are long gone. So are the days of having only two manufacturers represented on the shelf. Retailers must realize that the refrigerated salad dressing category, if done right, has one of the highest sales dollar averages and the lowest shrink loss in the entire department.
It is also one of the top incremental basket builders within the department and pairs perfectly with surrounding packaged salads, croutons and all other fresh vegetable ingredients. Partnerships with multiple refrigerated salad dressing manufacturers are needed to capture maximum sales and meet shopper demand.
This category has lots of untapped potential – low-hanging fruit, if you will. Opportunities include new brands and better-for-you options. Some of the trends that are rapidly growing in the segment include organic, gluten-free, local and plant-based.
Do you have the right mix of refrigerated salad dressings available for the changing consumer palates and lifestyles? Here's some food for thought.
Organic opportunity
U.S. organic sales soared to new heights in 2020, jumping by a record 12.4% to $61.9 billion. This reflected a growth rate more than twice the 2019 pace.
Organic dressings also followed that trend. According to SPINS, which gathers retail data about natural and better-for-you products, salad dressings containing organic ingredients jumped nearly 18% last year, an increase of more than half a billion dollars in sales.
Sufficiently on trend?
You might be wondering whether your refrigerated dressing assortment is sufficiently on trend, with the right mix of mainstays and new options. You might also be wondering who could help you and your team answer that question. Help is available. Dressing manufacturers and data companies are great resources.
Since we know that organic salad dressings are on trend and setting new sales records, I asked SPINS for some perspective on which trendy West Coast salad dressing flavors might catch on in other parts of the U.S..
Scott Dicker with SPINS said strong growth of Green Goddess and Asian dressing flavors shows increasing consumer interest in tangy choices. Dressings positioned as paleo have seen sales more than double, he said.
Also jockeying for shelf space are dressings positioned as keto, Whole 30, gluten-free and non-GMO. And don't forget about yogurt-based dressings! They still hold a strong spot in weekly sales and unit movement.
“Better for you” brands
Let's consider a few examples of manufacturers delivering options that dovetail with some of these trends. From my own experience, there are many brands worth looking into, but logistics will play a role in whether they are a great fit for your organization. Here are several options to get your wheels turning.
Organic Girl has been producing high-quality packaged salads for many years, so I'm not surprised they developed a high-quality organic salad dressing as an accompaniment. You can tell by the names below that they did their homework to select some trendy flavor profiles. “Herb Goddess” and “Pomegranate Balsamic” are great examples of recipes that will wake up the taste buds.
One of my favorite “better for you” salad dressings is made by Tessemae's, a manufacturer that specializes in producing refrigerated dressing, pantry dressing, condiments and marinades. They produce conventional, organic, Whole 30 and keto products. Organic Creamy Green Goddess is one of my favorites; the Tessemae's website describes this dressing as “packed with flavorful herbs like tarragon and parsley, plus a deep umami flavor from coconut aminos.”
What about some of the familiar refrigerated salad dressing brands and manufacturers? What have they done to keep up with the “better for you” trend? Many have launched new lines that are growing the category substantially without cannibalizing existing flavors.
Bolthouse Farms launched a new plant-based line of dressings with some very unique recipes and flavor profiles. Habanero Blue, Carrot Miso, Green Goddess and Garden Ranch all pack a punch of flavor. They also have an impressive list of “better for you” attributes, including no artificial sweeteners, preservatives, flavors or colors.
Litehouse has a line of ten organic salad dressings, with flavors ranging from core offerings like Organic Ranch and Organic Caesar to tangier options like Organic Lemon Herb and Organic Raspberry Vinaigrette.
SPINS noted some other refrigerated salad dressing brands heating up sales across the country. Mother Raw, Toby's and Salad Girl are a few examples. Mother Raw's dressings are plant-based and free from preservatives and artificial ingredients.
Toby's dressings use local ingredients, and the company's lineup includes probiotic dressings with additional health benefits. Salad Girl's gluten-free dressings use organic ingredients. There are many choices out there for optimizing your refrigerated salad dressing category.
Category outlook
The days of only having traditional recipe ranch and blue cheese salad dressings in the produce department are not gone, but they appear to be waning. Check out these observations from Scott with SPINS.
- Over the past 52 weeks, the highest overall growth for dressing flavors can be seen with Asian leading, up 21%, followed by ranch and Caesar, up 12%, and Thousand Island up 11.6%.
- Caesar dressings positioned as both “vital clean” and “major 8 allergen-free” have soared in growth, up 193%.
- Greek (up 39%) and Asian (up 37%) are strong flavors for dressings with organic ingredients.
- Onion dressings are up 424%, fruit dressings are up 327%, and garlic dressings are up 282%.
- As for keto products in the category, Asian is up 23% and Thousand Island is up 16%.
Traditional salad dressing assortments in produce are still prevalent, but new and trendy salad sets are beginning to bolster the category, creating substantial sales dollar growth. Are you okay with the same old assortment, or are you pursuing new opportunities? Now is the time!
Scott Schuette is a produce retail veteran of more than 35 years and was most recently the vice president of produce and floral for Fresh Thyme Market. He has been named Produce Retailer of the Year and Specialty Food Retailer of the Year over the course of his decades of service to the fresh produce industry.