DRESSING UP 1995

MIKE STERNMAN

There's gold in the condiments aisle. Bottled salad dressing has become one of the section's most precious liquids, pouring $1.1 billion in annual sales into the aisle.

Trends toward healthier eating have endorsed the consumption of salads, which has had a direct impact on the dressing category. Each month, U.S. consumers eat an average of 16 salads, most of which are laden with dressing, according to one vendor study.

What's whetted consumers' appetites for salad dressing is a massive outpouring of the product, including a trend toward

bigger bottles, according to retailers contacted by SN. Indeed, the segment has become so active that it has become a prime candidate for category management, they say.

From 1990 to the first quarter of 1995, 1,000 new stockkeeping units were counted nationwide by Marketing Intelligence Service, Naples, N.Y. Items introduced since 1990 now produce nearly a third of the total dollars in the segment, according to the Association of Dressings and Sauces, an Atlanta-based trade group.

This product profusion has enticed many shoppers to buy more than they really need, picking up regular, fat-free or several flavors for different members in the household, said Mike O'Donnell, a buyer at Hughes Family Markets, Irwindale, Calif. "Most people have two or three dressings in the fridge," he said. Increased volume per consumer, coupled with increased downward pricing pressures from private labels, has fed a demand for larger bottles with easy-pour features.

"The 16-ounce size is our top mover, probably 50% to 55% of our sales," said Lee Salo, a buyer at Raley's Supermarkets, West Sacramento, Calif. "Here in California we eat a lot of salads. You take an 8-ounce bottle, two to three salads, and it's gone. Once you pour on some Hidden Valley Ranch with the wide mouth [bottle], you have used up a lot of salad dressing."

"In this market, 16 ounces is more of a promotable size than the 8 ounces, with 24 ounces slowly becoming a factor," said Pat Doherty, a category manager at Associated Wholesale Grocers, Kansas City, Kan., which services 300 independents.

"Some of the alternate formats like club stores are educating the consumer that larger is better in terms of unit cost," he said. "Our private label is a 16-ounce product because we see that as an area of opportunity for sales. But we do not have a fat-free product at this time."

Bigger containers may lead to "more uses for dressings than just putting them on salads: dips for raw vegetables, marinating, things you would use sauce for," said Sherry Free, grocery buyer at Harvest Foods, Little Rock, Ark. "The big manufacturers seem to be encouraging it by coming out with new flavors," she added.

Some leading manufacturers, such as Hidden Valley (made by Clorox Co.), now are encouraging special dressings for kids. Children's items topped the dressing association's 1994 new-flavor list, capturing a 46.5% share of new volume and temporarily bumping popular honey mustard from first place.

Light dressings have slipped in popularity, with some of their shelf space and sales being soaked up by fat-free varieties. A year ago, it seemed consumers couldn't get enough of lights. But as soon as nutrition labeling came out, they began turning to reformulated, tastier, low-fat and fat-free offerings, retailers said.

"Fat-free dressings are currently providing better than 60% of the category's sales," said Joe Brown, director of grocery merchandising at King Kullen Grocery Co., Westbury, N.Y.

Minyard Food Stores, Coppell, Texas, has seen swift movement of those dressings as well, said buyer Doug Rodden. "Fat-free ranch does 40 cases a week, the low-fat 25 to 30, and the regular is about 70-some cases."

Some buyers also have cut down on the numbers of heavy cream-based dressings -- especially Russian, French and Thousand Island -- to open up more space for fat-free, low-fat and low-calorie dressings. "You might as well take some of those regular dressings and throw them into the compactor," said Mark Polsky, senior vice president of Magruder Inc., Rockville, Md. "Fat-frees -- they've increased so much it's unbelievable."

Some retailers, however, reported a surge by conventional dressings.

"A trend toward more robust or exotic flavors in the entire category" is helping conventional dressings stage a comeback, said Joe Czerwin, a buyer and merchandiser at Heinen's Supermarkets, Warrensville Heights, Ohio. The bigger brands' venture into greater variety has "taken some of the specialty, gourmet-type business away," he noted.

Still, no flavor can match ranch for sheer variety, according to Carl Murphy, vice president of grocery at Busch's Valu Land, Ann Arbor, Mich. "For us, ranch is the Coca-Cola of salad dressings, with bacon, with poppy seed, with every combination imaginable," he said.

Raley's Salo said Italian has yielded to ranch as the most popular flavor, although it's still among the top five. "When people became more health-conscious, they started looking at ingredients," he explained. "They saw a lot of oil in there."

According to Heinen's Czerwin, Italian has been a mainstay, staying popular with the help of enhancements. "What seems relatively new is the ingredient-enhanced item with more spices, herbs, cheeses, things like that," he said.

Private-label brands, many of them upscale lines or enhanced products, are also getting a lot of attention these days. In the 52 weeks ended Jan. 29, dollar sales of private-label dressings shot up 16.6%, a rate three times better than the category itself, according to Information Resources Inc., Chicago.

The private-label bracket was the only dressing classification that had a gain in market share of unit volume last year, according to A.C. Nielsen, Schaumburg, Ill. The Association of Dressings and Sauces reported that there were twice as many new private-label items in 1994 (50) as there were in 1993 (27).

Although the private-label dressing segment is small -- between 3% and 4% in dollars and nearly 5% in units -- a number of chains told SN they are preparing to introduce or step up existing programs.

Cross-merchandising, such as placement near lettuce and croutons, also has contributed to dressing sales, as has regular advertising, retailers reported.

King Kullen has found that in-ad coupons work best. At Big Y Foods, Springfield, Mass., buy-one-get-ones "certainly escalate our sales dramatically" in tandem with end displays or in-aisle wings, said John Corcoran, category manager.

In Dallas, where salads are eaten "like we drink ice tea, year-round," Wishbone-brand buyer Chuck Moore at Minyard said he gets good results from steady price promotions. "Temporary price reductions are what really pushes that category," he said.