SAUCES OF REVENUE

RICHARD TURCSIK

Condiment sales should be cooking this summer.

In interviews with 10 retailers and several leading manufacturers across the country, SN learned that:

More new products are being introduced in the seasonal barbecue sauce category, while mustard and steak sauce sales and selection remain more constant.

Condiment sales are aided by extensive manufacturer promotions and couponing and the usual summer sales surge.

The general trend toward healthier and lighter eating should bode well for the condiment aisle.

"The barbecue sauce season slows

down during the winter months, but it is fixing to kick back in. We do real well with the condiment category and always have," said Darryl Martin, general buyer at R&M Foods, Hattiesburg, Miss.

"Our sales of mustards, steak sauce and barbecue sauce are very good. Sales definitely increase during the summer months, especially the barbecue sauce," said John Corcoran, category manager at Big Y Foods, Springfield, Mass.

"The condiments usually complement something else that is in our ad, and then there are extra displays, too," said Dick Gordon, buyer at Rogers Markets, Fort Wayne, Ind. "I think this summer will be as competitive as any other year. I already have some promotions scheduled for this summer with manufacturers, with some nice, hefty co-op funds." A lot of the growth is dependent on how the retailer merchandises it, according to Peter Jost, head grocery buyer at Harp's Food Stores, Springdale, Ark. "It is an impulse-buy item a lot of times. The customer might not be buying an A.1. steak sauce until you merchandise it with the meat market." Keith Dauterive, senior vice president and director of buying at M&E Food Market No. 2, Nederland, Texas, said, "I expect condiment sales to increase because of the seasonality, but many people are going to try the new brands and flavors, and that will bring in additional sales." Bob Rieck, buyer at Seaway Food Town, Maumee, Ohio, said promotions are the key to mustard sales. "In the summer, condiments sell well. We use all types of promotions to build sales. We do ads, in-store displays, etc. We try to get a section of them together and create a picnic section." "We have seen an increase in new flavors of condiment products from manufacturers," said Harland Polk, senior vice president, Hughes Family Markets, Irwindale, Calif. "We also find that the premium brands are gaining share on the lower-priced base brands.

"The movement of our mustards is down in cases, but up 2.7% in dollar sales. Our barbecue sauces are flat in cases, but up 3.5% in dollar sales, and our steak sauces are up 11% in cases and 12.7% in dollar sales," Polk said.

According to Information Resources Inc., Chicago, supermarket sales of barbecue sauce declined a slight 0.4% to $331.2 million for the 52 weeks ended Jan. 30, 1994. During the same period, prepared mustards racked up sales of $266.4 million, a 3.5% increase. The steak sauce category saw an increase of 2.6% during the period to $232.3 million.

Retailers said because the condiment category becomes extremely price-competitive during the summer months, they employ a variety of tactics to boost sales during that key period. Most retailers step up their advertising and promotions, while some increase their selections or cross-merchandise with other departments.

"Although barbecue sauce is extremely price-competitive, we have been able to secure some good buys recently and be price-competitive with a respectable gross profit," said Dauterive of M&E Food

Market.

"We have quite an extensive selection of barbecue sauce -- an 8-foot section from top to bottom. We don't expand it for the summer months," he added.

"Barbecue sauce sells relatively well year-round, but it is seasonal. Beginning with Easter and carrying through Labor Day is the biggest sales burst, but our climate allows barbecuing year-round so they sell well all year.

"This year we've seen a lot of new flavors. I have high expectations for them that last about one summer -- one real season for the barbecue sauce, and then I see them deteriorating quickly after that once the novelty wears off," he said.

"During the summer months we do display activities and we cross-merchandise with the meat department," said a buyer for one large West Coast chain, who did not wish to be identified.

He said the barbecue sauce category is evaluated every January or February.

"We ask that all of the vendors bring in all of their new items, and we evaluate the items based on what we have and what we need and make a decision as to how much space we are going to allocate and put a new schematic together for the season. We don't do that as much for the mustards and steak sauces," the buyer said.

"We merchandise our condiments in a vertical set and generally advertise them every two weeks or so," said Polk of Hughes.

"We carry over 200 stockkeeping units of condiments, including specialty items. While we don't increase our SKUs during the summer barbecuing and picnicking months, we use more off-shelf merchandising to boost sales," he said.

"We find the condiment category to be very much promotionally driven. Barbecue sauces sell best on 99-cent through $1.99 price points. We also find that there is a very strong competition among Clorox, Kraft and Hunt Wesson," he said, noting that Hughes' private-label condiment sales are good.

New York City's cramped one-room studio apartments don't afford too many residents the luxury of barbecuing, but barbecue sauce sales still rise somewhat during the summer months, according to Bob Costello, director of grocery operations at D'Agostino Supermarkets, Larchmont, N.Y.

"In the summertime we advertise more frequently and increase the number of barbecue SKUs. The way we get the items in the store is much like the way we handle Christmas items -- the store managers just have to find a place to put them," he said.

"During the summer we open up on the barbecue sauce category and carry twice as many barbecue sauce SKUs, while we pretty much carry the same assortment of mustards and steak sauce year-round," said Emily G. Holdstein, senior vice president at Wonder Market Cos., Worcester, Mass.

Noting that condiments are merchandised in a vertical set, she said, "We advertise condiments more heavily in the summer, and find May and June heavier in sales than July and August. Condiments are very price-sensitive and perform much better on promotion. Promotion accounts for our success with private-label mustard, because we promoted it more this year than we had in the past."

"We increase our SKUs of barbecue sauce in the summertime by about 30% to handle the increased demand," said Corcoran of Big Y. "The department ranges in our stores from between 12 and 16 feet. To fit the SKUs in, we just tweak out certain areas, but we keep it in the department, and use floor displays, etc.

"Lea & Perrins has a new upscale barbecue sauce that we will be carrying and we expect it to do very well. K.C. Masterpiece has two new items and Kraft has a few new items, including the salsa. Kraft is the market leader in our stores. In steak sauce we've had the A.1. Bold for about six months and it is selling well," Corcoran said.

There is definitely a strong competition between manufacturers, and there are lots of coupon drops, freestanding inserts, in-ad features and lots of advertising, Corcoran said, adding that private-label barbecue sauce is selling well.

Martin of R&M Foods in Mississippi said, "We merchandise the condiments differently during the summer months by using special displays. We tie in the barbecue sauce with charcoal, picnic items and such."

Jost of Harp's said most of the growth in barbecue sauce is coming from upscale items, such as gourmet items and K.C. Masterpiece. "On the other hand, there is a lot of activity this year with Kraft and their prepriced barbecue sauce, which will increase that category," Jost said. "In this part of the country there is a lot of activity in the low-end barbecue sauce, like Hunt's and Heinz."

Some of the new chicken items have showed some growth, Jost added. "The honey mustard and honey Dijon are good combinations. I think when you tie those items in with the meat sales, you can show some good sales growth in it. Last year we merchandised our upscale K.C. Masterpiece in our meat market, and that helped to build sales," Jost said.

Harp's merchandises condiments in the summer much like it does cocoa in the winter.

"You rely primarily on secondary displays and those types of marketing approaches to capture sales. We try to have seasonality-type sections and that allows extra capacity," Jost said.

"The condiments are driven by a lot of manufacturer support. Everyone wants to be in the Sunday ad," said Seaway Food Town's Rieck.

Several leading manufacturers have sought to broaden their sales base by introducing line extensions and new flavors of condiments, particularly in the barbecue sauce category.

Kraft General Foods, Glenview, Ill., has added Kraft salsa, Kraft Teriyaki, Bull's-Eye salsa and Bull's-Eye honey mustard barbecue sauces to its lineup of more than 20 barbecue sauces.

"In the barbecue sauce category we have had consistent moderate growth for several years now," said Patricia Shafer, a Kraft General Foods spokeswoman. "We have seen that there is tremendous use of barbecue sauce, not only outdoors on the grill, but also in terms of indoor barbecuing." Hunt Wesson, Fullerton, Calif., began shipment of new barbecue sauces in teriyaki and honey Dijon varieties in March.

"The barbecue category itself is up slightly over the course of the last couple years, about 2% to 3% each year, and we are holding our own. It is a very, very competitive category from the standpoint that everyone tries to get in very early and lock up the season as early as they can," said Dave Oshlag, product manager at Heinz USA, Pittsburgh.

This year Heinz has introduced a Buffalo wing-flavored barbecue sauce that can be used as a condiment or to make spicy Buffalo wings. It is also expanding the distribution of its 57 Barbecue Sauce, which is available in the South.

Clorox Co., Oakland, Calif., has added honey Dijon and honey teriyaki flavors to its K.C. Masterpiece line of sauces.

Campbell Soup Co., Camden, N.J., has expanded its Open Pit barbecue sauce line by four items: Open Pit Char Grill and Open Pit Thick 'N Tangy Tex Mex with red peppers, onions and jalapeno; Brown Sugar & Spice and Smokehouse Grill with a mesquite flavor.

Allied Old English Corp., Port Reading, N.J., has reintroduced its barbecue sauce under the Raging label in original, hickory and spicy varieties.

And Nabisco Brands, East Hanover, N.J., has completed the national rollout of its A.1. Bold steak sauce.

Although there are hosts of small, regional brands of barbecue sauces on the market, some retailers tend to shy away from them.

"We really don't carry too many of the small independents because basically you have to buy 'X' number of cases, and we don't want to do that," said Gordon of Rogers Markets.

"There is a lot of small-brand activity in and out, but we don't deal in that too much," said Jost of Harp's. "We have a couple that are regional that have just come in, like Country Bob's. They have to be very heavily marketed and demoed. They seem to be segmented quite closely into the area."