Not so sweet

The sweet spread segment is struggling, but an injection of innovation could turn things around.

Category experts note trends toward higher-quality ingredients, sophisticated and savory flavors, and gourmet formulations. Trends point away from the use of chemicals and lower-quality sweeteners.

If manufacturers focus more on satisfying consumer desire for natural ingredients, added nutrition, lower sugar content and exciting new flavors, the category could grow, says global market research firm Mintel.

Mintel’s March report, “Nut-based Spreads and Sweet Spreads — US,” tracks “fairly stable” sweet spread sales of $1.1 billion in 2014, but notes that nearly all leading sweet spread brand sales declined during its review period. One exception was French gourmet brand Bonne Maman, which succeeded, Mintel surmised, because of its charming upscale packaging.

U.S. retail sales of sweet spreads dropped an estimated 3.1 percent from 2012 to 2014, according to Mintel, citing figures from Chicago-based market research firm Information Resources Inc. (IRI), U.S. Census Bureau data and Mintel’s own numbers.

IRI sales data for the 52 weeks ending Sept. 6 show the jam, jelly and preserves sector suffering dollar sales declines of 1.9 percent overall and 6.6 percent in the private label arena. Unit sales slid 2.5 percent overall and 6.2 percent for private label.

Shoppers are beginning to shun high-fructose corn syrup and added preservatives, Mintel’s report notes. What they want instead are no-sugar-added spreads made with natural ingredients that offer added health benefits from things such as protein or “superfoods” such as chia or acai.

Aim high

If retailers want to stand out in the category, they need to innovate, agrees Ann Stettner, managing partner of Medusa, N.Y.-based Wild Thymes, a maker of specialty savory jams, chutneys, sauces and vinaigrettes.

“People are much more adventurous. (They) are clamoring for better ingredients and interesting flavors,” she says. “More and more consumers are demanding healthy ingredients, and that is an ongoing trend.”

The nation’s ever-changing demographics figure into the equation for success as well. The diversifying U.S. population is exerting its influence over cuisine, Stettner adds.

In this category, one thing flavor innovation can mean is the addition of heat. When Montecito Roadhouse Inc. was testing its jalapeño and jalapeño-mango jellies, then under development, the company’s people kept hearing the same refrain: “Make it hotter.” So they did, says Scott Rehart, founder, president and CEO of the Westbrook, Maine-based gourmet, artisanal tortilla chip, jelly and ice cream manufacturer.

Heat is a major trend, as is the combination of “sweet and heat,” says Kate Whitney, marketing and account manager for Schlotterbeck & Foss Co., Westbrook, Maine. The company specializes in premium all-natural products.

Hot pepper spreads and those that combine sweet and hot ingredients — such as habanero pepper jelly with pineapple or mango — are gaining in popularity, Whitney observes.

Health-driven trends have also positioned fig and pear flavors at the front of the line. Bacon is another strong trend across this and seemingly all other categories, Whitney says.

Exotic blends and regional flavors are sought after, too, notes Flemming Sorensen, vice president of sales for Scandic Food A/S, Vejle, Denmark. Scandic manufactures a wide array of marmalades, jams and jellies, some featuring Scandinavian fruits such as lingonberries and red currants.

Flavor blending is an art, Stettner says.

“You can’t trademark a recipe. But to balance flavors and get the most out of your ingredients is the closest you can get to trademarking,” she says.

Sorensen advises retailers to steer clear of using high-fructose corn syrup, artificial colorings or artificial flavorings. Consumers want their jams, jellies and preserves made with clean ingredients, he says.

Whitney advises retailers to also take advantage of seasonal flavors such as a spicy plum.

“Sophisticated flavor profiles and premium-tier products” are becoming more prominent in the category,” she says.

Beauty sells

When it comes to packaging jams, jellies and preserves, many industry experts point to glass as the ideal.

“This category is made for glass,” Stettner says. “Yes, it’s more expensive; yes it’s heavier, but it gives the product a longer shelf life [and] it’s 100 percent recyclable. The jars are often reusable and, if executed correctly, give the product a premium look.”

Whitney agrees, adding that artistic labels can go a long way toward selling the product. Schlotterbeck & Foss provides hand-illustrated labels that focus on the ingredients, she adds.

The glass jars that Wild Thymes uses are among the reasons consumers perceive their products to be premium and healthful, Stettner believes.

It’s also vital to keep the label clean and simple, because that’s what consumers want, Sorensen says.

“On a label, you have so many statements to make, but a [simpler] label makes the association that this is a clean product,” he states.

Consumers are interested in buying foods that are good for them, Sorensen adds. So retailers should make it easy for consumers to ascertain what is wholesome about the product. Consumers scanning the shelves want to know that the retailer “has made a good buying decision for them; they want to feel confidence in the product,” he declares.

Highlight usages

Retailers that enter this category and venture beyond mainstream products could capture revenue that might otherwise go to specialty retailers, Stettner asserts.

“With the amount of information out there, with access to information on the Internet, on TV, on radio or in print, people in every socioeconomic group understand more [about food and cuisine] than they did 10 years ago. Don’t overlook all these markets,” Stettner advises.

Demonstrating how to use jams, jellies and preserves in meal preparation is essential to their success, Stettner adds.

“It’s not universally known what you do with a chutney or a savory jam, but when [consumers] taste them [in combination with other foods such as roasted meats], it becomes a no-brainer,” she explains.

Consumers are more driven than in the past to use spreads as an ingredient in a soup or a bakery item such as a croissant, Whitney states.

“We see a trend of producing jellies — like jalapeño — for cooking,” Sorensen adds. “People use them to flavor meats or even in salads.”

In the cross-hairs

One of the biggest mistakes retailers make is missing opportunities in cross-merchandising, Stettner asserts.

Whitney advises retailers to think about, recognize and take advantage of cross-merchandising opportunities for jams, jellies and preserves.

“That’s my number one piece of advice,” she says.

Place products near the meat counter, in the deli, with cheese or bread, “so you’re really giving your consumers the tools they need to understand what they need to know,” to use different types of preserves, Whitney recommends.

And avoid being territorial, Stettner advises. Different retail departments should help each other in this endeavor.

“Cross-merchandising is very important. After all, the more that sells, the better the store does,” she says.

Consumers at the meat counter often ask for serving suggestions.

“They want to know what other food products go with the items they are buying,” Stettner explains. They ask for cooking advice. This is a great opportunity to sell additional product.”

It’s also imperative to get consumers to try the products. Retailers would benefit by offering recipe ideas or in-store demonstrations.

“You can’t just expect people to try things without creating excitement,” Whitney contends.

Do satisfy consumers’ desire for natural ingredients, added nutrition and lower sugar content.

Don’t be afraid to experiment with spicy flavors.

Do consider product development tied to seasonal flavors.

Don’t miss the opportunity to educate consumers on nontraditional usages.