CHICAGO – Indulgent flavors, cleaner labels and alternative nut butters are shaking up the spreads category. According to Mintel, a Chicago-based research firm, the nut and fruit spreads segment is projected to reach annual sales of $6.5 billion by 2018 — and that doesn’t even include dips or dairy options.
One in five consumers crave more indulgent nut-based spreads, and product developers are churning out decadent options to meet the demand. Between 2009 and 2013, there was a 97.7% increase in product launches that represented new varieties or range extensions, Mintel said. Recent additions from the J.M. Smucker Co. include Jif hazelnut spread in salted caramel and mocha cappuccino varieties and a whipped peanut butter line with a s’mores flavor.
Chocolate chunks, wild honey and such flavors as cookie, raspberry and banana sweeten PB Crave, a line of gluten-free peanut butter from Curt’s Peanut Butter Co. Peanut butter varieties from the Peanut Butter & Co. include cinnamon raisin swirl, maple, white chocolate, and dark chocolate.
The success of Nutella and similar sweet spreads has lured new players to the market. The Hershey Co. hopes to unwrap new opportunities in the $3.4 billion category with its recent launch of Hershey’s Spreads, including chocolate, chocolate with hazelnut, and chocolate with almond varieties packaged in 13-oz jars.
“Brands are introducing chocolate-based spreads, including brands within the category, such as Jif, but also brands outside of the category, like Philadelphia,” said Amanda Topper, food analyst at Mintel. “This is helping to blur the lines between the use of these products as a spread or dip and demonstrating the product’s cross-category appeal. The perception of peanut butter as a kid’s food has slowly eroded as the category has shown more functionality, as both an ingredient and a snack.”
While sales of nut spreads increased 57% between 2008 and 2013, fruit-based spreads fell 1%, suggesting a lack of innovative product development within the segment. Ethnic flavors and added nutrition or protein may help expand the segment beyond breakfast, the most common meal occasion at 55%, Mintel said.
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Butters with benefits
Nutrition tops the list of attributes consumers are seeking in spreads. Fifty-five per cent of consumers surveyed wish there were more nut-based and sweet spreads that offered health benefits, such as added vitamins or antioxidants, and 47% said they prefer spreads with health claims over traditional products.
While protein claims drive nut spread purchases, fruit-based products without added sugar or high-fructose corn syrup carry appeal with consumers. More than a third of those surveyed agreed sweet spreads lack nutritional value. However, consumers also are shying away from artificial sweeteners, according to Smucker.
“… there is a segment of consumers who are shifting away from artificially sweetened products that is impacting what we refer to as our better-for-you line of fruit spreads,” said Vince Byrd, president and chief operating officer, during a Feb. 14 earnings call with financial analysts. “Reflecting this trend, we are focused on ensuring we have the right product offerings to meet the needs of our consumers.”
Labels getting cleaner
With 36% of consumers interested in spreads without additives or preservatives, manufacturers are making efforts to shed such products of controversial ingredients. Kraft Foods Group has revamped its Philadelphia cream cheese brand with an ad campaign that promises farm-to-fridge freshness and new soft cream cheese flavors made with no artificial ingredients and more real fruits and vegetables. The brand renovation also includes last year’s introduction of Philadelphia 2X Protein cream cheese spread, which contains twice as much protein as regular cream cheese with less fat and calories per serving than peanut butter.
Also buttering up to health-conscious consumers, Unilever USA recently rolled out two spreads with simple ingredients. Made with yogurt and a blend of canola oils, I Can’t Believe It’s Not Butter Deliciously Simple and Country Crock Simply Delicious contain no artificial preservatives or flavors, hydrogenated oils or trans fats and have 70% less saturated fat than butter.
B&G Foods plans to reposition its Polaner All-Fruit preserves as a product line made without bioengineered ingredients, and Smart Balance recently announced the removal of bioengineered ingredients from its flagship line of buttery spreads with a full retail conversion by early summer.
“Essentially, consumers like the idea of a healthier alternative, but at the end of the day, they also enjoy their indulgences,” Ms. Topper said. “That said, there are certainly ways to achieve both, as Nutella has shown. It’s seen as an indulgence, but one that people can rationalize given its claims that it includes no artificial colors or preservatives. Manufacturers of gourmet spreads would be wise to also consider incorporating natural or organic ingredients which, in turn, may also warrant a higher price point.”
Cracking the category
Also gaining ground are almond, cashew and sunflower seed butters, with 22% of consumers buying such alternatives to peanut butter within the past six months. Though nearly half of survey participants agreed peanut substitutes are suitable for those with nut allergies, the number of nut or chocolate-based spreads with a non-allergen claim has declined by 30% since 2009.“Although peanut allergies still only affect a relatively small proportion of consumers, this posits brands a greater opportunity to promote these alternative-based spreads not only among those with allergies, but who are looking to transition to more overall healthy alternatives,” Ms. Topper said. “These types of spreads may offer added variety and a healthier option for peanut butter lovers and can also offer a safe solution for consumers with a peanut allergy.”