Innovation is boosting growth in the spreads category

Once defined by basic offerings and specific occasions, the spreads category is being transformed as consumers seek better-for-you and on-the-go snacking options, as well as global flavours and products capable of elevating the everyday.

According to Fortune Business Insights, the global spreads category, which was worth US$85 billion in 2021, is expected to grow by 5.4% a year through 2029, eventually reaching US$132.2 billion. Flavour-driven, nutritious, and healthy dips and spreads have become “majorly popular,” the report says.

Those findings are echoed by research firm Mintel in its U.S. Dips and Savoury Spreads Market Report 2023, which attributes the category’s growth to its “accessibility and ability to boost at-home eating occasions.” While people are still using dips and spreads for their primary purpose, Mintel’s research found consumers are increasingly seeking them out for their versatility “and ability to add to different occasions and meals.”

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Susan Niczowski, president and founder of Toronto-area company Summer Fresh Salads, says innovation is important to the category’s growth. “Consumers are demanding bigger, bolder flavours that excite the senses, and [are] turning to spices and ingredients” to achieve their flavour goals, she says.

And while consumers remain fond of “tried-and-true” products, they’re also increasingly “very adventurous,” says Niczowski. That means a willingness to try “fun” flavours such as Summer Fresh’s Dill Pickle Hummus and the recently launched Dessert Hummus in Chocolate Brownie and Key Lime varieties.

“Consumers gravitate to brands they trust when it comes to innovation, and consumer segments like millennials and gen Zs are always hunting for the next big food item,” she says.

Jo-Ann McArthur, co-founder and president of Toronto’s Nourish Food Marketing, says several key factors are leading to innovation in the category. Most notably, the hybrid work environment is contributing to more at-home snacking occasions, and people looking for different eating experiences because they’re dining out less at restaurants.

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Spreads are also being used with fruits and vegetables rather than just their traditional application on crackers and bread. And, she adds, sweet and nut-based spreads are increasingly being consumed outside of their traditional breakfast and sandwich occasions.

Spreads also offer increasingly adventurous consumers an “easy, relatively inexpensive way to try a new flavour,” says McArthur. She cites the growing popularity of the Tunisian chili paste harissa as one such example.

Producers are getting innovative with traditional ingredients, too. Saskatoon-based company One Meal a Day, for instance, has introduced lentil spreads made exclusively for Co-op Food Stores: Co-op Gold Pure Lentil Butter, and Co-op Gold Pure Chocolate Lentil Spread.

Co-op bills the new offerings not just as options for those with nut allergies, but also suitable for people seeking “unique flavours,” while boasting an enticing combination of high-protein and low fat. 

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Even kid-friendly spreads such as peanut butter are catering more to an adult audience. Montreal-based Manba, for example, specializes in Haitian peanut butter that is spiced with Scotch bonnet peppers. It is sold in Classic, Spicy, Extra Spicy, Crunchy and Creamy varieties.

Heather Fadali, vice-president of product management and innovation at Loblaw, points to No Name Dark Roast Peanut Butter as an indication of the grocer’s ongoing effort to provide an “elevated” spread option for adults.

The spreads category, she says, is being reshaped by a combination of global flavours and trending items on restaurant menus. “Different spreads like tahini, peanut butter and jams continue to be popular, with new varieties constantly arriving on shelves,” she says.

One of the key factors contributing to the growing popularity of spreads is they are suitable for a variety of eating occasions, says Fadali. “The versatility is one of the reasons they are so popular with our customers,” she says.

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The shift towards more plant-based and health-conscious diets is also showing up in the spreads category, says Tatiana Bossy, co-founder and president of Quebec-based company Le Grand, which counts vegan cheese spreads, butters and pestos among its products.

“Where we’re going to see innovation is in the better-for-you space,” says Bossy. “People want to elevate the quality of the food they’re eating and not drown themselves in unhealthy choices.”

Bossy says as consumers turn to a more vegetarian diet, either because of the rising cost of proteins or because of health considerations, they’re looking to spreads to add a little pizzazz to veggies. 

While savoury spreads are popular, grocers are also seeing heightened demand for high-quality sweet spreads. Loblaw featured its PC Dulce De Leche spread in the most recent edition of its PC Insiders Report, with Fadali noting it can be served either as a topping or as an accompaniment to its PC Frozen Puff Pastry. Fadali also points to Loblaw’s PC Black Label British Columbia Raspberry Fruit Spread – a personal favourite, she notes – as another example of the grocer’s elevated offerings.

This article first appeared in Canadian Grocer’s February 2024 issue.