Stuck on you: jams and spreads

 

When Charmaine Graham of Ancaster, Ont., searches supermarket shelves for something to send to school with her daughters Jade, 8, and Julia, 4, her criteria is typical of most parents across the country: Does it have peanuts? “I would love to send any kind of nut product to school, as my children love them, but our school has a strict policy of no nut products,” she says.

Yet if peanut butter is having an image problem in the school system, it’s not reflected in sales. According to Nielsen, Canadians ate more than $191 million in peanut butter during the 52 weeks ending Aug. 28, 2010, up 3% from the year before. It’s a different story with that other popular breakfast spread category. Jams, jellies and marmalades had a flat year, with sales of $162 million, up just 1% from a year earlier and volume down by 1%. 

The culprit, it seems, is toast. Canadians are eating less of it. As a result, demand for jam has been steadily dropping, says Joel Gregoire, food and beverage industry analyst for the NPD Group. Ten years ago, the average Canadian ate jams and preserves more than 35 times per year. Now it’s only 29 times. Jam is seeing declines to one degree or another across all age groups, says Gregoire. Peanut butter, on the other hand, has experienced growth among consumers 45 and older in the past decade, he says. “As more mature consumers eat more peanut butter, kids and younger adults are eating less.”

With this economic downturn we are seeing people go back to basics,” says Stong’s Cori Bonina. And that’s driving interest in jams and spreads

Retailers have noticed both trends. Troy Dewinetz, grocery merchandising manager at Buy-Low in Vancouver, says peanut butter is a strong category at all of his stores. “Our private label organic in the 500-gram size is the No. 1 seller in that size, and that surprises the heck out of me.”

While jams and spreads are still important, Dewinetz says the category is largely stagnant. “There is just not a whole lot of exciting innovation over the last little while and the innovation we have seen has actually flopped,” he says. Dewinetz says his stores have tried to breathe life into the category with imports and funky flavours. But he says that the basic raspberry and strawberry jams still drive the business in his store. The one bright spot he’s noticed is in the no-sugar added segment.

Dana Somerville, marketing director for Kraft Canada, says 70% of Canadians eat peanut butter on a weekly basis. While peanut butter is most often eaten in the morning, she says the recent introduction of Kraft Whipped Peanut Butter for dipping should spread the usage into other times of the day.

Since Hilton Soy Foods introduced its peanut butter replacement about a year ago, sales for the soy butter have doubled. President Scott Mahon says the company’s creamy and crunchy “Safe4school Wow Butter” has the same taste, texture and nutritional aspects of peanut butter, but without the allergy problems. “There’s a huge demand for the product by parents, because they struggle every day with what to send to school with the kids and many kids don’t like ‘lunch’ meats,” he says.

The problem is, retailers tend to move the soy butter around between the peanut butter and natural food shelves and consumers don’t know where or what the product is. “The best location is right beside the peanut butter for those who aren’t allergic but are looking for lunch solutions,” he says.

Money in honey

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Wander down a typical grocery store aisle and next to those peanut butters, nut butters, jams and spreads you’ll find at least a shelf or two of honey. While volume remains the same, honey experienced sales of $83.6 million–a 9% increase over last year. Heather Clay, CEO at the Canadian Honey Council in Calgary, says consumers’ ongoing interest in everything local is helping drive sales. A survey undertaken by the council last year found that eastern Canadians tend to eat honey for breakfast, while those in the West use it as a sweetener in tea.

“Strangely, the overall consumption is almost the same,” she says, adding that Quebecers and new immigrants tend to buy honey for its healthy attributes. Nicole Fetterly, nutrition operations manager for Choices Markets in British Columbia, says her customers are concerned about the sugar content and the use of artificial sweeteners in jams and spreads. “Our customers are looking for more natural alternatives so they don’t want to go the route of artificial sweeteners,” she says. “We are carrying a lot more naturally sweetened spreads like Crofter’s.”

Crofter’s, based in Parry Sound, Ont., has 24 different SKUs with strawberry, raspberry and blueberry still the biggest sellers, and superfruit increasingly appealing to consumers searching for healthy foods and to baby boomers looking for antioxidants in the fruit, says LeeAnn Stevens, brand development manager. Gabrielle Latka, Crofter’s marketing director for Canada, was surprised to learn, from a marketing survey, that most people see jam as a comfort food.

Another surprise: more than threequarters of all jam eaters are adults. Latka says 65% of respondents believe that jam is healthy and almost half would expect to find this healthy jam in the regular jam aisle. Seeing jam as a comfort food doesn’t surprise Cori Bonina, president of Stong’s Market in Vancouver. “With this economic downturn we are seeing people go back to the basics,” she says. Stong’s sells everything from basic jams to a red pepper jelly and a roasted garlic and onion jam that goes with roast beef. “People are branching away from just toast and jam; it’s a much bigger section now,” she says.

3 Merchandising Tips

1. Go big and price small. Mike Bayer, assistant manager at Stong’s, likes to build big displays of premium-priced jams. “I’ll buy 400 cases of Bonne Maman and build a huge display and sell it just above cost,” he says. “People try it because of the price and then they come back and buy it at the regular price.”




2. Give ’em a taste. The easiest way to sell new jams is to set up a sample table. If customers sample Crofter’s fruit spreads in the store, it’s often enough to encourage them to give the product a try, says Gabrielle Latka of Crofter’s. “Demos sell a lot of products.”

 

3. Mix it up. Stong’s Cori Bonina recommends moving unusual jellies or savoury spreads into other sections of the store. Stong’s customers find savoury spreads in the jam section, but also in the gourmet section or near the deli. “There are a lot of jams or spreads that are particularly good with cheese, so we’d merchandise those on our cheese table with fancy crackers and so on.”