Nature’s Sweeteners Rule

Consumers long have relied on syrups and honey to add sweetness and flavor to foods and beverages. The segment also has been a sweet spot for store brands. For example, despite the name (and bottle shape) recognition of Mrs. Butterworth’s, Aunt Jemima and Log Cabin syrups, private label table syrups enjoyed a 31.6 percent dollar share of the category, according to data from Chicago-based market research firm IRI for the 52 weeks ending June 16. And store brand honey had a 48.5 percent dollar share during the same timeframe.

Growth potential in syrup

“I see maple syrup as a growing area [for store brands], especially when most maple syrup brands are not well recognized by consumers, and we start with a better price point,” says Andrew deLivron, U.S. sales and marketing manager, Lapierre Maple Farms and Lapierre Equipment, based in Pottersville, N.Y “We have also learned that consumers purchase syrup based on the container, not the brand.”

But as the national brands launch new products, store brands face a more competitive environment, along with higher costs.

“Manufacturers continue to face price advances on corn syrup, packaging materials, as well as freight,” says Cliff Beahm, vice president – sales, Griffin Food Co., Muskogee, Okla. “Staying competitive in the segment and maintaining value pricing versus the national brands is a challenge.”

Keep it pure

Historically grocery stores have not carried a deep selection of syrup SKUs, notes Arnold Coombs, director sales & marketing, Bascom Family Farms, Alstead, N.H.

“But consumers see Whole Foods and Trader Joe’s carrying a broad selection, and they expect that now at all stores,” he says. “One of the beauties of [pure] maple syrup is that it doesn’t have a big footprint but packs big sales.”

As syrup consumers look for increased quality and healthful options, 100 percent pure maple syrups are gaining acceptance, despite their relatively high per-bottle price. According to a spokesperson for St. Louis-based Ralcorp Holdings, they are not category leaders because of their price, but consumers would probably buy them more often if they cost less.

“There is a strong desire on the part of consumers to eat more healthy,” deLivron adds. “Maple syrup is preferred over sugar and corn syrup.”

He notes that consumers still could be educated more about the different uses for maple syrup, which could lead to increased sales of 10 percent to 15 percent a year.

“The typical consumer uses less than 3.8 ounces a year,” he says. “Those who are informed will use it for more than pancakes and waffles. It can be used, for example, as a sweetener in baked products, glazes on meats and fish, ice cream and Greek yogurt.”

Also, in 2014, consumers will see standard descriptions on their syrup bottles for the first time, eventually eliminating confusion regarding states’ individual grading systems. The International Maple Producers Board wants all labels to carry one of four global grades: Grade A Golden, Grade A Amber, Grade A Dark and Grade A Very Dark.

“These changes will initially lead to some confusion for shoppers, but they will ultimately help sales,” Coombs says. “We have an education program in place for the new terminology.”

Think flavors and agave

Imitation syrup also is receiving more attention today, and is shopped by an important demographic: parents.

“There hasn’t been much true innovation by the branded manufacturers, and the category is somewhat commoditized,” says Rob Miller, president and CEO of Trailblazer Food Products, Portland, Ore. “This means it’s ripe for market share gains by private label manufacturers.”

Retailers and suppliers could work together on flavor profile development and cost reductions in the imitation segment to offer store brands that are priced right in comparison to the national brands, he says.

“The flavorings themselves in an imitation syrup can drive much of the cost,” Miller says. “Working with a supplier to get the right flavor match to the national brand at the lowest possible cost can provide for a tremendous price gap or opportunity to promote aggressively.”

Agave syrup also represents a huge opportunity for innovation in the syrup or sweetener category.

“A base private label offering needs to be available at all retailers either in the sweetener category or syrup category” Miller says. “And if its merchandised as a syrup, there are tremendous opportunities to provide flavored agave syrups.”

On the assortment and merchandising side, Beahm points to West Des Moines, Iowa-based Hy-Vee as a standout.

“They offer a broad range of flavors and sizes in both national brand equivalents and a value line,” he says. “They also are very aggressive in periodic price promotions at substantial reductions, and do a great job of end-cap display merchandising.”

Back to the hive

“Sugar and Sweeteners – US,” a September 2012 report from global market research firm Mintel, notes that honey might be one of the smallest segments at retail, but its strength lies in its inherent wholesomeness. As a natural sweetener, it can be used in beverages, cooking and baking. And it appeals to “foodies,” who increasingly want to learn more about the type of bees, hive location and flowers involved in forming the end product.

Jill Clark, vice president of sales and marketing for Dutch Gold Honey, Lancaster, Pa., says her company has noticed that a lot of retailers have diversified their offerings here. Instead of just clover honey, they’re offering organics and upscale varietals made predominantly from the nectar of a single type of flower such as an orange blossom or a wild flower.

“Retailers are also responding to their consumer base who wants raw, unprocessed honey” she says.

Private label already dominates this category. However, “the private label honey business has remained in a slow growth or flat sales pattern, which is remarkable, given a continual rising price market and advancing retail prices,” says Dick Davenport, Midwest regional marketing director for the Sioux Honey Association, Sioux City Iowa.

Not helping the situation is the fact that the honey industry was rocked with a scandal this past winter when five individuals and two U.S. honey processing companies were charged with federal crimes (and fined) in connection with a nationwide investigation of illegal importations of honey from China. According to the United States Attorney’s Office, Northern District of Illinois, the honey was mislabeled as coming from other countries to avoid antidumping duties or was adulterated with antibiotics not approved for use in honey. Altogether, the seven defendants allegedly avoided antidumping duties totaling more than $180 million.

To counteract this bittersweet category development, as well as years of allegations of honey dumping, many honey processors are supporting True Source Honey, an industry group that offers the True Source Certified traceability program to help ensure ethically sourced honey. In fact, honey is traced all the way back to the hive, Clark notes.

Embrace new trends

Honey packaging also is seeing a makeover. Honey traditionally has been sold in glass jars and plastic bottles, but some processors now are using inverted bottles such as those used for some condiments, Clark says. He also notes that Cincinnati-based Kroger Co. and Harris Teeter, Matthews, N.C., are two retailers that are embracing new product trends such as organic and varietals on the store brand honey side. Kroger also is known for its strong private label marketing support, and honey is no exception. The retailer long has merchandised 48-count “Bear Shippers” of 12-ounce honey items, all sourced in the USA, Davenport says, and provides “consistent support via displays, tie-in merchandising and pricing of the category.”

But some other retailers could step up efforts here. Common missteps in the category, Davenport notes, are accepting private label programs only on price, exercising limited control over quality and overlooking cross-merchandising opportunities for honey with compatible items (such as tea, cereals and bakery items).

“Honey is an ‘ingredient item’ to many recipes and needs to be linked to appropriate items,” he says.

Momentum also is building behind even more wholesome offerings.

“In fact, I expect to see continued growth in unique product offerings, non-GMO and fair trade options,” Clark says.

Do educate shoppers about uses for maple syrup beyond topping pancakes and waffles.

Don’t ignore growing consumer interest in agave sweeteners and syrups.

Do consider adding organic and upscale varietals to the store brand honey assortment.

Don’t overlook cross-merchandising opportunities for honey as an ingredient.