Technology firm uSamp - which works with several leading CPG companies on market research projects to help them get closer to consumers - conducted the research with 175 shoppers nationwide on February 22 and 23.
While most of its work is commissioned by brand owners or market researchers, this project was not paid for by the spread makers but conducted to showcase what uSamp can do, Justin Wheeler, VP of product innovation, told FoodNavigator-USA.
93% knew exactly where to find Nutella...
More than 300,000 consumers in the US have downloaded uSamp's app to their smartphone. From this pool, uSamp targeted regular shoppers of the spreads category who agreed to participate in research using their smartphones in the grocery store, and then follow-up later at home.
"First we asked them to walk to the part of the store where they can find these products," said Wheeler. "What was interesting is that 93% knew exactly where to find Nutella, while a lot looked for the Hershey spreads in the baked goods section or by the Hershey's syrups [ie. in the wrong place].
"Next we asked them to scan the barcode of their first, second and third choice when it came to which brand they would be most likely to purchase. Not surprisingly, 61% chose Nutella as the first choice followed by 22% for Hershey and 13% for Jif [the rest were undecided or would not buy], because Nutella is familiar.
"However, when we asked them to buy all three products and take them home [costs were reimbursed by uSamp], we then asked which they were most excited to try, and Hershey's came out on top, probably because it's new."
Overall, Nutella came out on top for taste, but Hershey a very close second
As for taste, consumers had the lowest expectations about Jif Hazelnut, but after tasting it, found it significantly exceeded expectations, he said, although all three products scored well on this front.
Overall, Nutella came out on top for taste, followed very closely by Hershey's, with Jif Hazelnut in third place [too much chocolate, not enough hazelnut taste]. Jif was also ranked the worst performer in terms of spreadability, with several shoppers finding it too thick, he said.
Meanwhile, price was a stumbling block for all three: “66% don’t like the price/value of these spreads, even when it came to their favorite.”
Interestingly, one takeaway for brand owners is that a high percentage of shoppers were not sure what they would eat the spreads with, he said: "There is an opportunity to educate consumers here."
Hershey’s CEO: What's great for us is, this is really incremental
Nutella was first imported from Italy to the US by Ferrero over 25 years ago, and remains the top selling branded hazelnut spread in America.
However, two major players have recently challenged its monopoly: JM Smucker, which entered the chocolate spreads market in 2012 with its Jif brand and now sells three flavors: Chocolate hazelnut, mocha cappuccino, and salted caramel; and Hershey’s, which entered the market in January 2014 with three flavors: Chocolate, chocolate with almond, and chocolate with hazelnut.
Asked about its new spreads on the firm’s Q4 earnings call last month, Hershey chief executive John Bilbrey said: “What's great for us is, this is really incremental. It's not cannibalistic to what we do already.”
The spreads also gave Hershey an opportunity to get into the breakfast space, he added: “It can be on traditional bread at breakfast occasions, but it [is also for] healthy snacking throughout the day.”
Jif Hazelnut has recently been relaunched
Early last year, JM Smucker CEO Richard Smucker told analysts he felt “enthusiastic” about the growth potential of Jif Hazelnut but has not commented on its performance since.
In Smucker's latest earnings call on February 14, he said the spreads had been re-launched, “showcasing new packaging along with a new variety”.
Price and ingredients
As for prices, there is not much between the brands on a per ounce basis. If you purchase them online at Walmart, prices quoted on March 5 are $3.64 for a 14.1oz jar of Jif Hazelnut, $6.42 for a 26.5oz jar of Nutella and $3.38 for a 13oz jar of Hershey’s choc hazelnut spread.
All three products have similar formulations:
Hershey’s: Sugar, vegetable oils (sunflower and palm oil), milk, hazelnuts, cocoa with alkali, hydrogenated vegetable oil (palm and canola), soy lecithin, salt, natural vanilla flavor.
Jif: Sugar, vegetable oils (rapeseed and palm), hazelnuts, cocoa processed with alkali and cocoa, skim milk, whey powder, sunflower lecithin, vanillin.
Nutella: Sugar, palm oil, hazelnuts, cocoa, skim milk, reduced minerals whey, soy lecithin, vanillin.
Click here to read more about uSamp.