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Room for innovation, expansion in nut butters & sweet spreads: Mintel analyst

By Maggie Hennessy , 16-Apr-2014
Last updated on 16-Apr-2014 at 15:07 GMT

Mintel's Amanda Topper: “Large national brands like Jif and Skippy are really taking advantage of that established consumer trust and loyalty and expanding on existing offerings.”
Mintel's Amanda Topper: “Large national brands like Jif and Skippy are really taking advantage of that established consumer trust and loyalty and expanding on existing offerings.”

It’s hard to find an American pantry that doesn’t contain peanut butter, chocolate hazelnut spread or some variation therein. But there’s still room for growth in the $3.9 billion nut-based and sweet spread category, according to a report from Mintel. 

As a whole, the category grew 34% from 2008-13, and Mintel predicts sales in the nut-based spreads and sweet spreads category will increase 65% over the next five years to reach $6.5 billion in 2018.

The US explosion of category mainstay Nutella has driven several non-spread brands to enter the market in recent years, including Philadelphia. Indeed, 2009-13 saw a 97.7% increase in the percentage of new products representing new varieties or range extensions, according to Mintel. A quick search of the market research firm’s new product database for the past year revealed that new products and line extensions were exactly even, at 37% each.

So where is growth originating for this long-established category?

“Tweaking the variety of flavors and bases is keeping this pantry staple fresh and ever-changing,” Mintel food analyst and author of the report, Amanda Topper, told FoodNavigator-USA. “Large national brands like Jif and Skippy are really taking advantage of that established consumer trust and loyalty and expanding on existing offerings.”

Segment-leading Jif got a boost with the launch of its own hazelnut spread (also available in mocha cappuccino flavor). “Their success is stemming in part from Nutella’s success. They took the approach of line extension, while also having a little new product innovation,” Topper noted.

For Jif, innovation came in the guise of Jif Whips—a versatile line of creamy peanut butter spreads—as well as through nut butters with alternative bases, such as almond and cashew.

Topper also expects Skippy, third in overall brand share, to introduce alternate butters in the coming months to compete with the new Jif offerings.

Small brands willing to take risks with flavors, premium varieties

But not all the innovation is coming from the big brands. Disruptive marketers are huge drivers of the growth in this market, particularly in the health and wellness arena. (Mintel data found that 55% of consumers wish there were more nut–based and sweet spreads that offered health benefits, such as added vitamins or antioxidants, while nearly half (47%) prefer spreads with health claims over traditional varieties.)

“Innovation related to healthier options might take the form of added protein, added vitamins or natural claims, just to give that value add to products consumers are already trying to feel better about through their choices,” Topper said. “We’re seeing that a lot with smaller companies that are more willing to take a risk. Spreads are already positioned as better for you. But many of these firms are experimenting with interesting flavors, added vitamins—really more of a gourmet premium approach.”

Among the standouts is Justin’s, a small but “booming” Colorado company with a strong focus on natural, organic and convenience. “They’ve successfully combined portability with the natural and organic factor with these 80-calorie squeeze packs for easy consumption on the go,” Topper said. “You can throw them in your bag and they pair with pretty much anything.”

Peanut Butter & Co. is another innovator in the startup category, expanding its peanut line into the savory realm with its The Heat is On product—comprising peanut butter blended with “fiery” spices. “It’s promoted for use with vegetables or in a stir fry or curry, or incorporated into hot sauce for Buffalo wings. They’re changing usage there and to make peanut butter more versatile.”

That said, the future of the category lies in both the versatility and familiarity of nut-based and sweet spreads.

I think that sense of nostalgia is important, but versatility is number one. Spreads can be a snack on their own, a snack with another snack, part of a meal and even an ingredient in cooking. And because they’re rooted in that sense of familiarity, the ingredients can be paired with growing list of flavors, such as sweet, savory, spicy, and ethnic flavor combinations. Positioning them that way helps consumers see they’ll get a lot of bang for their buck,” Topper said.

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