Broadening the Horizon

Dairy Field, Oct 2004 by Cook, Julie

Sour cream and dip makers focus on widening varieties, increasing availability and pitching new uses.

Milk, cheese and, to some extent, even ice cream - these dairy products have long been considered staples of the American diet, items that can likely be found in most every refrigerator in the nation. Not so for sour cream and dips.

While they certainly have their own fervent followings, these cultured creations typically won't be found on most consumers' weekly grocery lists. In part, that's because they have long been stigmatized as "special occasion" foods that are too decadent and fat-laden for everyday consumption.

Granted, few party tables or Super Bowl Sundays would be considered complete without a tub of French onion dip, strategically placed alongside a bowl of chips or veggies. But such occasions are far from everyday occurrences, so dip certainly isn't top of mind for most consumers when they hit the supermarket each week.

Fortunately, sour cream isn't nearly as limited in the minds of most consumers. On the contrary, the burgeoning Hispanic-American population, along with the related increasing popularity of Mexican cuisine, gave sour cream quite a boost over the past 10 years. From tacos to quesadillas and beyond, a growing number of consumers have taken to plopping a dollop of the creamy white stuff on their food before digging in.

Unfortunately, both sour cream and dip experienced a less than banner year, as recent data from Chicago-based Information Resources Inc. (IRI) indicates. During the 52-week period ending August 8, 2004, dollar sales of sour cream rose 0.6 percent, but unit sales fell 1.9 percent, in U.S. food, drug and mass merchandisers, excluding Wal-Mart. Refrigerated dips fell 0.5 percent and 4.1 percent. Only shelf-stable dips managed to achieve growth in both dollar and unit sales, which rose 0.8 percent and 2.1 percent, respectively.

Processors cite a variety of causal factors, including the sluggish economy, high raw-ingredient prices - particularly butterfat - and the low-carbohydrate craze. While dips themselves are naturally low in carbohydrates, some processors believe they have been suffering much the same fate as butter, which saw sales fall because carb-conscious consumers were avoiding many once-popular "carriers," like bread and baked potatoes.

"Chip sales are down considerably this year," says Dave Haley, regional director of marketing, Midwest region, Dean's Dairy Group, Dean Foods Co., Rosemont, Ill. "If the chip companies are down, sour cream-based dips are going to be down as well."

Not everyone agrees with Haley's assessment of the situation. Pete Kondrup, general manager of Westby Cooperative Creamery, Westby, Wis., says he hasn't witnessed any real impact of the low-carb craze on sour cream or dip sales. "People that eat dips usually aren't that concerned about their weight anyhow," he says.

Meanwhile, Betsy Watson, marketing director, Anderson Erickson Dairy Co. (AE), Des Moines, Iowa, firmly believes that even the most carb-conscious consumers will continue treating themselves from time to time. And when they choose to let their hair down and loosen their restrictions on carbs, chips and dip is one of the more popular options.

"If people are going to consume carbs, it's going to be something that's a treat for them," Watson says. "For some people, that might be a dessert. For others, it's a salty item. When they choose something like chips, dip frequently enters the picture."

Making News

To entice consumers to reach for a container of dip when they are seeking something decadent, a number of processors have unveiled new - and, frequently, bold - offerings in recent months. AE introduced Southwestern French Onion Dip, which relies on chipotle peppers to give it a little extra kick. According to Watson, consumers have been relived to find that it's not a hot, spicy dip.

Westby experienced a similar reaction to its new Roasted Tomato Red Pepper Dip, a naturally cultured, sour cream-based dip featuring real chunks of tomatoes and peppers.

Last year, the company rolled out Tater Topper, a sour cream-based product featuring large chunks of onions and chives. General Manager Tom Gronemus, developer of the product, claims that a couple of dollops of Tater Topper "can transform any plain potato into a gourmet dish." Although the Topper was designed specifically to complement a baked potato, Gronemus says it makes a great dip and, for his tastes, pairs particularly well with Ritz crackers.

All Westby products are made from rBST-free milk, a selling point Kondrup says means a great deal to some consumers and absolutely nothing to others. "There's a certain niche out there for whom that's the reason they buy our product, and then there's another group that doesn't really care," he explains. "There are people that are definitely interested in it, so we feel like we're filling a certain niche."

Responding to the growing demand for organic dairy products, Columbus, Ohio-based T. Marzetti Co. introduced Organic Ranch Veggie Dip this past January. Hailed as the first USDA Certified Organic Veggie Dip on the market, the product joins Marzetti's sour cream-based veggie dip line, which currently holds the title of bestselling refrigerated dip brand, boasting a 19.0 percent dollar share. In October, Marzetti plans to boost its offerings even further, rolling out three more new products - Buffalo Ranch Veggie Dip, Bacon Tomato Veggie Dip, and French Vanilla Yogurt Fruit Dip.