COLUMBUS, Ohio -- Consumer trends in healthier eating will continue to lift produce sales -- and refrigerated dressings and dips will tag along for the ride, according to A. Richard Anderson, vice president of marketing for T. Marzetti Co. here.The $200 million produce department category of dressing and dips -- which, as T. Marzetti defines it, consists of high quality refrigerated salad dressings,

COLUMBUS, Ohio -- Consumer trends in healthier eating will continue to lift produce sales -- and refrigerated dressings and dips will tag along for the ride, according to A. Richard Anderson, vice president of marketing for T. Marzetti Co. here.

The $200 million produce department category of dressing and dips -- which, as T. Marzetti defines it, consists of high quality refrigerated salad dressings, refrigerated vegetable dips and shelf-stable fruit dips -- is riding high on fat-free product introductions and sales incremental growth, said Anderson in an interview with SN.

But even beyond fat-free, the dressings and dips fit well in consumer lifestyle trends that include:

Folks looking for dressings that match the latest in restaurant-style quality and variety.

Demand for dips to enhance the fresh produce snacks consumers are trying to consume more often.

"Dressings and dips are a $200 million category that last year grew at 6.5%," Anderson told SN. "In the last year in particular, growth has been driven by the introduction of superior quality, fat-free products in all three segments."

And the prospects for continued growth look, well, healthy, said Anderson, whose company, T. Marzetti, is a major player in all three segments of the category, and a pioneer in branching the category out into the busy arena of fat-free products.

He said, for example, that the fat-free chunk of the produce dressings business could approach the level of clout wielded by "lites" and fat-frees in shelf-stable grocery, that of about 40% of sales.

"I think refrigerated will come close to that over time, as long as we recognize that consumers are looking for an indulgent eating experience. We can get there, as we develop excellent quality products," he said.

"On the veggie dips, the potential is in excess of that 40%," he continued. "Indeed, it could be down the road a half-dozen years that fat-free could be 50% or more of that segment. And we are seeing very dramatic growth coming out of fat-free apple dips. I can see that as being a product that has potential for 40% to 50% of the segment sales."

T. Marzetti analyzes performance for the three segments -- dressings, vegetable and fruit dips -- effectively as a single category linked by the bond of facilitating incremental produce department sales and by the capacity, largely still unexplored, to add value to complementary produce items through cross-merchandising.

The key to the category's future, Anderson said, is that the three segments "are all consistent with overall consumer healthful eating trends. The more salads consumers eat, the more dressings they'll buy. The more they turn to vegetables and fruits for snacking, the opportunity is there. All of these are dealing with consumer trends that are not likely to fade, at least into the near future. I'd say the future looks very good."

The dressings segment will continue to get help from restaurants, which create demand for dressings of a higher quality than typical grocery fare. Not surprisingly, its market tends to be higher income households.

"As consumers become more and more exposed to new dressings in restaurants, or in cooking magazines, that will drive the dressing activity," Anderson said.

Produce dressing is the largest segment of the three, holding about a 60% share of that $200 million.

"The segment exists because we are meeting a consumer need: restaurant-quality salad dressings that you just can't get in the grocery aisles. You need refrigeration, and some consumers are willing to pay more for that," Anderson said.

"A great example is blue cheese; it accounts for 40% of sales. In recent years, as products like Caesar dressings have come into their own in restaurants, they have entered the refrigerated dressing category as well."

The product trend to watch in the produce section is fat-free vinaigrette items. Now, instead of fat-free Ranch, what we are seeing is fat-free red wine, and balsamic vinaigrette -- again, what you are experiencing in restaurants, and what tends to appeal to the more upscale consumers," he said.

The segment must maintain a balancing act between health and indulgence, however. "While we all have health concerns, the consumer of refrigerated dressings is looking first for that high quality experience and is more demanding of performance for fat-free products.

"It is creating a new standard of performance. It has got to be consistent with what consumers expect in restaurant quality, and still deliver on the fat-free promise."

T. Marzetti and its competitors in the produce dressing category track restaurant trends very closely. "Caesar passed blue cheese as the No. 1 dressing in restaurants and institutions, and we were there before that even happened."

Two major brands, category leader Marie's and No. 2 T. Marzetti, account for two-thirds of sales. "The size of the whole refrigerated produce dressing segment is about 10% of the size of the shelf-stable category," Anderson said.

Still, it continues to gain slightly every year. "Now, about 20% of households purchase refrigerated salad dressings, and these are more affluent consumers, consumers who are very concerned about freshness, with high quality expectations. As proportions of households of this nature grow within the economy, this business will grow, too."

Growth for the category segment of vegetable dips is more dramatic, but off a smaller base; the dips occupy 25% of the overall category.

"It is growing very rapidly, in excess of 30% this last year," Anderson said.

The segment got started in 1989, but Anderson has seen it take off more recently and become a year-round business, which he ascribes to a rise in healthy snacking.

T. Marzetti holds a 78% market share of the segment, while competitors Birdseye, Marie's and Lighthouse combined have a 20% share, Anderson reported.

"It also appeals to consumers with higher disposable incomes, who may snack more on vegetables and fruits than on salty snacks. These consumers also demand variety." It is one of the reasons that Anderson's company is introducing two new varieties, bacon ranch and sour cream onion, at the Produce Marketing Association convention this week.

Anderson expects there to be more opportunity for expansion in the veggie dips segment, and fat-free is the engine. "What's happened over the last year in the veggie dip category is that the new fat-free items attracted real volume growth, not sales cannibalized from the regular varieties.

"I think part of that is bringing in new consumers, who beforehand were eating the vegetables, but were more hesitant on the dips. The fat-free version gives them the license to have the dip."

The fat-free subsegment is also enabling dips to grow further into a year-round product for an increasingly "day-in-day-out" eating occasion.

"Consumers are turning to more vegetables for snacking, and by having an accompaniment, it makes it a more satisfying experience. We are taking sales from some of the less healthful snacks," Anderson said.

"We see the same thing for fruit dips. If parents can get kids to eat more apples because of a fat-free caramel apple dip enhancement, that takes the kids away from less healthful snacks.

"It is the same kind of consumer need that exists for a candy apple, but it is more convenient, less messy, more flavorful. Consumers find it a great snack and they use it for entertaining purposes, too."

Anderson said that with dressings and vegetable dips, considerable potential exists for cross-merchandising with value-added produce winners such as prepackaged salads, or precut vegetables merchandised for snacking.

"That is an opportunity that still has not been fully developed," Anderson acknowledged. "One of the things that is challenging in this regard is that these are refrigerated products, and that inhibits your ability to do massive displays. They lend themselves nicely to impulse purchases, but they need to be refrigerated, so it's a frustrating situation.

"We see some retailers experimenting with moving veggie dips around, but the most effective way to merchandise them is with precut vegetables. We will see more of that being done every year."

Fruit dips, meanwhile, are apparently less problematic for cross-merchandising because they are shelf-stable. The segment grew about 7% last year, he said. "It facilitates consumption among children and presents a healthier snack alternative for adults. There is some entertaining driving sales of fruit dips, too, but it is primarily the snacking market that it serves."

The fruit dip category also stands out since, unlike the other two segments, it is not tied to upscale lifestyles or income. "They appeal to everyone, the demographics don't tend to be as skewed to the higher incomes," he said.

"We continue to expect considerable growth from this category, especially since fat-free has only been a significant player for a year."

Marzetti has tied all three segments of the dressing/dips category to its 100th anniversary promotional campaign this year. The adherence to restaurant quality is historic for the company, starting with a restaurant in Columbus in 1896. Besides this, T. Marzetti is in the salad dressing business and other categories in the grocery aisles. In the frozens department, it competes with garlic bread and pies, and even is a category leader in caviar.