Estimated to be worth $85b in 2021, the global dips and spreads market is projected to grow at a compound annual rate of 5.43% through 2029 to $132.2b, according to Fortune Business Insights. This is on top of an “unprecedented and staggering” 12.62% growth between 2019 and 2020 when the pandemic hit, the market research firm adds in a recent report.
Much of this growth is in reaction to the pandemic – first as a salve for the tedium of stay-at-home orders immediately after the COVID-19 outbreak when man consumers sought comfort and diversity from food, and then again when the world began to reopen and consumers wanted to entertain, said Kristen Bloodgood, a sales manager with Esti Foods, which sells dozens of better-for-you dips in specialty stores and online.
“During the pandemic, people were cooking so much and we are all kind of sick of that. Now, we want to get out and do things, have girls over for wine, entertain friends. Even if it is just two people coming over, people are going all out – they are putting out a bunch of snacks and dips that they would never eat by themselves. … It is a huge trend,” Bloodgood told FoodNavigator-USA at Natural Products Expo West.
And one that Esti Foods is ready to meet from multiple angles, Bloodgood said.
“We see a lot of potential in alternative dips,” with unexpected flavor combinations or premium ingredients for a twist on beloved classics, she said. For example, the company elevates traditional spinach & artichoke dip with PDO parmesan from Italy and uses Florina peppers from Northern Greece in its Spicy Love Hummus. It also brings together flavors that consumers love, like its Everything Bagel Dip made with Greek yogurt, or uses unexpected ingredients like avocado in its Avocado Tzatizki or fava bean as an alternative to chickpea in its Lemon Fava Bean dip.
“We are even going into plant-based alternatives. A lot of our hummus is already plant-based with cheese in only two of the flavors, but we realized we had an opportunity to create a non-dairy tzatziki with all of this extra bean water that we had from making the hummus. We didn’t want to waste anything or throw it out, so we decided to use the aquafaba as the base of our plant-based tzatziki,” which complements the company’s dairy-free yogurt made with coconut cream, Bloodgood said.
Grab-and-go offers new growth potential
“There is really only one major competitor in the grab-and-go dip segment, which is Sabra, and then a bunch of little guys. So no one is flooding the market and we thought we could bring variety,” Bloodgood explained.
Esti also is “dipping” into the grab-and-go section with single-serve cartons of dip with a separate compartment of pita chips.
Esti’s dips further standout from the competition because they either “use heavy preservatives or get about a 30-day shelf life,” but because Esti uses high pressure processing it has a long shelf life and a clean ingredient deck, Bloodgood said.
“We have invested our money into our equipment to allow us to have our own HPP in Greece and in the factory we are building in New Jersey, which should be online this year,” she added.
Convenience, better-for-you ingredients and ‘heritage-inspired’ flavors drive sales
Consumer interest in global flavors, “heritage-inspired nutrition” and foods the whole family will enjoy are also driving sales of dip, said Mehek Khera, founder of Niramaya, which makes “dips for dinner.”
She explained to FoodNavigator-USA at Natural Products Expo West that she was inspired to start Niramaya last year because after a “decade long of corporate hustle, I was left with chronic disorders and inflammation and a long road to healing,” on which what she said she wanted but couldn’t find were the foods she grew up eating in Delhi.
“What I really wanted was heritage-inspired flavors that were convenient yet nutritious that I could use in my busy life. What I found instead on the shelf are more indulgent restaurant style flavors, and this complete white space for more plant-based options,” she explained.
In response she made plant-based dips with authentic flavors and which were convenient but healthy enough to have for dinner, she said.
“We are leading the growth and pushing the limits of this category by introducing creative snacking for our consumers and bringing new consumers to the ethnic aisle. And, as per a Mintel data report in 2022, new flavors and heritage-inspired nutrition and kid-friendliness are all drivers of repeat purchases,” she added.
Her message is resonating with retailers, helping her gain national distribution within five months of launch.
Recession-proofing dips, spreads
Consumer research by Mintel suggests the growth of dips won’t slow as the economy tightens even though they aren’t viewed as an essential purchase at the grocery store.
Rather, “their accessibility and ability to boost at-home eating occasions is helping the market during a time of inflation,” Mintel notes. “As consumers continue to eat at home to economize and increasingly reach for snacks, natural opportunities in the market foster a positive outlook for the future of dips and savory spreads.”
In Mintel’s US Dips and Savory Spreads Market Report 2023, researchers note category players can further drive growth with new snack pairing suggestions, which it say would encourage 23% of consumers to use dips and savory spreads more often.
Likewise, “providing recipe ideas using dips and spreads would encourage 28% of consumers to purchase more,” it adds.