How salad dressing explains the economy

This morning's Wall Street Journal contains a telling indicator of the state of inequality in America: The salad dressing market. Low-income consumers are switching to private-label brands to save money. But at the same time, fresh and organic premium dressings are also growing at two to three times the rate of regular dressings. Middle class brands, like those marketed by Kraft Foods and the giant Unilever, are feeling the squeeze.

The differing growth "shows the bifurcation of the consumer that we are seeing overall in the food space," said Thilo Wrede, an analyst at Jefferies. "The middle guys are getting squeezed. If they can't compete with the [store brands] on price, they need to do something else," like being more innovative with flavors.

Hidden Valley, for example, is marketing a thicker, creamier version of its classic Ranch dressing as an all-purpose dip, like ketchup, and Wish-Bone has come out with unique flavors like a buffalo ranch.

The overall market for sauces, dressings, and condiments grew through the recession as people tried to save money by cooking decent meals at home, according to Euromonitor. It's started to flatten out as unemployment sinks, though. Meanwhile, immigrants are making their presence felt: Tabasco and Sriracha are wildly popular, while hummus is dominating the dips category.

UPDATE: Bonus charts! The changing makeup of our condiment choices.

Data source: Euromonitor
Data source: Euromonitor

Lydia DePillis is a reporter focusing on labor, business, and housing. She previously worked at The New Republic and the Washington City Paper. She's from Seattle.
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