Kraft suffers a second dressing down

Kraft General Foods Canada is still licking its wounds after being tossed out of the refrigerated salad dressing category last year by A&P.Now comes word Loblaws Supermarkets is doing the same thing.Toronto-based A&P, which operates 260 supermarkets in Ontario under the...

Kraft General Foods Canada is still licking its wounds after being tossed out of the refrigerated salad dressing category last year by A&P.

Now comes word Loblaws Supermarkets is doing the same thing.

Toronto-based A&P, which operates 260 supermarkets in Ontario under the A&P, Dominion Stores, Miracle Food Mart and Ultra-Mart banners, delisted the J. L. Kraft line of salad dressings in the latter half of 1992 to make way for a new house brand being marketed under its Master Choice label.

Chris Whitaker, Kraft’s category manager on salad products, says he learned recently that Loblaws, which runs a number of chains including Loblaws, No Frills and SuperCentre, is pulling the plug on J. L. Kraft to free up shelf space for a new President’s Choice refrigerated salad dressing brand.

Whitaker says the delistings are a reflection of the growing pressure supermarket house brands have been putting on traditional brands.

‘There’s no question that in many of our categories, private label brands are becoming a large and growing problem,’ he says.

Loblaws did not respond to repeated phone calls to inquire when it planned to launch the new brand.

With the departure of J. L. Kraft, the only brand name salad dressing available in a&p and in Loblaws stores from Ontario eastward will be Renee’s Dressing and Dip, made by Intercorp Foods of Toronto.

Intercorp is also the manufacturer of a&p’s Master Choice Salad Dressing.

Like most Canadian supermarket operators, a&p and Loblaws place refrigerated salad dressings in the produce section of their stores, so consumers will encounter them while shopping for salad ingredients.

But space is at a premium in the produce section, where product turnover is among the highest of any section in the supermarket.

Consequently, supermarkets are loath to give salad dressings – which require an inordinate amount of shelf space because they come in a wide range of flavors – any more room than is necessary.

Whitaker says that before its delisting troubles, J. L. Kraft held about 50% of the total refrigerated salad dressing market in Canada, adding the balance was split between Renee’s, which is available only in Ontario and Eastern Canada, and Litehouse, made by Idaho-based Litehouse and available only in Western Canada.

Canadians spend about $12 million annually on refrigerated salad dressings, which are made from fresh ingredients with few or no preservatives.

As well, they spend $90 million on shelf-stable salad dressing, a category dominated by Kraft through its Miracle Whip and Kraft labels.

For his part, Arnie Unger, vice-president of Intercorp Foods, disputes Whitaker’s interpretation of how the market is divided.

Unger claims Renee’s enjoys a larger share of the market than J. L. Kraft, and he goes on to say that market share figures reflecting J. L. Kraft’s departure from a&p show Renee’s commands as much as 75% of the total market.

Intercorp’s efforts to expand its business in the category are not limited to turf battles within the retail chains.

Earlier this year, the company retained the services of Toronto package design firm Spencer Francey Peters, which has created the first new labelling for Renee’s since the product was introduced eight years ago.

And Unger says he will begin experiments with tv advertising in June on the Maritime network ATV.