Hot Sauce Study. Research Summary and Observations National Perceptual Study. June 2007

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1 Corporate Woods Indian Creek Parkway, Suite 220 Overland Park, KS (913)

2 About This Report The purpose of this report is to provide a high-level overview of selected results from the Hot Sauce. The Detailed Findings section provides a wealth of additional information that warrants close review and evaluation above and beyond the scope of the Observations and Summary of Findings sections. Contents The report is organized into four sections: Objectives.3 Primary goals of this study Observations 4 Strategic observations and recommendations by the Analyst Summary of Findings 6 Key points for presentation and/or group discussion Detailed Findings..8 Highlights of responses by question 2008 Persuadable Research Corporation. All rights reserved.

3 Objectives Primary goals of this study Determine each of the following Current usage of hot sauce by a nationwide sample of the U.S. population. Influences on the choice of hot sauce brand. Hot sauce brand preference. Willingness to try additional hot sauce brands. Awareness of advertising for hot sauce brands Persuadable Research Corporation. All rights reserved. 3

4 Observations Strategic observations and recommendations by the Analyst Usage of Hot Sauce Use of hot sauce is widespread but not universal. Use increases with age. With two-thirds of respondents indicating they use hot sauce, it is reasonable to assume that the greatest opportunity for brand growth is to capture market share from other brands. Manufacturers can expect to grow their brands by lesser degree through promoting use among the third of respondents who do not use hot sauce. As respondents age, their taste matures, and with it the interest in hot sauce. Hot sauce use peaks among respondents ages However, brand preference may be formed years earlier. Marketers need to educate consumers about their brand early, and reinforce it as the years advance. Influences on Brand Preference 52% of respondents have a favorite brand of hot sauce. This is a high percentage, but suggests a great many respondents are willing to use more than one brand. Flavor is the leading reason for brand preference, not level of hotness. A preferred brand is not necessarily the only brand used by the majority of respondents. There is a high degree if willingness to use or try other brands. Hotness plays a role in brand preference, but flavor is more important. Marketers need to concentrate on how the hot sauce enhances the dining experience, not hotness. Promotion on cooking shows, magazine recipe features and the like that focus on flavor enhancement can be effective. Brand Preference The leading brand, Tabasco, is preferred by 29% of respondents. The market is populated with a wide variety of national and local brands, preventing the leader from capturing a larger share. A large number of respondents develop a brand preference during childhood. There is a high degree of satisfaction with whatever brand respondents already use or prefer. Use of a brand in the childhood home has a major influence on brand preference later in life Persuadable Research Corporation. All rights reserved. 4

5 Respondents are just as likely to be persuaded to try an established brand as a new product introduction. There appears to be room in the marketplace for a large number of brands. Willingness to Try Additional Brands Willingness to try other hot sauce brands is tied directly to availability. Free samples are particularly effective at promoting sampling. Based on the Analyst s research experience in consumer packaged goods, brand loyalty for hot sauce is comparably strong to other food types. While many respondents have a preferred brand, few express any reason not to be open to a new experience. Promotion of free or discounted sampling in all venues is highly recommended. Awareness of Advertising for Hot Sauce Brands Awareness of hot sauce brands is currently built through print advertising, but seldom in electronic media. The majority of respondents indicate that print advertising has little influence on their brand preference. Promotion of hot sauce brands is modest compared to other food brands. The majority of respondents experience hot sauce promotion only through standard retail grocery promotion. Due to relatively small amount of exposure to hot sauce advertising among respondents, it may be possible for a brand to capture a large share of voice with a wellcoordinated multi-media campaign. Due to the importance of flavor in the decision to use a particular brand, any multimedia campaign should include free or discounted sampling to amplify its effectiveness Persuadable Research Corporation. All rights reserved. 5

6 Summary of Findings Key points for presentation and/or group discussion Usage of Hot Sauce Use of hot sauce is widespread but not universal. Use increases with age. More than two-thirds of all respondents use hot sauce. Use of hot sauce varies very little by gender. Among the 32% of respondents who do not use hot sauce, the most frequent reasons for not using hot sauce are dislike of the taste or inability to handle spicy foods. Among respondents who use hot sauce, 75% experiment with hot sauce when cooking or preparing food, and 60% use hot sauce in dips. Influences on Brand Preference 52% of respondents have a favorite brand of hot sauce. This is a high percentage, but suggests that many respondents are willing to use more than one brand. Flavor is the leading reason for brand preference, not level of hotness. Based on a summary of the top two boxes, important and very important, the vast majority of respondents, 98%, indicate flavor is the primary reason for choice of brand. 71% pay attention to specific types of hot sauce offered in restaurants. 86% will use the hot sauce available in a restaurant if their favorite brand is not offered. Just over half of respondents, 52%, have a favorite brand of hot sauce. Brand Preference The leading brand, Tabasco, is preferred by 29% of respondents. The market is populated with a wide variety of national and local brands, preventing the leader from capturing a larger share. A large number of respondents develop a brand preference during childhood. The great majority of respondents, 80%, indicate flavor is the reason for making their brand choice a favorite. The largest percentage of respondents, 37%, discovered their favorite brand in the home, using it since childhood. The majority, 71%, would try another brand. On a scale of 1-10, the majority of respondents prefer a heat level of Persuadable Research Corporation. All rights reserved. 6

7 Based on a summary of the top two boxes, moderately hot and extremely hot, 79% of respondents believe Tabasco Sauce to be the hottest. Known by 84% of respondents, Tabasco Sauce is by far the most familiar brand. The only other brand known by half or more of respondents is Louisiana Hot Sauce. Texas Pete is recognized by 31% of respondents. Willingness to Try Additional Brands Willingness to try other hot sauce brands is tied directly to availability. Free samples are particularly effective at promoting sampling. Based on a summary of the top two boxes, influential and highly influential, 66% of respondents indicate the greatest influence on choosing or trying a new brand is getting a free sample. Awareness of Advertising for Hot Sauce Brands Awareness of hot sauce is currently built through retail print advertising. However, the majority of respondents indicate that print advertising has little influence on their brand preference. The majority of respondents are not aware of advertising for hot sauce. Among those who do recall advertising for hot sauce, the largest percentage, 31%, recall print ads. The majority of respondents, 77%, indicate they are not influenced to try a brand after seeing an ad. Females are slightly more receptive to advertising for hot sauce Persuadable Research Corporation. All rights reserved. 7

8 Detailed Findings Highlights of responses by question Respondent Profile Q.2 What state do you live in? 303 total respondents in 36 states. Highest representation in Florida (8%), Texas (8%), and California (7%) Persuadable Research Corporation. All rights reserved. 8

9 Q.3 In which of the following ranges does your age fall? The highest percentage, 37%, falls in the range. Hot Sauce Study Q.4 Please indicate your gender. More than two-thirds of respondents are female. Male 29% Female 71% 2008 Persuadable Research Corporation. All rights reserved. 9

10 Q.30 What is your marital status? The majority of respondents, 59%, are married. Those with brand preference are slightly more likely to be married. Q.31 Which of the following best represents your pre tax household income? The majority of respondents have pre tax household income between $30,000 and $100, Persuadable Research Corporation. All rights reserved. 10

11 Q.32 What is the highest level of education you completed? The majority of respondents have some college or a 2 year degree. Q.33 Which of the following best describes your ethnic background? The majority of respondents are White/Caucasian Persuadable Research Corporation. All rights reserved. 11

12 Hot Sauce Usage Q.5 Do you use Hot Sauce? More than two-thirds of all respondents use hot sauce. Yes 68% No 32% Use of hot sauce correlates directly with age, peaking between ages Use of hot sauce is more limited among those ages Use of hot sauce varies very little by gender Persuadable Research Corporation. All rights reserved. 12

13 Q.6 Please tell us the reason for not using Hot Sauce. Among the 32% of respondents who do not use hot sauce, the most frequent reasons for not using hot sauce are dislike of the taste or inability to handle spicy foods. Q.7 On what type of food do you use Hot Sauce? The greatest percentage, 60%, uses hot sauce in dips. More than half use hot sauce in BBQ and other recipes. Respondents with a brand preference are slightly more likely to use it on all foods Persuadable Research Corporation. All rights reserved. 13

15 Respondents with a brand preference are somewhat more likely to use hot sauce on all types of foods. Q.8 Other - Verbatims The most frequent other use of hot sauce is on eggs, chicken, and chili Persuadable Research Corporation. All rights reserved. 15

16 Influences on Preference of Hot Sauce Brand Q.9 How important are the following when choosing a Hot Sauce? Based on a summary of the top two boxes, important and very important, the great majority of respondents, 98%, indicate flavor is the primary reason for choice of brand. Flavor is more important to those with a brand preference. Also of high relative importance are heat level, 84%, and convenience of use, 74%. The least influential factor is packaging, 13%. Q.10 Do you experiment with Hot Sauce when cooking or preparing food (e.g. adding it to a recipe)? Three-quarters experiment with hot sauce when cooking or preparing food. Yes 75% No 25% Females are slightly more likely to experiment than are males. The willingness to experiment is higher among those with a brand preference. After age 24, the willingness to experiment remains about the same Persuadable Research Corporation. All rights reserved. 16

17 Q.11 Do you pay attention to the specific types of Hot Sauces offered in restaurants? The great majority pay attention to specific types of hot sauce offered in restaurants. Yes 71% No 29% There is virtually no difference between males and females in the attention paid to the specific types of hot sauce offered in restaurants. Those with a brand preference are somewhat more likely to pay attention to the specific types of hot sauce offered in restaurants. Q.12 If a restaurant does not offer your favorite brand of Hot Sauce, will you use the kind they offer? The great majority of respondents will use the hot sauce available in a restaurant if their favorite brand is not offered. Yes 87% No 13% There is no virtually no difference between males and females in the willingness to use other brands offered by restaurants. Most likely to use other brands are respondents ages 18-24, least likely are respondents age 64+. Q.13 Do you have a preferred brand of Hot Sauce? About half of respondents have a favorite brand of hot sauce. Yes 52% No 48% Males are somewhat more likely to have a preferred brand. Most likely to have a preferred brand are respondents age 64+. Hot Sauce Brand Preference Q.14 Which of the following is your favorite brand? The most popular brand of hot sauce is Tabasco Sauce, preferred by 29%. Frank s RedHot also has a high degree of popularity, preferred by 22%. Males prefer Tabasco Sauce to Frank s Red Hot by a ratio of 2 to Persuadable Research Corporation. All rights reserved. 17

19 Q.16 What makes it your favorite brand? The great majority of respondents, 80%, indicate flavor is the reason for making their brand choice a favorite. Flavor is equally important among respondents at all ages. About half, 49%, indicate they have tried other brands and prefer their choice. Cost is only a moderately influential factor among respondents at all ages. Q.17 Other verbatim summary Only three respondents volunteered other reasons. These were the heat, not too hot, and uniqueness Persuadable Research Corporation. All rights reserved. 19

20 Q.18 How did you discover your favorite brand? The largest percentage of respondents, 37%, discovered their favorite brand in the home and have used it since childhood. 31% of respondents discovered their favorite sauce through recommendation of a friend or family member. Females are much more likely to have learned about their brand through referral from a friend or family member Persuadable Research Corporation. All rights reserved. 20

21 Q.19 Other verbatim summary Eleven respondents volunteered other points of discovery. Eight of these indicate they first saw it in a store. Q.20 Would you try a Hot Sauce other than your favorite brand? The great majority, 71%, would try another brand. There is little difference, if any, between the willingness of males and females to try another brand. Q.21 Please slide the scale below to indicate your preference of heat level for Hot Sauce? On a scale of 1-10, the majority of respondents prefer a heat level of 5-7. Males are more likely to prefer their sauce very hot than are females. Those preferring low heat level are more likely to have a specific brand preference Persuadable Research Corporation. All rights reserved. 21

22 Q.23 Please indicate the heat level for each of the following brands of Hot Sauce. Based on a summary of the top two boxes, moderately hot and extremely hot, 79% of respondents believe Tabasco Sauce to be the hottest. Also perceived to be moderately hot or extremely hot by a majority of respondents are Tabasco Habanero, 70%, and Louisiana Hot Sauce, 60%. The brand perceived to be moderately hot or extremely hot by the least number of respondents, 28%, was Crystal Hot Sauce. Perceived Heat Level of Hot Sauce Brands 90% 80% 70% 60% 50% 40% 30% 44% 60% 28% 41% 79% 70% 45% 20% 10% 0% Frank's RedHot Louisiana Hot Sauce Crystal Hot Sauce Texas Pete Tabasco sauce Tabasco Habanero Frank's Xtra Hot 2008 Persuadable Research Corporation. All rights reserved. 22

23 Q.24 Which of the following brands of Hot Sauce are you familiar with? Known by 84% of respondents, Tabasco Sauce is by far the most familiar brand. The only other brand known by half or more of respondents, 57%, is Louisiana Hot Sauce. Texas Pete is recognized by 31% of respondents. There is little difference in the degree of familiarity with brands based on gender. Those with a specific brand preference are somewhat more likely to be familiar with the other brands Persuadable Research Corporation. All rights reserved. 23

24 Willingness to Try Additional Hot Sauce Brands Q.25 Select the level of influence the following would have on trying out a new Hot Sauce? Based on a summary of the top two boxes, influential and highly influential, 66% of respondents indicate the greatest influence on brand choice is getting a free sample. Also highly influential is word of mouth, 56%. The least influential factor is mention by a celebrity chef on TV, 12%. Importance of Factors Influencing Trial Use Attractive bottle/ packaging 17% Getting a free sample 66% Word of mouth 56% Getting a coupon/ offer 38% Watching an advertisement 14% FindingŹ it in your favorite restaurant 29% A celebrity chef mentioning it on a T.V. show 12% 0% 10% 20% 30% 40% 50% 60% 70% Awareness of Advertising for Hot Sauce Brands Q.26 When was the last time you came across an advertisement for Hot Sauce? The majority of respondents are not aware of advertising for hot sauce Persuadable Research Corporation. All rights reserved. 24

25 Q.27 Where did you find the advertisement for Hot Sauce? Among those who do recall advertising for hot sauce, the largest percentage, 32%, recall print ads. 28% cannot recall any advertising. Q.28 How likely were you to try the Hot Sauce as a result of the advertisement? The great majority of respondents, 77%, indicate they are not influenced to try a brand after seeing an ad Persuadable Research Corporation. All rights reserved. 25

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