Sector News

Specialty food sales reach $148.7 billion

June 26, 2019
Consumer Packaged Goods

The sales of specialty food and beverages were $148.7 billion in 2018, according to The State of the Specialty Food Industry, 2019-2020 Edition from The Specialty Food Association and reported in the Summer 2019 issue of Specialty Food Magazine. That’s a 9.8% increase since 2016.

What’s selling?
The highest growth in retail sales were in refrigerated, fresh, frozen, and plant-based products. The following top 10 categories made up almost half of retail specialty food sales:

  • Cheese and plant-based cheese
  • Frozen, refrigerated meat, poultry, seafood
  • Chips, pretzels, snacks
  • Non-RTD coffee and hot cocoa
  • Bread and baked goods
  • Chocolate and other confectionery
  • Refrigerated entrées
  • Frozen desserts
  • Frozen entrées
  • Yogurt and kefir

The following top 10 categories had the highest dollar growth:

  • Refrigerated plant-based meat alternatives
  • Rice cakes
  • Frozen plant-based meat alternatives
  • Water
  • Refrigerated RTD tea and coffee
  • Shelf-stable creams and creamers
  • Refrigerated creams and creamers
  • Frozen desserts
  • Jerky and meat snacks
  • Refrigerated pasta

Who’s buying?
Millennials led the way in purchasing specialty food, with 84% buying items in 2018. However, the report notes that older Millennials (ages 35­–42) showed patterns similar to Gen X (ages 43–54). The 75% of Gen X who bought specialty food in 2018 were more likely than any other generation to buy products from a wider range of categories.

Findings about Gen X included:

  • They are more likely to impulse buy specialty foods.
  • They are more likely to buy specialty products for breakfast and dinner and as treats.
  • Although they expect to pay more for specialty items, they aren’t happy about it. More than one-third think the food is overpriced.
  • They shop a range of retailers but prioritize online and discounters.
  • They buy a lot of organic, locally sourced, plant-based, ethical, and sustainable products.

As for the up-and-coming Gen Z (ages 18–24), they went from being the biggest buyers of specialty food in 2017 (79%) to the smallest in 2018 (66%). The report states it’s too early to know if this change is a pattern. Also, other findings show Gen Z’s interests are aligned with specialty food consumers. One possible explanation for the change in purchases is that Gen Z is more financially conservative than Millennials.

Gender differences
Men were much more likely in 2018 than in the past to be either the primary food shopper for their households or to have a participating role. Characteristics of men shoppers include:

  • They favor quick-meal options and are more likely to look for convenient foods.
  • The reasons they buy specialty foods include superior quality, the foods are better for the environment, after tasting the food in a store, and for dietary or health reasons.
  • They shop in many different retail channels and are more open to buying groceries online.
  • They are more likely to buy specialty products for breakfast or lunch.
  • They yearn for guidance and information related to food and food companies.

Characteristics of women shoppers include:

  • They favor made-from-scratch meals and local/regional foods.
  • The reasons they buy specialty foods include superior or interesting/unusual tastes, flavors, or varieties compared to everyday grocery items.
  • They are willing to pay more for quality food.
  • They read nutrition/ingredient labels most of the time and are more likely to buy non-GMO products.
  • They are more likely to want to customize foodservice orders.

Seven takeaways
The Specialty Food Association offers seven main takeaways from the report:

  • Plant-based is a strong trend, with a 24% increase in the retail market for plant-based specialty products from 2016 to 2018.
  • The market for specialty beverages is increasing. Beverage sales grew faster than food sales from 2016 to 2018.
  • Younger consumers are less likely to buy quick meals at supermarkets. The report calls this a potentially worrisome trend for supermarket restaurants/cafes/delis/fresh food sections.
  • Consumers want both reduced packaging and less food waste.
  • Convenience stores are an under-used market for specialty food.
  • Foodservice needs to offer more customization options.
  • Breakfast is a growing opportunity for specialty foods.

By Carol Wiley

Source: Food Industry Executive

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