Gourmet Business Fine Foods Quarterly April 2014

I am continually amazed to find more and more specialty brands on the shelves of my local supermarket. The shelf space seems to be multiplying, and the brands that are filling it are not the household names that have been around for decades either. The specialty food industry must be growing by leaps and bounds.

It just so happens that the Specialty Food Association has released its 2014 State of the Industry Report that was prepared in conjunction with Mintel and SPINS, and it states the “sales of specialty food and beverages reached $88.3 billion in 2013, a record high for the fourth year in a row.” And even in what many consider to be a troubled economy, sales have jumped 18.4 percent since 2011. So there is reason for suppliers to be positive! In fact, the report indicates that “8 in 10 specialty food manufacturers posted positive sales gains in 2013.”

Is the perceived increase in specialty food shelf space in the supermarket an indication that the smaller specialty stores are losing share to bigger competitors? If you dig a little deeper into the statistics, you will find that specialty food stores are holding their own in many of the food categories. The report shows that unit sales of specialty food from 2011 to 2013 in supermarkets is actually down -0.8 percent while it has grown 23.2 percent in natural food stores and 21.1 percent in specialty food stores (which translated to a sales increase of 42.4 percent for specialty food and 33.8 percent for natural). Way to go, specialty retail!

There is no question that certain product categories are going to sell more in grocery than in specialty retail. Can you guess which specialty food categories the specialty retail stores are showing the greatest market share in? The No. 1 category is refrigerated salsas and dips, with close to 50 percent of all sales being made at the specialty store. Even more interesting is that tea is a close second, with 40 percent of the sales still being made at the specialty store (which happens to be the reason why we introduced our publication Quench to cover the tea business).

In terms of overall sales, cheese and cheese alternatives have claimed the top spot, with $3.99 billion in sales (all the more reason to read Gourmet Busi- ness Fine Cheese & Charcuterie). To put it in perspective, that is almost double the amount of frozen and refrigerated meats, poultry and seafood combined sold during the same period! Wow!

I encourage you all to read this report since I think it will reveal some surprising and interesting facts that may help you refine your strategy.

David Spencer
Publisher, Gourmet Business 

President, HousewaresDirect, Inc. 

dspencer@gourmetbusiness.com