Summer Fancy Food Show 2011

Specialty Food Industry Outlook Still Looks Bright

The outlook for the Specialty Food Industry is still bright despite a challenged economy in our country. I did initially fear that consumers would respond to their economic fears by cutting out spending on products that seemed to be a nicety instead of a necessity. But, fortunately, food spending was not one of them. Instead, consumers seemed to become more interested in their home, and improving their quality of life and health for their family.

This one common theme can be attributed to the growth that has been experienced in many areas of the Specialty Food Industry. Health has emerged as a major influence on eating habits and has spurred significant growth. Inc. magazine recently identified gourmet snacks as one of their 2011 best industries for starting a new business due to their strong growth. Organic snack foods accounted for 5 percent of organic foods sales in 2009, according to the Organic Trade Association, and sales are predicted to continue to show strong growth due to the Healthy, Hunger-Free Kids Act and Michelle Obama's campaign against obesity. Sageworks has also reported that sales growth for specialty food stores has increased from 1.53 percent in 2009 to 5.92 percent in 2010. I expect that consumers’ growing interest in healthy eating will drive demand for many specialty food products (see our story in the June issue of Gourmet Business on the Mediterranean influence on our society for another example).

I predict another area of continued growth in the Specialty Food Industry will be spices, condiments and sauces that can help a consumer create an extraordinary meal with minimal preparation. According to market research publisher Packaged Facts, the dollar sales of center-plate proteins has steadily risen from 2006 to 2010, and will continue to grow as more Americans cook at home instead of eating out. As a result, many products that are effectively marketed to transform these staple proteins into a healthy and tasty meal will experience a steady rise in demand too.

Another positive trend lending to the sales growth of specialty foods is the gifting market. Packaged Facts reported that the total market for food gift-giving has grown 9 percent from 2007 to 2009 while the overall dollar spending on gifts has only risen 7 percent in the same period. Gift baskets have become an important merchandising vehicle to encourage the sales of specialty food by taking the mystery out of choosing a group of food items that will be a unique and personal gift. We are encouraging gift retailers to pay closer attention to the gifting potential of specialty food, and will help spotlight some prime examples in the Gourmet Business exhibit at the New York International Gift Fair/Gourmet Housewares Show this August themed “The Gourmet Gift.”

Armed with an understanding of the factors driving growth in the Specialty Food Industry, and a host of great new products featured in this Summer Fancy Food Show Briefing, we hope that we have inspired you to position your retail store to achieve positive growth too.