Advertise with Specialty Food Media Today >>>


Date: 04/01/12 | Source: Specialty Food Magazine
Categories: Trends and Statistics; Market Trends; Industry Stats | Tags: Research
LinkedIn Comment Print


As part of each annual “State of the Specialty Food Industry” report, Mintel International conducts interviews with members of the supply chain for a firsthand look at their challenges and opportunities. Here is a sample of what manufacturers, importers, distributors, brokers and retailers had to say, in their own words, about the specialty food industry in 2012.

The Voice of the Manufacturer

What is the biggest threat to your business?

    • “A large company has knocked off our idea and started mass producing for less cost.”
    • “Competition and costs to get product into supermarkets, i.e. shelving fees.”
    • “Higher freight, rise in food cost, and the quality of food coming in from suppliers.”
    • “Losing distribution as large multi-national companies have the ability and deep pockets to buy their way into accounts.”
    • “My business is only two years old, I have had great acceptance into the market place and need to keep the upward momentum going. Careful planning on my part is crucial to have the working capital for new product.”
    • “The big CPGs getting into the gluten-free arena and producing similar product for a lot less.”

How have rising food prices and/or currency fluctuations/the economy affected your business? 

    • “Decreased sales due to the nature of the product being one that cannot tolerate decreased discretionary income.”
    • “Difficult to compete with larger brands where they can absorb price increases.”
    • “Have had to absorb the higher costs.”
    • “We have passed cost increases along. Sales continue at double-digit growth as we have a very targeted audience that is brand loyal and they are not as price sensitive as some user groups.”
    • “We have had to reduce portion size so we can hold pricing level.”
    • “Our cost of raw materials has increased 22 percent and we do not feel that we can pass the increased cost to our customers.”

What is your biggest gripe about the specialty food industry?

    • “A lot of retailers don't want product if it is available at another retailer, even when pricing is competitive.”
    • “Being knocked off – copied.”
    • “Brokers and distributors and their approach to small companies.”
    • “Distributors who were once easy to work with seeking profits through programs to extract dollars from the manufacturer.”
    • “Many large retailers are demanding a guaranteed sell-through, which means that they want the manufacturer to guarantee their profits and sales. That is not our responsibility.”
    • “We sell and market in a category that has a very broad spectrum of quality—from junk to premium. Many retailers do not know the difference.”
    • “Everyone talks quality, but only a few walk quality.”

The Voice of the Importer

Which countries/regions are sources for you in 2012? What types of products?

    • “Europe, U.K., France, Germany, Holland, Turkey, Hungary.”
    • “South Pacific and the Far East. Rice pastas, authentic Asian sauces, ginger beverages.”
    • “Switzerland, Germany, Poland. Chocolate.”

How have rising food prices and/or currency fluctuations/the economy affected your business?

    • “The Euro has declined; better for margins. Rising container costs are problematic but we have kept most prices stable.”
    • “Margins have decreased. We have not been able to pass all the increases of cost of goods to our customers.”
    • “Rising costs are putting us out of business.”
    • “Value of dollar versus the Euro is challenging. Very difficult to pass on higher costs to customers.”

How has the movement toward local products affected your business?

    • It has not affected us. Specialty food consumers still enjoy imported items to add diversity to local and domestic products.”
    • “We are having more of our products made in the USA this year.”

What is your biggest gripe about the specialty food industry?

    • “Buyers not getting back to you, requesting samples and additional info and still not getting or giving any feedback.”
    • “Free fills and all of the marketing dollars and requirements of the big retailers and distributors.”
    • “The large supermarket specialty food distributors have lost control. The retailers are pushing all costs to the distributors and the distributors in turn are pushing all cost to the vendors. The result is inefficient distribution and higher prices to the consumer.”
    • “Too many snack and ready-to-eat processed foods. Specialty food should stay on a mission and represent real foods.”
    • “We're too busy to gripe about anything but lack of time.”

The Voice of the Distributor

What is the biggest threat to your business?

    • “Bigger distributors who can undercut our pricing.”
    • “Higher raw material costs.”
    • “Manufacturers selling directly to retailers.”
    • “We are undercut more and more by competing companies for the same lines. It used to matter that we were an honest, loyal and trustworthy company. It's no longer about the relationship but who has the deepest pockets.”

How have rising food prices and/or currency fluctuations/the economy affected your business?

    • “Dollar store items are on the rise.”
    • “Freight rates have been an obstacle for us lately as has the value of the dollar in importing seasonal goods.”
    • “Huge pressure on margins due to rising food costs. Not able to pass them on to retailers.”
    • Most of my current customers are flat. Opening new accounts is the only way to grow in this economy.”

What is your biggest gripe about the specialty food industry?

    • “It is the way vendors abuse brokers, constantly changing the rules, always in their own favor. Brokering specialty foods is a very unstable career.”
    • “It is getting more and more difficult to get listings in stores like Whole Foods. Conglomerates like Nestle or Kraft are entering into our industry.”
    • “Not being able to personally reach all specialty retailers.”
    • “Probably the transition of good brands into the mass markets. Our smaller specialty customers just cannot compete with their pricing and sometimes seemingly lose faith in us as their distributor for not giving them a competitive cost.”

The Voice of the Broker

What is the biggest threat to your business?

    • “Consolidation of brands and direct marketing from manufacturer to retailer.”
    • “Continued change to non-service contracts between distributors and retailers.”
    • “Customs holding up containers for no apparent reason except to increase storage costs.”
    • “Manufacturers who do not understand what we do and are not honest about what they do.”
    • “Preferred Broker Programs like Delhaize is trying to do. They want retailer-chosen brokers, not manufacturer-chosen brokers.”

How have rising food prices and/or currency fluctuations/the economy affected your business?

    • “Food prices have had a negative impact on sales in higher-end specialty products.”
    • “Helped. Rising food prices makes premium products look less pricey compared with mainstream.”
    • “Pricing has stabilized at this point, so trend should be back to organics and specialty items.”
    • “Probably the biggest change is the number of store closings vs. openings. Prior to 2008, we used to see more store openings than closings. That trend has significantly changed over the past three years.”
    • “Retailers are reluctant to accept cost adjustments and will trade down in quality for pennies.”
    • “Selling more EDLP programs.”

What is your biggest gripe about the specialty food industry?

    • “Demands for placement allowances. Demands to participate in programming that benefits the retailers’ bottom line. Deduction issues with limited back up. Distributors not focused on selling goods. The fact that we now work out well beyond a year.”
    • “Distributor reps are worthless. Very few return the support given them by the brokers. They are order takers. They do not follow up on opportunities.”
    • “The specialty food trade has become stagnant. Very few new, innovative products are being brought forward and things seem to be more peat and repeat when you walk the shows.”
    • “Poor quality items making claims that they are gourmet because they have a nice package.”

The Voice of the Retailer

What is the biggest challenge to you as a specialty food retailer?

    • “Big box stores offering similar items for better pricing; educating consumers to appreciate and purchase fine foods.”
    • “Continuing to provide customers with unique and interesting products.”
    • “Finding high quality items at an affordable cost which equates to a more approachable retail.”
    • “Keeping selection/assortment up-to-date, fresh and of superior quality without sacrificing too much margin.”
    • “Keeping the customer turned on and entertained on a daily basis.”
    • “We do not have enough space (and very little room to grow) to carry all the items we'd like and that our customers ask for.”
    • “We live in a tourist town. When there are no people, there's no money.”
    • “Big box stores mimicking fine products and taking market share.”
    • “Declining traffic due to weather. We are in the mountains and have not had the snowfall that brings skiers up to the area.”
    • “Having my competition, chain stores, being given one price and my store another.”
    • People love our bakery because it reminds them of their childhood. Yet we are fading fast as the big stores are pushing little bakeries like us out because of prices. There won't be speciality bakeries around someday.”

What do you see as the emerging trends in specialty foods?

    • “I feel with the newer generations of consumers being so internet driven, the online buying of specialty foods will go up drastically.”
    • “Charcuterie, hand-made, small batch.”
    • “Cheese, specialty groceries.”
    • “Cocoa, tea, anything umami flavored.”
    • “More cultural diverse products. i.e., South America.”
    • “Local region; specific small production; healthy.”
    • “Single origin chocolates, farm to bar marketing, incorporation of ethnic flavors into mainstream cuisine.”
    • “Smaller portion packaging. Introduction of more international foods which are not currently dominant in the market.”
    • “Unfortunately, too many private labels. We focus on the back story of the person or family who manufactures our products and that's a selling point to our customers.”

What strategies do you use to get customers to come to your store rather than buying specialty food through supermarkets and other mass merchants?

    • “Active tasting and knowledgeable and friendly staff to provide a memorable experience at every visit.”
    • “Customer service is our number one strength. Also, trying new items regularly and listening to customers’ wants and needs.”
    • “Personal service and interaction with the customer. We are in a resort area but many customers are repeat and it is important that all are treated as old friends. We offer sampling, menu suggestions, wine pairing advice and try to help the customer enjoy the shopping portion of their vacation.”
    • “Free tasting. It costs us a lot, but we offer tastes of everything on our shelves every single day. Plus our expertise in using the products in cooking, entertaining and gifting.”
    • “I talk with my customers!”
    • “In-store-only discounts. Wide variety. Having products that are not easily found in supermarkets and mass merchants.”
    • “Using social media to advertise products. Hosting tastings and promoting customer loyalty.”
    • “We celebrate food and create an experience.”
    • “We have a 36-year following and stay busy regardless of the economy. We do lots of local advertisements, constant sampling and guard our reputation and quality of service and product. The big stores can't compare with service and home-cooked product.”

Add a comment:

Please Login (or Sign Up) to leave a comment

More Articles in Trends and Statistics


As part of each annual “State of the Specialty Food Industry” report, Mintel International conducts interviews with members of the supply chain for a firsthand look at their challenges and opportunities.

Separate multiple email addresses with commas

search articles

Read the Digital Edition

Read the Current Issue of
Specialty Food Magazine

featured product

Tofu Making Kit
by Roaring Brook Dairy

Request Information
View More Products

featured producer

Paula Lambert

My Story. My Ad.

Click here for more info>>>

Online Product Gallery