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Top Stories for 9/16/14
The industry is booming, but some retailers may not be harnessing the full potential of specialty foods.
By Nicole Potenza Denis
There’s little doubt these days that specialty foods have the ability to contribute to a boost in retail margin while building shopper loyalty. From their higher ring to their attractive ingredient and nutrition panels that consumers increasingly scrutinize, the addition of specialty foods on store shelves can be a game changer.
From 2011 to 2013, sales of premium products increased 18 percent, and shoppers of specialty foods climbed 25 percent, according to the Specialty Food Association’s "State of the Industry" report, released earlier this year.
That said, for many retailers the value is difficult to see amid the risk, and fall short of the category’s true potential. Poor category management can drive buyers to stick to mainstay success and limit new product introductions. The shrinking of the center store minimizes shelf space for specialty products. These and other practices leave specialty foods to validate their importance and fight for entry.
Tech startup Shipstr wants to bring international freight shipping to the 21st century. Shipping goods from one country to another involves numerous service providers, including container ships, warehouses, customs brokers, and trucking firms, founder Max Lock explains. Most companies, especially small- to medium-size ones, rely on freight brokers to handle arrangements. Shipstr plans to cut out the middleman with the goal of improving service and boosting small companies' bottom line.
Focusing on logistics and streamlining processes, Shipstr aggregates information from different service providers onto one platform, working directly with third-party services, including trucking companies, customs brokers, warehouses, and ocean carriers to get information on their pricing and fees. This allows businesses to make their own shipping arrangements without the aid of a freight broker, get instant price quotes, and track their shipments more quickly. The startup will launch its service with imports from Ningbo, China to Los Angeles, a route more than 19,000 SMBs currently use, reports TechCrunch. Full Story
A new source from the ocean may help satisfy consumers' taste for seafood. As traditional fish supplies—such as Jack mackerel, bluefin tuna and Atlantic cod—decline, abundant jellyfish may be able to fill the void. National Marine Fisheries Service Data reports that 2,152 tons of cannonball jellyfish were harvested in 2011, worth $301,000, but that data paints an incomplete picture—confidential data from individual states would bring those numbers up dramatically. In fact, jellyfish are so plentiful the Georgia Department of Natural Resources doesn't have a clear count of how many there are.
While, currently, the invertebrates are mainly shipped to Asia, where jellyfish are commonly dried and served in salad, some entrepreneurial suppliers are trying to introduce the product to the American consumers. The slimy food bears similarity to oysters, reports Modern Farmer. Full Story
Uganda's coffee output may see a boost of up to 3 percent, thanks to a beneficial season of rainy weather. Exports may reach 3.6 million 60-kilogram bags this season. The National Union of Coffee Agribusiness and Farm Enterprises expects prices to benefit farmers. The country experienced a drought between January and March, which, while not affecting overall output, is raising concerns about quality. Uganda, which farms mostly robusta coffee, is the largest coffee exporter in Africa. Harvest in East and Central Uganda, where 55 percent of the beans are produced, is expected to begin later this year. Uganda's Agricultural Ministry launched a campaign 20 years ago to plant 200 million trees by next year. At least 150 million have been planted to date, reports BBC. Full Story
Kombucha is growing in popularity on the Big Island and beyond as consumers look for drinks that are functional as well as flavorful. Hawaii Kombucha brewery in Kealakekua makes it by the keg, and brewer Michael McCagh is confident the fermented drink could be a $500 million industry globally next year. The batches he brews change depending on the season, with all the fruits from local producers on the island, including Ka'u orange, mango, and hibiscus.
The beverage's growing popularity bodes well for these producers, who are ramping up to meet demand. McCagh has plans to expand, adding another fermenter at his production facility. Big Island Booch in Hilo has also increased manufacturing, up to 900 gallons from its beginnings brewing 15-gallon batches for farmers markets. Co-owner Kela Cosgrave says they are now available in 30 locations on the island, reports West Hawaii Today. Full Story
North Carolina is continuing to see explosive growth among the 100 breweries and brewpubs in its craft beer sector, as are South Carolina's 20 businesses. Producers in both states are spending millions on expansions and additional staff. South Carolina had just seven breweries in 2012; 15 more are in the planning stages. Established companies are also experiencing massive expansion, with New Belgium opening an East Coast brewery in Asheville, N.C., for $175 million. Smaller breweries are growing as well, with Green Man planning a $4 million expansion that will include a 17,000-square-foot packaging building with a rooftop beer garden, reports The State. Full Story
Natural-soda manufacturer Reed's, Inc., is expanding its Los Angeles plant, spending $1.5 million to replace equipment and tripling production to continue its double-digit growth. The move also comes in the wake of a new national advertising campaign that is expected to further boost sales. The company expects the project to save $1 million annually in overhead and labor costs.
Equipment purchase for the expansion is 40 percent complete. With its bank line expiring this November, Reed's has received numerous proposals from leading banks that would cut interest expenses by at least 50 percent. Each proposal includes an equipment purchase equity line. Reed hopes to complete the project by spring 2015. News Release
Smithfield Specialty Foods Group has signed a two-year licensing agreement with A&E for a line of nut-based snacks co-branded with the reality series "Duck Dynasty." The product line, introduced on Sept. 2 nationwide, initially offers five varieties of flavored peanuts: lightly salted, salt and pepper, cajun, habanero, and jalapeño. Kate Winn, senior vice president of consumer products at A+E Networks, says the partnership makes perfect sense.
"In the case of Smithfield, their consumers are passionate 'Duck' fans so we know that their products will really resonate.” Smithfield Marketplace and A&E's Duck Dynasty also plan to expand the product line in time for holidays with co-branded pork rinds, nut confections, peanut brittle, and snack mixes.
Goya Foods will open a 15,000-square-foot distribution center in McDonough, Ga. The customized building was designed to maximize energy efficiency and has space for a 50,000-square-foot expansion. The building will be the company's main distribution center for the entirety of Georgia, as well as parts of South Carolina, Alabama, and Tennessee. The goal of the new center is to expand Goya's business in the Southeast, distributing a greater variety of products and reaching new sectors in the region. The facility will officially open Sept. 17, and Goya will donate 1,000 pounds of food to St. Vincent de Paul Food Pantry to mark the occasion.
Goya Foods, Inc., is America's largest Hispanic-owned food company, manufacturing, packaging, and distributing more than 2,000 products from the Caribbean, Mexico, and Central and South America.