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Researcher to Discuss SFA's Today's Specialty Food Consumer Report

Specialty Food Association

The future of shopping is hybrid: shoppers are back in stores and buying online more than ever. Inflation is part of the climate, and the number of specialty food consumers continues to climb.

To best understand the data that will affect specialty food businesses in the coming year, David Lockwood, researcher behind SFA's Today's Specialty Food Consumer report, and consultant specializing in all stages of marketing and retailing consumer goods, will discuss the purchasing habits, generational, and category trends, and key insights to help businesses engage their target audience during the session “Research Spotlight: Today's Specialty Food Consumer Report,” scheduled for Tuesday, January 17, at 9 a.m. during the Winter Fancy Food Show.

SFA News Daily spoke with Lockwood about the research.

What was the most surprising insight you found while conducting research?

Readers will have heard a lot about a deceleration of grocery purchases online, partly as shoppers fully returned to stores, so they will be surprised to see that consumers greatly increased the range of specialty food bought online in the past year. Online sales of every category are up, with the highest growth found in beverages of all types, fresh sandwiches/wraps and seasoned proteins, and salty snacks. The size of online orders is still much smaller than in-store baskets, at 6.4 specialty items compared to 15 specialty items, and we expect this gap to shrink as online shopping continues trending higher.

Do you have any advice for specialty food businesses trying to use consumer report data to improve their specialty food brand?

I have a lot of advice on data because it can be your best friend or your worst enemy! Most important, look for data that you trust. It should be trended (not a single data point), the direction and magnitude of the change in trend should seem credible to you, the source should be trustworthy (maybe ask the data owner why they think it is credible), and the story that the data tells should be one that is supported through other sources. Finding data that is actionable rather than merely interesting is also important, so we made sure that the SFA Consumer 2022-23 Report is full of actionable data. Finally, being able to talk through data with an expert is helpful, and I am eager to have those conversations with you.

How do you feel inflationary pressures have changed the specialty grocery industry?

Perversely, margins for retailers were easier to hit during rising inflation due to surging revenue (we're not saying it was easy, just easier, based on results). This is going to go in reverse during 2023 as inflation declines—declining revenues will tighten margins. Makers had widely varying experiences in 2022, but on average margins took a big hit as brands tried to maintain customer loyalty by not passing along every wave of price increases that flowed through the supply chain. Generally, margins for makers should improve a bit in 2023, but as with Covid, consumer recessionary / almost recessionary behavior will drag on much of the year, which is not margin friendly.   

What do you think the next year has in store for ecommerce?

Steady expansion. In our State of the Industry report in June, we forecast that specialty food ecommerce sales would grow 18.5 percent in 2022 followed by slightly slowing growth each year to 10 percent in 2026. We saw the share of specialty food consumers who bought groceries online grow from 33 percent in January 2020 (pre-pandemic) to 66 percent in July 2022. The number of categories bought in that period soared from 4.0 to 6.4 and will continue expanding. While some delivery services have been faltering, we see relentless efforts by major retailers like Kroger, Walmart, and Amazon, as well as fast growth from Instacart and DoorDash (foodservice). Customers seem willing to live with churn among providers as they search for the most convenient, fastest, and least expensive delivery methods.

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