The specialty food industry continues its strong growth with dollar sales hitting $127 billion, a 15 percent jump in total sales between 2014 and 2016, according to the “State of the Specialty Food Industry,” an annual report just released by the Specialty Food Association and market researcher Mintel and SPINS/IRI.

By comparison, retail sales of all food grew by only 2.3 percent in the same time period. Total unit sales for specialty foods were up 13.6 percent.

Specialty foods are outpacing their non-specialty counterparts in almost every category, as consumers continue to become more aware of quality in their food choices. Categories aligned with better-for-you options, health and wellness, and freshness are growing fastest.

“Consumer preferences for specialty food products are growing at double digits, outpacing mainstream food staples.” said Phil Kafarakis, president of the Specialty Food Association. “The products our members create appeal to consumers looking for authentic tastes and foods with fewer and cleaner ingredients."

Among insights and market drivers identified in the report:

  • Specialty food sales in multi-unit grocery and mass merchants outpaced that of natural or specialty chains for the first time, largely a result of the convenience-minded millennial generation who seek and buy specialty foods wherever they are shopping.
  • Specialty beverages account for a much smaller percent of the total specialty food retail market than food, but sales performance outpaced food between 2014 and 2016, at 24 percent versus 15 perfect. Refrigerated RTD tea and coffee and juices and functional beverages are driving a lot of the growth.
  • While fresh and perishable category growth is soaring, grocery (shelf-stable specialty foods) accounted for 61 percent of the total specialty food market in 2016, or $36.2 billion. Wellness bars and gels, and nut and seed butters were among categories demonstrating strong growth.

The State of the Specialty Food Industry research encompasses three years of sales data (2014-2016) for 61 specialty food categories, pulled from the SPINS/IRI database of mainstream and natural food stores. In addition, Mintel surveyed specialty food manufacturers, importers, distributors, brokers, and retailers to develop benchmarking supply chain data. More top-level statistics can be found here, plus links to download research highlights and a Summary Report, with detailed information on how the food industry performed in 2016, including the fastest- and slowest-growing channels for specialty food sales, sales comparisons of specialty food categories vs. mainstream foods, and penetration levels of specialty food categories.

Related: News Release: Specialty Food Industry Sales Hit $127 Billion in 2016