The State of the Specialty Food Industry 2016
Specialty food sales hit $120.5 billion in the U.S. in 2015, according to this year’s State of the Specialty Food Industry report, produced by the Specialty Food Association and Mintel. Dollar sales grew 21.2 percent since 2013, and unit sales increased 13.7 percent.
Here are some key takeaways:
* Though mainstream retailers account for the largest share of specialty food sales, they are growing at an almost equal rate as specialty food and natural food stores. According to supply chain data, sales potential may be biggest in natural stores.
* Specialty food sales through foodservice are growing faster than retail sales: 27 percent versus 19.7 percent. More U.S. consumers are dining out and seeking high-quality, flavorful foods when doing so.
* Fifty-eight out of 61 specialty food categories enjoyed double-digit sales growth in 2015, and two categories grew by more than 200 percent. Fresh, protein, and convenience are three trends holding steady as evidenced in the specialty food categories showing the most sales growth in 2015: refrigerated RTD tea and coffee; eggs; jerky and other meat snacks; refrigerated pasta; and water.
* By comparison, 15 categories in all food sales experienced a downturn. The biggest drops were in frozen juices and beverages, drink mixes and concentrates, and cold cereals.
Following are some top-level statistics on the size of the specialty food industry at retail and top-selling categories. For the Summary and Full Report, please see below.
Specialty food sales at retail grew to $94 billion in 2015, a 19.7 percent jump since 2013 driven by product innovation and increased penetration in mainstream sales channels. Mainstream retailers such as Kroger, Costco, and Target account for more than four-fifths of sales as these chains have expanded their presence in specialty foods significantly. But sales of specialty food appear promising across channels: growth among mainstream, natural food, and specialty food stores has been relatively equal from 2013 to 2015, at about 20 percent, with specialty food stores enjoying a slight edge
The ten top-selling categories are similar to last year. Cheese remains at the top and has grown 14.7 percent to $4.3 billion, but frozen and refrigerated meat, poultry, and seafood and chips, pretzels, and snacks have inched up to the number-two and -three spots, respectively. Refrigerated entrees and prepared meals joined the top 10 after experiencing a 34.5 percent sales increase over the past two years.
Unit sales of specialty foods grew 13.7 percent overall to 15.6 billion. Growth was led by refrigerated RTD tea and coffee, which grew a whopping 301.6 percent.
Specialty food’s market share of all food sales is 14.1 percent. Categories with the biggest growth in penetration are refrigerated pasta and pizza sauces; refrigerated pasta; and refrigerated RTD tea and coffee; and frozen meat alternatives.
More highlights from the supply chain:
* The supply chain has embraced the importance of e-commerce as a way to sell direct to consumers. Eighty-five percent of manufacturers sell via their own website and 49 percent use a third-party platform like Amazon. Importers cite online sales as one of their fastest-growing channels.
* Manufacturers say retail sales—whether through distributors or direct—are their biggest and fastest-growing sales channel. However, they are enjoying success via the foodservice market as well, with an almost equal amount of sales coming from products made exclusively for foodservice as products also sold to retail.
* Many in the supply chain believe non-GMO will be a product claim of growing importance to consumers. Forty-nine percent of manufacturers plan to introduce products that are non-GMO in 2016.
* Local products are still an important way retailers differentiate their offerings.
ABOUT THE RESEARCH
The Specialty Food Association’s State of the Specialty Food Industry is a joint research project prepared by Mintel and SPINS/IRI. The research encompasses the three most recent calendar years of sales data and includes figures for 61 specialty food categories, pulled from the SPINS database of mainstream and natural food stores. In addition, Mintel surveyed specialty food manufacturers, importers, distributors, brokers, and retailers to develop the statistics presented.
Specialty foods are defined as foods or beverages of the highest grade, style, and/or quality in their respective categories. Their specialty nature derives from a combination of some or all of the following qualities: uniqueness, origin, processing method, design, limited supply, unusual application or use, extraordinary packaging, or channel of distribution/sales
READ DEFINITIONS AND BRAND EXAMPLES for the 61 categories included in this research. (DOWNLOAD PDF)
READ REPORT HIGHLIGHTS HERE
DOWNLOAD THE 2016 STATE OF THE INDUSTRY SUMMARY REPORT
MEMBERS DOWNLOAD THE FULL 2016 STATE OF THE INDUSTRY REPORT
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