the state of the specialty food
TRANSCRIPT
creamedhoney
granola
BR
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DO
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IC
spice
all-natural bacon
SPECIALTY FOODPRODUCTS • TRENDS • BUSINESS INSIGHTS M A G A Z I N E ®MA A N
SPECIALTY FOOD
THE STATE OF THE
INDUSTRY 2012
BREADORGANIC
THE STATE OF THE SPECIALTY
FOOD INDUSTRY 2012
• Total sales of specialty foods in 2011 were $75.14
billion, with $59.74 billion retail sales.
• Specialty foods represent 13.7 percent of all food
sales at retail.
• New product introductions were down 6.2 percent in
2011 and lag behind 2009 introductions.
• Premium private-label introductions continue to drop,
down 11 percent in 2011 to 410 products.
• The leading claim for new specialty food products is
Kosher, followed by All Natural.
• Natural food stores are the fastest growing retail
channel, boasting a sales increase of 19.8 percent
between 2009 and 2011.
• Cheese and Cheese Alternatives is the largest
specialty food category, at $3.44 billion.
• Refrigerated Salsas and Dips, Teas and Pickles,
Peppers, Olives and Other Vegetables have the
highest specialty food penetration.
• Shelf-Stable Functional Beverages are the fastest
growing specialty food category, followed by
Yogurt and Kefir.
• In 2011, 41 percent of specialty food manufactur-
ers reported more than a 20 percent increase
in sales.
• Manufacturers say that specialty food stores and
natural supermarkets are the fastest growing retail
channels for specialty foods.
• The average transaction size for specialty food
stores was $41.49 in 2011, up 11.4 percent
over 2010.
• Three-quarters of retailers say that Local is the most
influential product claim today and two-thirds report
the claim will grow the most in the next three years.
• Retailers say the fastest emerging cuisine is Latin;
importers report that Eastern European and Indian
are growing.
BY RON TANNER
The specialty food industry continues to enjoy spectacular growth, outpacing most sectors within
the U.S. economy. From 2009 through 2011, sales of specialty foods rocketed by 19.1 percent. Sales at retail
grew 9.2 percent between 2010 and 2011.
Working with Mintel International and SPINS, the National Association for the Specialty Food Trade and
Specialty Food Magazine have tracked sales of specialty foods through supermarkets, natural food stores and
specialty food retailers. The data reveals a stand-out industry. Here are some of the highlights:
The NASFT State of the Specialty Food Industry is a joint research project prepared by Mintel International
and SPINS. The project encompasses three years of sales data (2009–2011) for 51 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 in this report.
ABOUT THE RESEARCH
Illustrations by Funnel Inc.
2A ❘ THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012
FOR DEFINITIONS and brand examples of
specialty food segments researched for this
report—plus Supply Chain Insights—visit
specialtyfood.com/onlinehighlights.
-
THE SIZE OF THE SPECIALTY FOOD INDUSTRY
AT RETAIL AND FOODSERVICE
Total U.S. sales of specialty foods are booming, up 19.1 percent between 2009 and 2011. Sales now top $75 billion; about four-fifths of sales occur at retail.
Retail sales of specialty foods increased 9.2 percent between 2010 and 2011, well above the rate of inflation. This follows a strong jump of 7.6 percent between 2009 and 2010. Consumers like to eat well and are willing to seek out and pay for specialty foods.
The market share within retail channels has held steady over the past three years. Although natural food stores have grown at the highest rate—nearly 20 percent—mainstream stores continue to dominate. Interestingly, specialty food stores have held their own despite growing competition from large chains.
THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012 ❘ 3A
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Source:
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TOTAL U.S. SALES OF SPECIALTY FOOD
TOTAL U.S. RETAIL DOLLAR SALES
OF SPECIALTY FOODS
SPECIALTY FOOD SALES BY RETAIL CHANNEL
59,737
15,400
75,137
79.5
20.5
100.0
Retail Channels
Foodservice
Total
$ Million % Share
18.7
20.8
19.1
% Change
2011 2011 2009–2011
$ Million Index% Change $ Million Index% Change
Sales at Current Prices Sales at Inflation-Adjusted Prices*
2009 50,858 — 100 52,519 — 100
2010 54,722 7.6 108 55,598 5.9 106
2011 59,737 9.2 117 59,737 7.4 114
Mainstream
Specialty Food Stores
Natural Food Stores
Total
21,789
5,797
2,416
30,002
72.6
19.3
8.1
100.0
72.4
19.3
8.3
100.0
72.5
19.3
8.2
100.0
17.0%
16.8%
19.8%
17.2%
23,292
6,205
2,660
32,157
25,504
6,772
2,894
35,169
$ Million % Share $ Million % Share
2009 2010
$ Million % Share
2011 CHANGE
2009–2011
BREADORGANIC
pretzelsSEA SALT
granola
spice
PREMIUM FOOD PRODUCT INTRODUCTIONS
New product introductions Gell by ��2 percent in 2011, after a meager gain in 2010. Within food, Bakery and Snacks led, with 130 introductions apiece. Beverage debuts were up, with Juice Drinks showing the most significant jump.
4A ❘ THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012
INTRODUCTIONS BY CATEGORY
NeX ipremiumw positioned Good and beWeraHe product launches in all
outlets by cateHory
Source: Mintel/GNPD
Product Category
Bakery
Snacks
Sauces and Seasonings
Processed Fish, Meat and Egg Products
Desserts and Ice Cream
Meals and Meal Centers
Chocolate Confectionery
Dairy
Side Dishes
Sugar and Gum Confectionery
Fruits and Vegetables
Sweet Spreads
Breakfast Cereals
Savory Spreads
Soup
Baby Food
Sweeteners and Sugar
Beverages (subtotal)
Alcoholic Beverages
Hot Beverages
Juice Drinks
Water
Ready-to-Drink Coffee & Tea
Carbonated Soft Drinks
Sports and Energy Drinks
Other Beverages
Total
142
132
101
156
150
81
147
24
49
35
63
29
15
12
7
3
7
320
80
90
55
18
25
13
6
33
1,473
151
114
168
157
79
111
104
54
43
16
33
33
5
22
13
6
3
397
179
124
47
4
25
11
0
7
1,509
130
130
123
120
108
76
75
52
43
29
24
22
22
19
15
9
3
415
169
104
71
11
10
10
5
35
1,415
# of Introductions
2009 2010 2011
1,153 1,112 1,000Food (subtotal)
KOSHER
COOKIES
all-natural bacon
No A
dditives
PREMIUM FOOD PRODUCT INTRODUCTIONS
Kosher continues to be the leading product claim, with 446 new kosher products in 2011. The most significant increases were in Low/No/Reduced Trans Fat and Low/No/Reduced Cholesterol. Whole Grain claims are on the rise while Organic is declining. Convenience-related claims such as Ease of Use, Microwaveable and Time/Speed seem to be losing importance.
Private-label introductions are slowing, accounting for 29 percent of premium product launches in 2011. As consumers feel more economically steady, many are switching back to brands.
THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012 ❘ 5A
Data does not equal totals because products may make more than one claim
Farm FreshSource: Mintel/GNPD
Source: Mintel/GNPD
INTRODUCTIONS BY CLAIM
NAME BRAND VS. PRIVATE-LABEL
PREMIUM PRODUCT LAUNCHES
Kosher
All Natural
No Additives/Preservatives
Ethical—Environmentally Friendly Package
Low/No/Reduced Allergen
Microwaveable
Gluten-Free
Low/No/Reduced Trans Fat
Ease of Use
Convenient Packaging
Low/No/Reduced Fat
Organic
Low/No/Reduced Cholesterol
Ethical—Environmentally Friendly Product
Whole Grain
Low/No/Reduced Sugar
Time/Speed
Seasonal
Antioxidant
Low/No/Reduced Calorie
Total
442
237
172
141
73
151
65
98
129
116
122
119
58
40
41
64
58
50
45
57
1,473
462
265
225
244
139
150
130
89
136
176
103
90
58
53
48
54
77
55
32
35
1,509
446
267
228
208
138
124
122
114
105
93
89
81
73
57
56
55
54
44
43
33
1,415
# of Introductions
CLAIMS 2009 2010 2011
Product Category
Name Brand
Private Label
Total
Private-label Share %
959
514
1,473
%
34.9
1,054
455
1,509
%
30.2
1,005
410
1,415
%
29.0
2009# 2010# 2011#
SALES OF SPECIALTY FOODS AT RETAIL
Specialty foods at retail (excluding PLU and private label) increased by 17.2 percent between 2009 and 2011. Cheese and Cheese Alternatives, at $3.4 billion, are by far the largest specialty food category, followed by Meat, Poultry and Seafood; Chips, Pretzels and Snacks; Coffee, Coffee Substitutes and Cocoa; and Bread and Baked Goods. Only two categories showed decline.
Does not include sales
through Whole Foods,
Trader Joe’s or
Walmart
Does not include
private-label sales or
PLU items
Data may not equal
totals due to rounding
*Editor’s Note: The total
size of the U.S. specialty
food market and the
numbers presented here
are different because the
Product Category data
does not include PLU
items such as prepared
foods, meat, bread,
pastries and so on.
Mintel estimates that
these products account
for about 40 percent of
specialty food sales.
Source:
Mintel/SPINS/Nielsen
Product Category 2009
$ Million
2011
$ Million
% Change
2009–2011% Share % Share
Cheese and Cheese AlternativesMeats, Poultry and SeafoodChips, Pretzels and SnacksCoffee, Coffee Substitutes and CocoaBread and Baked GoodsYogurt and KefirCondiments, Dressings and MarinadesFrozen Lunch and Dinner EntreesCandy and Individual SnacksFrozen DessertsMilkCookies and Snack BarsNuts, Seeds, Dried Fruit and Trail MixesPickles, Peppers, Olives and Other VegetablesRefrigerated Salsas and DipsTeasBaking Mixes, Supplies and FlourShelf-Stable Fruits and VegetablesOils and VinegarsCold CerealsRefrigerated Juices and Functional BeveragesShelf-Stable JuicesCrackers and CrispbreadsEnergy Bars and GelsSoupSeasoningsWaterShelf-Stable Pasta and Pizza SaucesReady-to-Drink Tea and CoffeeShelf-Stable PastasCarbonated BeveragesBeans, Grains and RiceEntrees and MixesSweetenersShelf-Stable Meat, Poultry and SeafoodRefrigerated CondimentsFrozen Fruits and VegetablesOther Dairy and AlternativesShelf-Stable Salsas and DipsFrozen Appetizers and SnacksEggsNut and Seed ButtersShelf-Stable Functional BeveragesPudding and Shelf-Stable DessertsConserves, Jams and SpreadsFrozen Breakfast FoodsHot CerealsRefrigerated PastaRice CakesRefrigerated Pasta and Pizza SaucesFrozen Juice and BeveragesOtherTOTAL
3,1131,6501,5581,1481,381
8321,3271,082
940921805772506643522591613576593573560521501352459466431443368407403370367299311259229239238234137118
47132124
95723818167
1,59530,002
3,4401,9211,8381,7031,6341,6281,4391,1211,0871,048
947838701682660658649628618616609560527526510509500488451444427398386315314298286273254246168153143135130109864521157
1,98035,169
10.516.418.048.318.395.78.43.6
15.513.717.78.5
38.46.1
26.411.55.99.04.17.68.87.55.0
49.711.29.1
15.910.122.59.26.07.45.35.61.0
15.424.614.57.05.2
22.129.5
203.52.15.2
15.319.818.212.6-2.4-4.224.1
17.2
10.45.55.23.84.62.84.43.63.13.12.72.61.72.11.72.02.01.92.01.91.91.71.71.21.51.61.41.51.21.41.31.21.21.01.00.90.80.80.80.80.50.40.20.40.40.30.20.10.10.10.05.3
100.0
9.85.55.24.84.64.64.13.23.13.02.72.42.01.91.91.91.81.81.81.81.71.61.51.51.51.41.41.41.31.31.21.11.10.90.90.80.80.80.70.70.50.40.40.40.40.30.20.10.10.00.05.7
100.0
RETAIL SALES OF ALL FOODS
Sales of all food, including mass market and specialty, increased just 5.1 percent between 2009 and 2011. Big gainers include Coffee, Coffee Substitutes and Cocoa along with Shelf-Stable Functional Beverages, both increasing more than 20 percent.
The penetration of specialty foods varies significantly by category. Specialty Refrigerated Salsas and Dips and Teas represent more than 50 percent of sales in those categories and specialty Pickles, Peppers, Olives and Other Vegetables, Refrigerated Pasta and Pizza Sauces and Yogurt and Kefir account for more than one-third of their category sales.
Sourc
e: M
inte
l/SPIN
S/N
iels
en
Sourc
e: M
inte
l/SPIN
S/N
iels
en
Does not include sales through Whole Foods, Trader Joe’s or Walmart. Does not include private-label sales or PLU items. Data may not equal totals due to rounding.
Product Category 2009$ Million
2011$ Million
% Change2009Ð2011
Share%
Share%
Specialty Product Category
SPECIALTY FOOD PERCENTAGE OF
ALL FOOD SALES BY CATEGORY
Share of All Sales
%
Meats, Poultry and Seafood
Bread and Baked Goods
Milk
Carbonated Beverages
Cheese and Cheese Alternatives
Chips, Pretzels and Snacks
Frozen Desserts
Frozen Lunch and Dinner Entrees
Candy and Individual Snacks
Condiments, Dressings and Marinades
Cold Cereals
Shelf-Stable Juices
Shelf-Stable Fruits and Vegetables
Coffee, Coffee Substitutes and Cocoa
Water
Entrees and Mixes
Yogurt and Kefir
Other Dairy and Alternatives
Refrigerated Juices and Functional Beverages
Cookies and Snack Bars
Crackers and Crispbreads
Soup
Nuts, Seeds, Dried Fruit and Trail Mixes
Frozen Fruits and Vegetables
Eggs
Baking Mixes, Supplies and Flour
Shelf-Stable Functional Beverages
Shelf-Stable Meat, Poultry and Seafood
Energy Bars and Gels
Oils and Vinegars
Beans, Grains and Rice
Sweeteners
Seasonings
Ready-to-Drink Coffee and Tea
Pickles, Peppers, Olives and Other Vegetables
Pudding and Shelf-Stable Desserts
Shelf-Stable Pastas
Frozen Breakfast Foods
Shelf-Stable Pasta and Pizza Sauces
Refrigerated Condiments
Nut and Seed Butters
Teas
Shelf-Stable Salsas and Dips
Frozen Appetizers and Snacks
Refrigerated Salsas and Dips
Conserves, Jams and Spreads
Hot Cereals
Frozen Juice and Beverages
Refrigerated Pasta
Rice Cakes
Refrigerated Pasta and Pizza Sauces
Other
TOTAL
18,092
16,061
13,861
14,175
11,616
10,731
10,232
10,604
9,405
6,562
6,799
6,079
5,666
4,223
4,936
5,081
4,141
4,395
4,570
4,314
4,156
4,345
3,699
3,719
3,232
3,579
2,627
2,915
2,477
2,703
2,446
2,251
2,054
1,883
1,932
1,944
1,803
1,584
1,670
1,294
1,116
1,230
1,161
1,132
959
998
897
414
223
229
51
12,039
244,305
19,690
16,487
15,319
14,008
12,514
11,298
10,544
10,494
10,211
6,666
6,630
6,026
5,609
5,235
5,163
5,066
4,916
4,758
4,721
4,481
4,420
4,214
4,086
3,875
3,619
3,606
3,199
3,046
2,860
2,719
2,445
2,432
2,165
2,150
1,984
1,926
1,827
1,774
1,717
1,374
1,304
1,255
1,204
1,160
1,148
1,018
879
356
250
182
44
12,737
256,811
7.4
6.6
5.7
5.8
4.8
4.4
4.2
4.3
3.8
2.7
2.8
2.5
2.3
1.7
2.0
2.1
1.7
1.8
1.9
1.8
1.7
1.8
1.5
1.5
1.3
1.5
1.1
1.2
1.0
1.1
1.0
0.9
0.8
0.8
0.8
0.8
0.7
0.6
0.7
0.5
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.2
0.1
0.1
0.0
4.8
100.0
7.7
6.4
6.0
5.5
4.9
4.4
4.1
4.1
4.0
2.6
2.6
2.3
2.2
2.0
2.0
2.0
1.9
1.9
1.8
1.7
1.7
1.6
1.6
1.5
1.4
1.4
1.2
1.2
1.1
1.1
1.0
0.9
0.8
0.8
0.8
0.7
0.7
0.7
0.7
0.5
0.5
0.5
0.5
0.5
0.4
0.4
0.3
0.1
0.1
0.1
0.0
5.1
100.0
8.8
2.7
10.5
-1.2
7.7
5.3
3.0
-1.0
8.6
1.6
-2.5
-0.9
-1.0
24.0
4.6
-0.3
18.7
8.2
3.3
3.9
6.3
-3.0
10.5
4.2
12.0
0.8
21.8
4.5
15.4
0.6
0.0
8.0
5.4
14.2
2.7
-1.0
1.4
12.0
2.8
6.2
16.9
2.1
3.7
2.5
19.6
2.1
-2.0
-14.0
12.2
-20.5
-12.2
5.8
5.1
Refrigerated Salsas and Dips
Teas
Pickles, Peppers, Olives and Other Vegetables
Refrigerated Pasta and Pizza Sauces
Yogurt and Kefir
Coffee, Coffee Substitutes and Cocoa
Shelf-Stable Pasta and Pizza Sauces
Cheese and Cheese Alternatives
Shelf-Stable Pastas
Seasonings
Oils and Vinegars
Refrigerated Condiments
Condiments, Dressings and Marinades
Frozen Appetizers and Snacks
Shelf-Stable Salsas and Dips
Ready-to-Drink Coffee and Tea
Cookies and Snack Bars
Energy Bars and Gels
Baking Mixes, Supplies and Flour
Refrigerated Pasta
Nuts, Seeds, Dried Fruit and Trail Mixes
Beans, Grains and Rice
Chips, Pretzels and Snacks
Sweeteners
Refrigerated Juices and Functional Beverages
Conserves, Jams and Spreads
Soup
Crackers and Crispbreads
Nut and Seed Butters
Rice Cakes
Shelf-Stable Fruits and Vegetables
Frozen Lunch and Dinner Entrees
Candy and Individual Snacks
Shelf-Stable Meat, Poultry and Seafood
Bread and Baked Goods
Frozen Desserts
Frozen and Refrigerated Meats, Poultry and Seafood
Hot Cereals
Water
Cold Cereals
Shelf-Stable Juices
Entrees and Mixes
Frozen Fruits and Vegetables
Pudding and Shelf-Stable Desserts
Milk
Frozen Breakfast Foods
Other Dairy and Alternatives
Eggs
Shelf-Stable Functional Beverages
Carbonated Beverages
Frozen Juice and Beverages
Other
TOTAL % OF SPECIALTY FOOD SALES
57.5
52.4
34.4
34.2
33.1
32.5
28.4
27.5
24.3
23.5
22.7
21.7
21.6
21.2
21.1
21.0
18.7
18.4
18.0
17.9
17.1
16.3
16.3
13.0
12.9
12.8
12.1
11.9
11.7
11.4
11.2
10.7
10.6
10.3
9.9
9.9
9.8
9.8
9.7
9.3
9.3
7.6
7.4
7.0
6.2
6.1
5.7
4.6
4.5
3.1
1.9
15.5
13.7
SALES GROWTH OR DECLINE BY PRODUCT CATEGORY
This table shows which categories are growing faster in specialty than in all foods. For instance, Shelf-Stable Functional Beverages are doing well in all foods, with a 21.8 percent growth rate, but are exploding in specialty, with a 203.5 percent jump.
8A ❘ THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012
Does not include sales through Whole Foods, Trader Joe’s or WalmartDoes not include private-label sales or PLU itemsData may not equal totals due to rounding
Source:
Mintel/SPINS/Nielsen
Product CategorySpecialty Foods
% Change 2009–2011All Foods
% Change 2009–2011Variance (% point)
Shelf-Stable Functional Beverages
Yogurt and Kefir
Energy Bars and Gels
Rice Cakes
Nuts, Seeds, Dried Fruit and Trail Mixes
Coffee, Coffee Substitutes and Cocoa
Hot Cereals
Frozen Fruits and Vegetables
Bread and Baked Goods
Soup
Chips, Pretzels and Snacks
Nut and Seed Butters
Water
Frozen Desserts
Eggs
Cold Cereals
Shelf-Stable Fruits and Vegetables
Frozen Juice and Beverages
Refrigerated Pasta and Pizza Sauces
Teas
Refrigerated Condiments
Shelf-Stable Juices
Ready-to-Drink Coffee and Tea
Shelf-Stable Pastas
Frozen and Refrigerated Meats, Poultry and Seafood
Beans, Grains and Rice
Milk
Shelf-Stable Pasta and Pizza Sauces
Carbonated Beverages
Candy and Individual Snacks
Condiments, Dressings and Marinades
Refrigerated Salsas and Dips
Other Dairy and Alternatives
Refrigerated Pasta
Entrees and Mixes
Refrigerated Juices and Functional Beverages
Baking Mixes, Supplies and Flour
Frozen Lunch and Dinner Entrees
Cookies and Snack Bars
Seasonings
Oils and Vinegars
Pickles, Peppers, Olives and Other Vegetables
Frozen Breakfast Foods
Shelf-Stable Salsas and Dips
Conserves, Jams and Spreads
Pudding and Shelf-Stable Desserts
Cheese and Cheese Alternatives
Frozen Appetizers and Snacks
Crackers and Crispbreads
Sweeteners
Shelf-Stable Meat, Poultry and Seafood
Other
TOTAL
203.5
95.7
49.7
12.6
38.4
48.3
19.8
24.6
18.3
11.2
18.0
29.5
15.9
13.7
22.1
7.6
9.0
-4.2
-2.4
11.5
15.4
7.5
22.5
9.2
16.4
7.4
17.7
10.1
6.0
15.5
8.4
26.4
14.5
18.2
5.3
8.8
5.9
3.6
8.5
9.1
4.1
6.1
15.3
7.0
5.2
2.1
10.5
5.2
5.0
5.6
1.0
24.1
17.2
21.8
18.7
15.4
-20.5
10.5
24.0
-2.0
4.2
2.7
-3.0
5.3
16.9
4.6
3.0
12.0
-2.5
-1.0
-14.0
-12.2
2.1
6.2
-0.9
14.2
1.4
8.8
0.0
10.5
2.8
-1.2
8.6
1.6
19.6
8.2
12.2
-0.3
3.3
0.8
-1.0
3.9
5.4
0.6
2.7
12.0
3.7
2.1
-1.0
7.7
2.5
6.3
8.0
4.5
5.8
5.1
181.7
76.9
34.3
33.0
27.9
24.3
21.8
20.4
15.6
14.2
12.7
12.7
11.3
10.7
10.2
10.1
10.0
9.8
9.8
9.4
9.2
8.4
8.3
7.8
7.6
7.5
7.2
7.2
7.1
7.0
6.8
6.8
6.3
6.0
5.5
5.5
5.1
4.7
4.6
3.7
3.5
3.4
3.3
3.3
3.2
3.1
2.8
2.7
-1.3
-2.4
-3.6
18.3
12.1
THE SPECIALTY FOOD SUPPLY CHAIN
The average specialty food manufacturer does about $2.2 million in annual sales and the average importer reaches $2.5 million. These volume numbers have stayed about the same over the past few years, demonstrating the stability of the industry.
The average specialty food manufacturer markets 52 SKUs, while the average importer offers 178. The average number of manufacturer SKUs remained about the same in 2011, as companies continued to eliminate low-volume items when introducing new products.
Direct sales are a significant factor for specialty food manufacturers; 36 percent of retail sales are direct versus 32 percent through distributors. Foodservice accounts for about 12 percent of manufacturer sales.
SPECIALTY FOOD MANUFACTURERS
10A ❘ 5)& S5"5& 0' 5)& S1&$*"L5: '00D */D6S53: 2012
2011 MEAN ANNUAL SALES BY SUPPLIER TYPE
2009 2010 2011 % % %
DOLLAR SALES CHANGE
There has been a major turnaround since 2009, when 36 percent of manufacturers reported a sales drop. In 2011, 78 percent of manufacturers boasted an increase, with 41 percent up at least 20 percent.
Up 1–9% 21 21 17Up 10–19% 19 19 20Up 20% or more 16 36 41Unchanged 8 11 15Down 1–9% 13 7 4Down 10–19% 13 3 2Down 20% or more 10 2 2
Mean Annual Sales: $2,207,586Mean Number of SKUs: 52
Source: Mintel
52
178
1,785
2,650
Manufacturers
Importers
Distributors
Brokers
MEAN NUMBER OF SKUs BY TYPE OF SUPPLIER
Source: Mintel
Manufacturers
Importers
Distributors
Brokers
$2,207,586
$2,515,625
$7,760,000
$2,724,000
Source: Mintel
Direct to Retail
Distributors—Retail
Direct to Consumers
Direct to Foodservice
Other
Distributors—Foodservice
36%
32%
15%
7%
5%
4%
MANUFACTURER SALES BY CHANNEL
Source: MintelData may not sum to 100 due to rounding
Share of Total Sales Mean %
SPECIALTY FOOD MANUFACTURERS
For the first time, NASFT asked about innovation plans for the coming year. The answers demonstrate the diverse opportunities within the industry.
Raw materials are the biggest expense for specialty food manufacturers as they create quality food. Advertising and marketing expenses, at 10 percent, are low as these entrepreneurs rely on their personalities and passion to sell.
The three major product claims that interest consum-ers today are All Natural, Local and Organic. Manufacturers predict that Local, All Natural and Sustainable will grow the most in the next three years.
Manufacturers believe that the most sales potential is with specialty food stores, followed closely by natural supermarkets.
Data may not sum to
100 due to rounding
SPECIALTY FOOD INNOVATION
PLANS FOR 2012
FASTEST GROWING RETAIL CHANNELS
FOR SPECIALTY FOODS
THE MANUFACTURER VIEWPOINT:
WHAT ARE THE INFLUENTIAL PRODUCT CLAIMS?
Interests Consumers Most Today
Will Grow the Most in the Next Three Years
72%
43%
38%
67%
19%
30%
18%
41%
10%
17%
56%
28%
All Natural
Organic
Local*
Eco-Friendly
Sustainable
Fair Trade Multiple answers accepted
Source: Mintel
*“Local” is defined as within
200 miles distance from operator
Gluten-free
Convenient/Easy to Prepare
Indulgent
Functional
Less Indulgent and More Healthful
Portable
Other
35
32
30
26
23
20
22
Multiple answers accepted Source: Mintel
I plan to develop specialty food that is also…
Natural Supermarkets (e.g.,Whole Foods Market)
Conventional Supermarkets (e.g., Kroger, Safeway)
Foodservice (e.g., restaurants, cafés, school/office cafeterias)
Mass Merchandisers (e.g., Target, Walmart)
Other
Specialty Food Stores
Data may not sum to 100 due to rounding Source: Mintel
25
24
18
12
8
14
Raw Materials
Packaging
Administrative
Advertising & Marketing
Other
Source: Mintel
31%
25%18%
11%
10%
6%
MANUFACTURER EXPENSES BY TYPE
Share of Total Expenses Mean %
%
%
Production, Warehousing, Shipping and Labor
THE IMPORTER VIEWPOINT:
WHAT ARE THE INFLUENTIAL PRODUCT CLAIMS?
Interests Consumers Most Today
Will Grow the Most in the Next Three Years
75%
50%
50%
63%
13%
13%
13%
13%
6%
19%
56%
50%
All Natural
Organic
Local
Eco-Friendly
Sustainable
Fair Trade
SPECIALTY FOOD IMPORTERS
Specialty food importers had a good year, with 50 percent reporting increased sales; however, their performance lagged that of manufactur-ers. The weak dollar and consumers’ desire to support local producers had an adverse effect.
All Natural and Local are the most influential product claims today, believe importers. They also believe Local will grow the most in the next three years.
The hot emerging cuisines will be Eastern European and Indian, according to specialty food importers. Goulash and curry, anyone?
Importers also see specialty food stores as the fastest-growing channel, followed by natural supermar-kets. They are not enthusiastic about foodservice as restaurants embrace the local food movement.
Importers rely on distributors much more than manufacturers do, with two-thirds of sales going through retail and foodservice distributors. Very little imported product is sold directly to the consumer.
12A ❘ THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012
IMPORTER SALES BY CHANNEL
Distributors—RetailDirect to Retail Distributors—Foodservice Direct to FoodserviceDirect to Consumer
553112
2<1
Share of Total Sales 2011Mean %
FASTEST GROWING RETAIL CHANNEL
FOR SPECIALTY FOODS
Mean Annual Sales: $2,515,625Mean Number of SKUs: 178
EMERGING CUISINES
Source: Mintel
Multiple answers accepted
Source: Mintel
*“Local” is defined as within
200 miles distance from operator
Source: Mintel
Multiple answers accepted Source: Mintel
Natural Supermarkets (e.g.,Whole Foods Market)
Conventional Supermarkets (e.g., Kroger, Safeway)
Foodservice (e.g., restaurants, cafés, school/office cafeterias)
Mass Merchandisers (e.g., Target, Walmart)
Other
Specialty Food Stores
Data may not sum to 100 due to rounding
Data may not sum to 100 due to rounding
Source: Mintel
31
25
19
–
13
13
20
24
28
4
12
12
0
6
19
25
38
6
6
6
2010 % 2011 %
Up 1–9%
Up 10–19%
Up 20% or more
Unchanged
Down 1–9%
Down 10–19%
Down 20 or more
Eastern European
Indian
Italian
Mediterranean
Latin, other than Mexican
African
Japanese
Korean
Thai
Vietnamese
Caribbean
Mexican
Russian
Spanish
Chinese
Other
31
31
25
25
19
13
13
13
13
13
6
6
6
6
–
13
Region% of
Importers
DOLLAR SALES CHANGE
%
SPECIALTY FOOD DISTRIBUTORS
THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012 ❘ 13A
Mean Annual Sales: $7,760,000Mean Number of SKUs: 1,785
Distributors feel that Local is by far the most significant product claim: 70 percent say it is the most important claim now and 60 percent report it will be the most important in the next three years. Eco-Friendly will also be significant in the near future.
As the major distributors grow and provide less in-store services, the mean number of stores serviced has significantly increased, to 650.
Distributors see specialty food stores as having the most potential for growth. They perceive more opportunities in conventional supermarkets than other industry segments do.
All Natural
Organic
Local*
Eco-Friendly
Sustainable
Fair Trade
FASTEST-GROWING RETAIL CHANNEL
FOR SPECIALTY FOODS
THE DISTRIBUTOR VIEWPOINT:
WHAT ARE THE INFLUENTIAL PRODUCT CLAIMS?
Multiple answers accepted Source: Mintel
*“Local” is defined as within 200 miles distance from operator
It was a good year for most specialty food distributors, with 75 percent reporting sales increases. Yet one in five did see a dip in sales.
Up 1–9%
Up 10–19%
Up 20% or more
Unchanged
Down 1–9%
Down 10–19%
Down 20% or more
25
30
20
5
20
-
-
2011 %
Source: Mintel
DOLLAR SALES CHANGE
IN THE PAST YEAR
60%
50%
30%
70%
20%
60%
20%
30%
10%
20%
60%
20%
Interests Consumers Most Today
Will Grow the Most in the Next Three Years
Specialty food stores and supermarkets are the bread and butter of distributors, followed by foodservice/restaurants and mass merchandisers.
DISTRIBUTOR SALES BY CHANNEL
Source: MintelData may not sum to 100 due to rounding
Specialty Food Stores
Supermarkets
Foodservice/Restaurants
Mass Merchandisers (e.g., Walmart, Target)
Natural Food Stores (e.g., Whole Foods Market, Trader Joeʼs)
Gift Stores
Delis
Club Stores (e.g., Costco, Samʼs Club)
Other
35
19
9
8
8
3
2
1
16
Share of Total SalesMean %
Source: Mintel
517 650
2010 2011
Mean # of Stores Services per Distributor
NUMBER OF STORES SERVICED
Natural Supermarkets (e.g.,Whole Foods Market)
Conventional Supermarkets (e.g., Kroger, Safeway)
Foodservice (e.g., restaurants, cafés, school/office cafeterias)
Mass Merchandisers (e.g., Target, Walmart)
Other
Specialty Food Stores
Data may not sum to 100 due to rounding Source: Mintel
40
20
20
-
10
10
%
SPECIALTY FOOD BROKERS
The broker community had a good year, with 84 percent reporting sales increases. Despite the challenges posed by consolidation, only 8 percent of brokers had a down year.
The broker network is quite diverse, comprising both small street brokers as well as those who operate nationally and represent thousands of specialty food products.
Brokers often service multiple channels, as evidenced by the overlap in sales. The largest channel is specialty food stores, which are called on by 84 percent of brokers. They see natural supermarkets as the fastest-growing channel.
14A ❘ THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012
Brokers believe that Local interests consumers the most today and will also grow the most in the next three years. Interest in All Natural and Organic may fade, they believe.
Mean Annual Sales: $2,724,000Mean Number of SKUs: 2,650
Local*
All Natural
Organic
Sustainable
Eco-Friendly
Fair Trade
CHANNELS SERVICED AND
FASTEST-GROWING
CHANNELS
Fastest-growingStore/
Channel %
500 or less
501–1,000
1,001–2,000
2,001–5,000
More than 5,000
20%20%
8%
24%28%
Up 1–9%
Up 10–19%
Up 20% or more
Unchanged
Down 1–9%
Down 10–19%
Down 20% or more
Natural Supermarkets (e.g.,Whole Foods Market)
Conventional Supermarkets (e.g., Kroger, Safeway)
Foodservice (e.g., restaurants, cafés, school/office cafeterias)
Mass Merchandisers (e.g., Target, Walmart)
Other
Specialty Food Stores
28
32
24
8
8
-
-
2011 %
Source: Mintel
THE BROKER VIEWPOINT:
WHAT ARE THE INFLUENTIAL PRODUCT CLAIMS?
Multiple answers accepted Source: Mintel
52%
68%
56%
20%
36%
36%
32%
12%
16%
40%
40%
60%
Interests Consumers Most Today
Will Grow the Most in the Next Three Years
NUMBER OF SKUs CURRENTLY
REPRESENTED
DOLLAR SALES CHANGE
IN THE PAST YEAR
Stores/Channels
Serviced in 2011 %
84 16
68 28
48 8
36 4
24 20
40 24
Multiple answers accepted
Source: Mintel �wLocalw is demned as witIin 200 Niles distance GroN operator
Source: Mintel
Data NaZ not suN to 100 due to roundinH
SPECIALTY FOOD STORE RETAIL
OPERATING STATISTICS
THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012 ❘ 15A
The average specialty food store comes in at slightly more than 5,000 square feet and carries 2,112 SKUs. It is busy, sporting more than 3,000 transactions per week, at an average size of $41.49, an 11.4 percent increase over 2010.
NASFT asked retailers how rising food prices have affected their business. Seventy-one percent report raising prices yet 57 percent say they are taking a lower margin. It all depends on the product and the price elasticity that consumers will pay.
About three-fourths of retailers report a sales increase for 2011. Many more experienced increases in the 10 percent and higher range than in 2010.
About one-fourth of sales in specialty food stores are natural foods and nearly one-fifth are local. Eco-Friendly and Fair Trade resonate less with shoppers, accounting for 6 percent and 5 percent of sales, respectively.
Average Annual Sales: $6,783,117Average Sales per Square Foot: $1,353.91
KEY STORE STATS
EFFECTS OF RISING FOOD PRICES
*“Local” is defined as within 200 miles distance from operator. Data may not sum to 100 due to rounding
Source: Mintel 2011
Up 1–9%Up 10–19%
Up 20% or more
Down 20% or more
Down 1–9%
Down 10–19%10%
27% 22%
14%
19%8%
DOLLAR SALES CHANGES
Unchanged
Store Size (sq. ft.)
SKUs per Store
Transactions per Week
Transaction Size
Suppliers Utilized
Value of Inventory
5,010
2,112
3,144
$41.49
88
$315,357
2011 Mean
Source: Mintel
Raised Prices
Taking a Lower Margin
Increased Assortment of Private Labels
Reduced Selection of Premium (and Higher-priced) Products
Added a Bigger Selection of Value-based Brands
Other
71
57
35
25
18
10
Source: Mintel Multiple answers accepted
Up 1–9%
Up 10–19%
Up 20% or more
Down 1–9%
Down 10–19%
8%
27%
27%20%
12%
6%
Source: Mintel
Unchanged
2010
All-Natural
Local*
Sustainable
Organic
Eco-Friendly
Fair Trade
13%
24%
6%
5%
18%
14%
SHARE OF NATURAL/ETHICAL PRODUCT SALES
% ofRetailers
Other
20%
SPECIALTY FOOD RETAILERS
As a service to NASFT members, Mintel/NASFT will be offering complimentary access to the entire 2012 State of the Specialty
Food Industry research. Access will be available beginning April 20.
NASFT’s webinars@work series will present The State of the
Specialty Food IndustryWednesday, April 11, 2012
2–3 p.m. Eastern Time.
Please contact [email protected] for more information.
SPINS offers a POS reporting service for the Specialty Gourmet supermarket channel. SPINSScan Specialty Gourmet features chains and independent operators with more than 25 percent of sales derived from specialty-gourmet and natural products. If you are interested in more information on becoming a SPINS retailer participant, please visit spins.com.
Local resonates with specialty food retailers, with 74 percent saying it interests consumers most today and 67 percent believing it will grow the most in the next three years. Although Sustainable is not influential today, retailers say it will be in the near future.
Retailers see Latin as the No. 1 emerging cuisine, followed by Mediterranean. Indian, Vietnamese
and Eastern European are also on the upswing, as noted by about three in
10 retailers.
16A ❘ THE STATE OF THE SPECIALTY FOOD INDUSTRY 2012
Ron Tanner is NASFT’s vice president, communications, education, government & industry relations.
EMERGING CUISINES
SPECIALTY FOOD RETAILERS
Local*
Organic
All Natural
Sustainable
Eco-Friendly
Fair Trade*“Local” is defined as within
200 miles distance from operator
Multiple answers accepted Source: Mintel
Multiple answers accepted Source: MintelInterests Consumers Most Today
Will Grow the Most in the Next Three Years
74%
67%
63%
55%
27%
45%
20%
25%
16%
25%
41%
33%
THE RETAILER VIEWPOINT:
WHAT ARE THE INFLUENTIAL PRODUCT CLAIMS?
Latin, other than Mexican 45
Mediterranean 37
Indian 31
Vietnamese 31
Eastern European 29
Spanish 25
African 20
Japanese 18
Korean 18
Thai 18
Mexican 16
Italian 14
Caribbean 12
Russian 6
Chinese 4
Other 18
% of
RetailersRegion