The sales of specialty food and beverages were $148.7 billion in 2018, according to The State of the Specialty Food Industry, 2019-2020 Edition from The Specialty Food Association and reported in the Summer 2019 issue of Specialty Food Magazine. That’s a 9.8% increase since 2016.
The highest growth in retail sales were in refrigerated, fresh, frozen, and plant-based products. The following top 10 categories made up almost half of retail specialty food sales:
- Cheese and plant-based cheese
- Frozen, refrigerated meat, poultry, seafood
- Chips, pretzels, snacks
- Non-RTD coffee and hot cocoa
- Bread and baked goods
- Chocolate and other confectionery
- Refrigerated entrées
- Frozen desserts
- Frozen entrées
- Yogurt and kefir
The following top 10 categories had the highest dollar growth:
- Refrigerated plant-based meat alternatives
- Rice cakes
- Frozen plant-based meat alternatives
- Refrigerated RTD tea and coffee
- Shelf-stable creams and creamers
- Refrigerated creams and creamers
- Frozen desserts
- Jerky and meat snacks
- Refrigerated pasta
Millennials led the way in purchasing specialty food, with 84% buying items in 2018. However, the report notes that older Millennials (ages 35–42) showed patterns similar to Gen X (ages 43–54). The 75% of Gen X who bought specialty food in 2018 were more likely than any other generation to buy products from a wider range of categories.
Findings about Gen X included:
- They are more likely to impulse buy specialty foods.
- They are more likely to buy specialty products for breakfast and dinner and as treats.
- Although they expect to pay more for specialty items, they aren’t happy about it. More than one-third think the food is overpriced.
- They shop a range of retailers but prioritize online and discounters.
- They buy a lot of organic, locally sourced, plant-based, ethical, and sustainable products.
As for the up-and-coming Gen Z (ages 18–24), they went from being the biggest buyers of specialty food in 2017 (79%) to the smallest in 2018 (66%). The report states it’s too early to know if this change is a pattern. Also, other findings show Gen Z’s interests are aligned with specialty food consumers. One possible explanation for the change in purchases is that Gen Z is more financially conservative than Millennials.
Men were much more likely in 2018 than in the past to be either the primary food shopper for their households or to have a participating role. Characteristics of men shoppers include:
- They favor quick-meal options and are more likely to look for convenient foods.
- The reasons they buy specialty foods include superior quality, the foods are better for the environment, after tasting the food in a store, and for dietary or health reasons.
- They shop in many different retail channels and are more open to buying groceries online.
- They are more likely to buy specialty products for breakfast or lunch.
- They yearn for guidance and information related to food and food companies.
Characteristics of women shoppers include:
- They favor made-from-scratch meals and local/regional foods.
- The reasons they buy specialty foods include superior or interesting/unusual tastes, flavors, or varieties compared to everyday grocery items.
- They are willing to pay more for quality food.
- They read nutrition/ingredient labels most of the time and are more likely to buy non-GMO products.
- They are more likely to want to customize foodservice orders.
The Specialty Food Association offers seven main takeaways from the report:
- Plant-based is a strong trend, with a 24% increase in the retail market for plant-based specialty products from 2016 to 2018.
- The market for specialty beverages is increasing. Beverage sales grew faster than food sales from 2016 to 2018.
- Younger consumers are less likely to buy quick meals at supermarkets. The report calls this a potentially worrisome trend for supermarket restaurants/cafes/delis/fresh food sections.
- Consumers want both reduced packaging and less food waste.
- Convenience stores are an under-used market for specialty food.
- Foodservice needs to offer more customization options.
- Breakfast is a growing opportunity for specialty foods.