Nut and seed butters (up 51%), eggs (39.5%) and frozen desserts (28.2%) are the fastest growing specialty products across supermarkets, natural food stores, specialty food retailers and foodservice, show the findings of the Specialty Food Association’s State of the Specialty Food Industry 2014 report, prepared in conjunction with Mintel International and SPINS.
The report defines specialty foods as products with limited distribution and a reputation for high quality. With $88 billion in 2013 sales, specialties accounted for more than 20% of all supermarket sales, said David Lockwood, director of consulting at Mintel, during a presentation of the findings, Wednesday.
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The largest specialty category continues to be cheese and cheese substitutes, with nearly $4 billion in 2013 sales, up 16.1% from 2011, followed by the meat, poultry and seafood category, and chips, pretzels and snacks.
An interest in nutrition is driving growth in nut and seed butters, noted Ron Tanner, VP of philanthropy, and government and industry relations for SFA. “A lot of people are looking for alternatives to [traditional] protein, and nut and seed butters, almond butters, peanut butter and things like that are really on a growth spike,” he said.
Interest in specialty versions of another protein — eggs— is likely spurred by food safety concerns, Tanner added. “I think [sales growth is] reaction to a lot of food safety outbreaks with mass produced eggs,” he said. “People are looking for organic, local and eggs that do not come from giant farms.”
While mainstream supermarkets account for about two-thirds of specialty sales, they’re losing share to specialty food stores, due in part to customer service.
“[Specialty consumers] are looking for smaller, friendlier places to shop,” explained Tanner. “Places where the employees know the people coming in and the employees know the products. So that style of store is doing really well.”
Results from the survey portion of the report show that retailers are cognizant of specialty shoppers' expectations. When asked about some of their greatest challenges, retailers reported "keeping on top of trends," "difficulty in having a clear identity when trying to appeal to as many people as possible," "teaching customers and employees about the stories behind the foods as a way to sell them" and "finding interesting new products that are low enough cost for people to buy them."
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