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  • Category Trends and Innovations: The State of the Specialty Food Industry

    Denise Purcell

    Each year as part of the State of the Specialty Food Industry research, we track and forecast sales performance of key categories over 10 years. As part of this work, our research team, David Lockwood and David Browne, analyzes what’s happening innovation-wise at the shelf-, brand-, and item-level through a combination of trend research online, as well as in-person experiences at Winter and Summer Fancy Food Shows, and store visits at specialty retailers. 

    Several of the most prominent innovation trends in 2022 include: 

    Diverse-owned brands in the spotlight. Much as specialty consumers have gained affinity for local/regional brands where they shop for food and beverages, many now have an ethical/moral interest in another subset of products; women-, BIPOC-, and/or LGBTQ+- owned brands. Some retailers identify relevant brands in featured sets or with shelf signage and build promotions around key months in the year that celebrate these groups. Brands can obtain certifications, which may help to entice label-reading shoppers. It’s too early to tell if there are certain food and beverage categories where these brands compete more commonly. Instead, it’s apparent that an attentive shopper will often have a choice at the shelf. It’s also unclear if a consumer will prioritize brand ownership over other characteristics such as organic, non-GMO, etc, if given limited options.

    Convenience after COVID. As we come out of COVID, or at least have migrated into later phases of the virus, it’s apparent that consumers are tired of all the at-home meal preparation. While they honed their cooking and baking skills in 2020, and branched out and experimented in 2021, they entered 2022 fatigued and craving convenience. This takes many forms:

    • Ready-to-eat (RTE), heat-and-eat, ready-to-drink (RTD) innovations have helped grow categories including Beans, grains, rice, dry (Shelf stable); Entrées (Refrigerated); Entrées, lunch, dinner (Frozen); and Tea and coffee, RTD (Refrigerated).
    • Even as boxed mac-and-cheese slowed in 2021, Pasta (Shel stable) and Sauces,  pasta, pizza (Shelf stable) both continued to perform well into early 2022, not only due to rising food prices that make these categories stay appealing, but also simple convenience.
    • Kitchen shortcuts in the Baking mixes, ingredients, flours category that only require water or oil, readily available with any diet or allergy in mind. At the same time, growth in mature specialty categories like Cheese and plant-based cheese came from shredded/sliced subcategories. Deli meat correspondingly did well, too.
    • Improved home-brewed tea and coffee via Creams and creamers (Refrigerated). An ever-increasing array of flavors, functional additives (e.g., mushrooms, healthy fats, vitamins), and bases (dairy or plant-based) give consumers many options to enhance their tea/coffee.

    The return of indulgence. It never really went away, except perhaps when it took a back seat during the earliest phases of COVID panic buying, but consumers are increasingly enjoying sweet and savory snack categories, even as inflation drives food prices higher. A quick look at some of the best performing categories in early 2022 includes Chips, pretzels, snacks; Chocolate and other confectionery; Cookies and snack bars; and Desserts (Frozen), and we’re seeing indulgence run through many categories both in ingredient profile and marketing messaging.

    Upcycling and food waste solutions. Brands like Renewal Mill, Fabalish, and The Spare Co. are just the tip of the iceberg. They’re partnering in some cases with widely-known brands, too, which should help more consumers get exposed to this segment. Retailers including Misfits Market focus their entire business model on food waste solutions, too, and “upcycled” shopping is fairly easy on a site such as HiveBrands.com.  

    You can view innovation and flavor trends in each of the 37 categories forecasted by purchasing the full State of the Specialty Food Industry report, 2022-2023 Edition. SFA members receive discounted pricing.

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