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    George Hajjar
    The most popular articles with SFA News Daily readers in September focused on grocery and consumer trends, private label strategies, and breakout talent that is blazing a trail in the specialty food industry. Following are the top five most read stories in September: 
    1. Kroger Debuts Low-Priced Private Label Line
    The Kroger Co. has launched Smart Way, a new opening price point store brand line that the retailer says brings together 16 legacy brands into a single, easy-to-find identity.
    2. SFA's 12 Under 35: Breakout Talent to Watch
    The list includes young food professionals dedicated to social justice and philanthropic endeavors, food makers who are reducing waste, providing fair wages, and even reinventing a mature category, and specialty grocers who are bringing foods with which they closely identify, to the masses.
    3. Online Grocery Sales Decline, Use Remains High
    Total sales in online grocery have decreased by 1 percent compared to last year, to $8.5 billion in August. Despite the dip, digital grocery sales have remained elevated following the increase elicited by the pandemic.
    4. Study: Consumers Will Pay Premium For Healthy Food
    Although prices have a considerable effect when grocery shoppers are choosing what to put into their basket, 55 percent of consumers are willing to pay a premium for food that contributes to their health and wellness. 
    5. Marketers Weigh in on Plant-Based vs. Vegan
    The recent Plant Based Food Expo 2022, which took place in New York, featured both emerging and mature brands marketed under plant-based and vegan designations.
    Andrew Lynch
    Zipline Logistics' trophy shelf is getting heavy. Most recently, the retail-specialized North American 3PL was honored by Inc. magazine, Food Logistics, and Inbound Logistics as a rapidly growing, top 3PL.
    This is Zipline’s 11th time making the Inc. 5000 list of fastest-growing private companies in America in its 15-year history. The list represents a unique look at the most successful independent small businesses in the American economy.
    “It is an honor to be ranked by the Inc. 5000 for the 11th time,” said Walter Lynch, CEO and co-founder of Zipline Logistics, “The rapid growth we continue to see year over year is a testament to our outstanding team members and their dedication to Zipline’s mission: improving the lives of our clients. It’s exciting to reap the great success Zipline has found in turn.”
    Zipline has also been named a 2022 Top 3PL & Cold Storage Provider by Food Logistics for the seventh time and a 2022 Top 100 3PL by Inbound Logistics for the first time! These awards recognize leading and top third-party logistics providers in the industry.
    “These honors recognize Zipline’s leadership in cultivating true supply chain excellence in 2022,” said Lynch, “We’ve always delivered so much more than a rate and a truck to our clients. As these prestigious awards have recognized, that value will only increase as we climb higher.”
    Still waiting for several other industry award winners to be announced, Zipline’s impressive accomplishments thus far in 2022 may only just be the beginning.
    About Zipline Logistics
    Headquartered in Columbus, Ohio, Zipline Logistics has a 15-year history of being a consistently recognized, rapidly growing, and reliable 3PL that exclusively services the consumer-packaged goods sector. Their uniquely qualified carrier network, world-class team of retail transportation experts, and state-of-the-art shipper intelligence tools maximizes client revenue and gross margin by eliminating out-of-stocks through optimized, on-time in-full performance.
    Zipline’s processes were built specifically to resolve the most critical logistics challenges faced by consumer goods brands shipping into retail. Ninety-seven percent of Zipline orders are destined to land on a retail shelf in stores like Walmart, Costco, Bath & Body Works, Whole Foods, and Best Buy.
    Learn More
    Andrew Lynch is President and co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies, and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third party logistics. 
     
    George Hajjar
    Specialty food makers and buyers surmounted the challenges presented by the COVID-19 pandemic, including those related to stock management, supply chain, staffing, and more. This unprecedented period of time also provided an opening for many within the industry to triumph. SFA interviewed industry professionals as part of its State of the Specialty Food Industry Report, 2022-2023 edition. You can find full video interviews when purchasing this year’s report.
    Following is a list of responses from makers and buyers regarding the opportunities that have precipitated from the pandemic:
    “We actually saw such increased sales when COVID first started, we didn’t even know what to do with ourselves because we were seeing Christmas volumes on steroids.”—Alexandra Groezinger, President, Alexian Pate
    “Fresh really saw the boom when everyone was cooking at home. Specifically in categories like cheese, proteins, and alternative meat because people were seeking out different center-of-the-plate options. Alternative meats have been through the roof in terms of year-over-year growth and just month-over-month growth...It’s going to be interesting to see what happens now that people are going back out to eat.”—Cassy Kehoe, Senior Fresh Category Manager, KeHE
    “Consumers have really formed new behaviors, attitudes, values, what they are looking for out of their foods…it’s really opened the door for natural, organic, and specialty products.”—Jeremy Adams, Senior Center Store Category Manager, KeHE
    “We’ve seen a tremendous amount of innovation in distribution. And we’re seeing this across food service and retail. With the COVID pressures, a lot of smaller guys got squeezed in terms of supply chain and it continues to happen. So, we are seeing disruptive distribution methods…that are filling in those gaps and making sure that the independents and the small guys get reliable ongoing service when it comes to demand, and these players are being very smart with how they leverage technology.”—Julia Stamberger, Co-founder/CEO, Planting Hope Company
    “As a brand, we benefited from COVID by providing a dessert, something that’s indulgent. I think that definitely served us well, especially the online grocery channel.”—Pierre Jamet, Chief Sales Officer, Petit Pot
    Julie Gallagher
    Sandra Archer joined the Specialty Food Association in 1997 as a temp working in the membership department where she showcased new applicants’ products to the admission committee and processed membership applications. Shortly after, she became full time staff working in the finance department as an accounts receivable specialist and now serves as manager of accounts receivable.
    What is your favorite memory, experience, or story from your time with SFA?
    I can say that my favorite experience from my time with the SFA has been fulfilling my obligation volunteering during “Embrace Hunger Relief Months”. I recall volunteering in October 2019 at a Mobile Market in Washington Heights, where we distributed fresh produce to market-goers. The line was so long and as we started to distribute the food, the rain came pouring down on us. We did not allow the rain to stop us from doing what we do best as an association—-helping.
    Where were you born?
    I was born in Jamaica, West Indies.
    What is your fondest food memory?
    My fondest food memory happened to be here at SFA. It was my first time trying stuffed grape leaves at a Lebanese restaurant with my co-workers.
    Do you prefer to eat in or go out?
    Although I am seen as an extrovert by family and friends, the introverted half gets the better of me at times and I prefer eating in.
    Best piece of advice that you’ve been given that serves you well?
    Laughter is the best medicine.
    What is one of the strangest things you’ve ever eaten?
    I’m not known to be a picky eater, however I did find eating cow brain to be interesting.
    What is your favorite food city?
    My favorite city to enjoy food in is the Big Apple! With so much to choose from and the inclusion of so many dishes from different countries, I could never be bored.
     
    Andrew Lynch
    On June 30, 2022, the Supreme Court denied the California Trucking Association’s appeal of California’s AB5. Therefore, the two-year-long injunction will be lifted and AB5 will be law in California retroactive to January 1, 2020.
    What is AB5?
    California’s AB5 requires companies using independent contractors in California to reclassify those workers as employees. 
    This bill was originally designed to regulate companies that hire “gig workers” in large numbers, such as Uber, Lyft, and DoorDash. The bill aims to ensure these types of workers are offered protections and benefits such as workers comp, unemployment insurance, paid sick and family leave, and health insurance.
    In order to be considered a true independent contractor, a worker must satisfy all three requirements of AB5’s “ABC” test:
    A.      The person is free from the control and direction of the hiring entity, both in contract and in fact.
    B.      The person performs work that is outside the usual course of the hiring entity’s business.
    C.       The person is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
    With few exceptions, the relationship between independent truckers and their carriers, brokers, and shippers will be governed by the “ABC” test.
    What Does AB5 Mean for Truckers?
    An estimated 70,000 owner-operators will fail this test and be reclassified as employees instead of independent contractors. This means trucking companies may have to begin paying a base salary and benefits to employees who fail the test, rather than compensating drivers on a per load or contract basis.
    Keep in mind, most truck drivers are independent owner-operators who contract with trucking companies to make deliveries. They individually own their trucks, have flexibility in setting their own schedules, and function as small-business owners rather than large-business employees.
    Paying base salaries, benefits, and payroll tax in order to employ owner-operators is a huge cost that many businesses simply cannot afford. As for owner-operators, this set-up takes away their decision-making power over when and how often they work and the rates they will accept. 
    Alternatives include moving their operations from California to another state or opening their own company.  As most business owners know, the latter comes with much more responsibility and time dedication, which some drivers will not be willing or able to take on.
    A recent FreightWaves survey of carriers found some respondents view the bill as an existential threat to the way American supply chains currently function, while others feel it is a necessary legislative step to prevent companies from taking advantage of workers.
    Although AB5 is currently in effect, not all companies are taking necessary steps to comply with the law. Until the state begins enforcing it or misclassified employees take legal action, not much will change.
    How Will AB5 Affect the Freight Market?
    The timing of this law going into effect is not fantastic.  
    “Gasoline has been poured on the fire that is our ongoing supply chain crisis,” said the California Trucking Association in a statement on June 30, 2022, “The impact of taking tens of thousands of truck drivers off the road will have devastating repercussions on an already fragile supply chain, increasing costs and worsening inflation.”
    Only a few months into AB5 going into effect, we are seeing a driver shortage in California. Long term, the effects may be much greater.
    AB5 may destabilize the trucking market in California, which can create a variety of issues for shippers moving freight in and out of the state. Capacity could suffer a blow if a significant number of truckers decide to leave California. Rates could also rise if carrier expenses increase to compensate drivers as full-time employees.
    California’s giant portion of the logistics industry means the entire country will likely feel its effects.
    There have also been owner-operator protests against AB5 in early July, which halted operations at the ports of Los Angeles and Long Beach. There is a strong likelihood that protests of this nature will continue and cause additional supply chain disruptions in the future.
    Some experts predict that the major, lasting effects of AB5 will become more apparent in early 2023.
    Keep Tabs on AB5 With Zipline
    While it’s currently unclear just how deeply AB5 will affect truckers, shippers, and the supply chain as we know it, Zipline Logistics experts will continue to monitor the market for real time updates and insights.
    We will also continue to put our best foot forward to help shippers navigate the ever-evolving supply chain. Partnering with Zipline means you’ll receive:
    ·       Consistent market updates and insights
    ·       Creative retail logistics solutions
    ·       A dedicated account team available to answer your questions 24/7
    KEEP UP WITH MARKET CHANGES
     
    Andrew Lynch is President and co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies, and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third party logistics. 

     
    George Hajjar
    SFA News Daily readers enjoyed content focused on supermarket industry leaders: Trader Joe’s, Walmart, Wegmans, and Whole Foods over the past month. Following are the top five most read stories in August:
    1. Trader Joe’s Workers Vote to Unionize
    Trader Joe’s workers in Hadley, Massachusetts, voted 45-31 to unionize, making it the first group at the company to successfully form a union, according to the National Labor Relations Board.
    2. Wegmans Staffs Manhattan Store
    Full-time hiring and training ramped up at the market’s second NYC location; most of the 500+ positions will be hired locally.
    3. Whole Foods Announces Inaugural Accelerator Cohort
    The five brands boast a diverse selection of products and will undergo a program providing mentorship, education, and financial support opportunities.
    4. Cold-Brew Coffee, Functional Tea Highlight RTD Category
    The popularity of cold-brew coffee, functional ingredients, and new flavor formulations have driven growth in the specialty ready-to-drink coffee and tea category, according to the SFA’s State of the Specialty Food Industry report, 2022-2023 edition.
    5. Walmart Consolidation Center to Help Smaller Suppliers
    “The Lebanon facility will provide even more opportunities for small to medium sized suppliers who do not ship nationwide [including] the ability to provide product to all 4,700 Walmart stores,” said Mike Gray, senior vice president, supply chain operations at Walmart, in a statement.
    Janet DeCarlo
    Please join the Specialty Food Association’s Membership Team in welcoming the new members listed below who have joined our community in the month of August. We thank these members for their innovation and commitment to the specialty food industry and look forward to getting to know them. 
    Prima Pavé
    Blue Moon Bakery
    Comvita USA
    RENNA SRL
    Caspian Caviar LLC
    Mantis BBQ
    NONGSHIM AMERICA INC.
    T-West Inc.
    Smokin' Bettie's BBQ
    Tea People Ltd.
    NDC Exports (Pvt)Ltd.
    Aiello Italian Specialties
    Davis Mountains Nut Co.
    Fire in the Kitchen Spice Company
    Hampton Farms
    Japan Federation of Soy Sauce Manufacturers Cooperatives
    Lieng Tong Rice Vermicelli Co., Ltd.
    Diamond Bakery Co., Ltd.
    Henriott
    Tianyi International Trade Inc.
    Jindilli
    RCP Foods LLC
    Empty Bowl Queso
    NAIA Natural Products
    Meycov Food USA Ltd
    Sweet Jubilee
    The Denman Island Tea Co.
    Carolina Pickle Company
     
     
     
                                                                                                       
    George Hajjar
    Specialty food makers and buyers share many of the same challenges in today’s business environment, especially issues around staffing, supply chain, production, and inflation. We interviewed several industry professionals as part of the recently released annual research, State of the Specialty Food Industry + 10-Year Category Tracking and Forecasts. You can find full video interviews when purchasing this year’s report. 
    Following is a sampling of responses from makers and buyers regarding the challenges and bottlenecks that are causing the largest headaches. 
    “[With regards to supply chain] we’ve managed okay, but it just seems like at every corner we’re dealing with playing whack-a-mole with something not being available.”—Jon Pruden, CEO, Taste 
    “The high costs of everything are a challenge for us. We’re a small manufacturer, we’re not the Krafts and the Mondelez of the world, we’re Alexian Paté. The challenges of higher costs are tough, the command for higher wages, higher prices of raw materials and packaging, the availability and lead times … the biggest [issue] is lead times and being able to put through price increases. We are looking at 60- to 90-day windows where our customers will allow us to do a price increase. For a small company that’s very scary.”—Alexandra Groezinger, president, Alexian Paté 
    “We’re not going to increase price but we’re seeing our margin eroding right now. Our packaging cost is +30 percent, raw materials, on average is +10 percent, and in total that’s an increase of the cost of goods sold around 15 percent. Right now, that’s not being offset by anything.”—Pierre Jamet, chief sales officer, Petit Pot 
    “All the supply chain stuff that’s troubling for brands is absolutely hitting us on the buy side. And we work with a logistics partner for our warehousing, and they are certainly experiencing the labor crunch that the rest of our industry has.”—Kate Harper, chief brand curator, Hive Brands 
    “Our biggest challenge right now is understanding the next phase of product availability and how macro things will impact that. So, we are still seeing bottlenecks in the supply chain both from imported product and some domestic delays … a lot of our cheese suppliers are having to short product, and I think a lot of that is due to the war and the aftermath of COVID.”—Cassy Kehoe, senior fresh category manager, KeHE 
    Andrew Lynch
    Shipping to Amazon? You’ve come to the right place.
    We’ve broken down what working with Amazon looks like for both first-party and third-party sellers (more info below) and how sellers can most effectively optimize their Amazon supply chain, and in turn, profitability with Amazon overall.
    Are You a 1P or 3P Amazon Seller?
    It is almost a “must” for any business to sell on Amazon these days. In a world where consumers log on to Amazon to buy items that were out-of-stock at the store, selling on Amazon helps companies stay competitive and win market share.
    Firstly, shipping into Amazon looks a little bit different depending on if you are a first party (1P) or third-party (3P) seller.
    1P Sellers
    To be a 1P Seller, you need to be invited by Amazon directly. In this set up, Amazon acts as the retailer and the seller operates as a wholesale supplier. Sellers receive bulk purchase orders and pay a flat fee for Amazon to entirely take over the selling process. After the seller ships their product to Amazon, Amazon gains complete control of the product’s pricing and promotion. Overall, it’s a hands-off set up for the seller.
    1P sellers typically ship full truckload to an Amazon distribution center. Amazon also offers customer pick-up (CPU) for 1P sellers – but more on that later.
    3P Sellers
    3P sellers act as the retailer and have more control of their operation overall. The seller lists and sells products directly to consumers via the Amazon marketplace, with full control over pricing and promotion. 3P sellers have a few options for how they can ship to customers, but most often use Fulfillment By Amazon (FBA). FBA is an Amazon service that provides storage, packaging, and shipping assistance to sellers. 
    Technically, companies can act as both a 1P and 3P seller. We’ve had clients receive Amazon purchase orders (POs) for certain products while simultaneously acting as a 3P seller of their remaining inventory.
    Shipping to Amazon
    Amazon is notorious for being a challenging receiver to work with. Delivery appointments book up very quickly and can be cancelled within 24 hours of your designated delivery window, sometimes when trucks are already enroute. 
    For information on pallet requirements or how to prep Amazon shipments for delivery in general, Amazon has detailed shipment guidelines listed on Seller Central for both Amazon Distribution Centers and FBA centers. 
    Otherwise, here’s what you need to know about shipping to Amazon:
    1. Amazon appointments book up fast.
    Usually, you won’t be able to get an appointment closer than five days after the booking date. This means maximizing lead time is crucial.
    2. Amazon requires shippers to meet at least a 90 percent OTIF.
    Amazon keeps tabs on missed or late appointments. If sellers do not meet or exceed a 90 percent on-time in-full average (OTIF) rate, this gives Amazon grounds to give up their appointment to someone else or boot the seller off the portal altogether. 
    If a carrier misses their scheduled appointment by 30 minutes or more, the freight will be refused at no cost to Amazon. In most situations, the seller will be held responsible to eat that cost.
    3. Amazon charges a fine for shipments that don’t meet OTIF.
    For example, Amazon orders 20,000 cases of a 1P seller’s product but the seller only ships 18,000 cases. The seller will then be charged a fine for not arriving in-full. If the order shows up late or not at all, the seller will be charged an additional fine for not being on time.
    4. Amazon is known to cancel appointments less than 24 hours in advance.
    Amazon has cancelled appointments while our carriers is already enroute to their DC. If this happens, there are two possible routes of action.
    First, the carrier could hold the freight for a layover fee, which is usually between $150-$500 per day. The other option is that the carrier could drop the load at their hub and another carrier would be sourced to recover it. This means the seller would then be charged the cost of two separate carriers.
    Neither are fantastic options, especially if you need a shipment to arrive ASAP.
    5. Amazon is extremely difficult to contact.
    Amazon has grown into the giant that it is in a very short time. Somewhere along the way it’s become incredibly difficult to contact anyone working inside the distribution or fulfillment centers. This makes problem-solving very difficult when issues arise, which can lead to further delays and charges. 
    6. Amazon shipment numbers are important.
    When booking freight and making an appointment, sellers will receive an ASN (or PRO) number from their carrier and a confirmation number from Amazon. These numbers are what Amazon uses to track the shipment. Without them, Amazon can apply chargebacks to the shipment or even refuse to accept it once it arrives. Sellers must ensure they receive this number with each order so they can fight back against any unwarranted chargebacks.
    Sellers will also need to confirm this number ahead of time with Amazon. If this step is missed, it can cause inbound, processing, or stock issues, possibly resulting in extra fees sellers must pay or fight.
    Amazon CPU
    Amazon offers customer pick-up (CPU) for 1P sellers. A CPU arrangement means Amazon will pick up the seller’s freight instead of the seller outsourcing a third party.
    Sellers can book an Amazon-partnered carrier using Amazon’s seller portal, which will either be a truck from Amazon’s own fleet or another carrier depending on availability and pickup location. This all sounds well and good, except for one issue: Amazon-partnered carriers have been known to frequently miss pickups without any communication or warning.
    So, the seller’s freight is staged and ready to go, but nobody shows to pick it up. Since warehouses are already tight on space, they can’t afford to have the freight sit staged and untouched for very long. This means the shipment will have to be restacked and put back into storage – and the seller will get charged a penalty for all the extra fuss, not Amazon.
    This is a common theme with retailers who use CPU delivery models. At Zipline, we normally suggest avoiding these set-ups altogether for this reason.
    CPU arrangements sacrifice all control of shipments but still hold the seller responsible for anything that goes wrong. The outcome is usually extra fees, delays, and headaches in getting the freight moved. 
    Make Shipping to Amazon Seamless
    Since Amazon isn’t exactly easy to work with when it comes to transportation, it’s important to control the controllables of your supply chain wherever you can. The good news is, with a retail-specialized third-party like Zipline Logistics, that part is made easy.
    Our uniquely qualified carrier network, world-class team of retail transportation experts, and state-of-the-art shipper intelligence tools maximize client revenue by capturing market share through optimized, on-time in-full performance.
    Zipline processes were built specifically to resolve the most critical logistics challenges faced by consumer goods brands. We tailor strategies to reduce overall transportation spend, optimize logistics performance, and beat out the competition for market share.
    Shipping to Amazon?
    LET US TAKE YOU THERE
    Andrew Lynch is President and co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies, and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third party logistics. 

    Julie Gallagher
    Learn more about the people and products in these Q&As with Specialty Food Association member companies.
    What does your company produce?
    Handcrafted chutneys designed for hot and cold meats and cheeses.
    Did you have a food background before launching your company?
    I grew up in the 70s in an international home learning to cook dishes from all over the world. It was there that I was inspired to learn and share our deeper connection to culinary culture. After raising four children, I jumped into the food industry, learning from local chefs and entrepreneurs. In 2017, Locally Seasoned was launched, teaching cooking classes and providing personal chef services.
    How did the idea for your product/company come about?
    In March 2020, every business hit a brick wall and faced some of the biggest challenges of our time. We were catering at the time and all of our bookings were cancelled indefinitely. Locally Seasoned would have to pivot to succeed. It became clear that we needed to offer products for sale in local stores, markets and online to sustain our future. We focused in on those unique pantry items we always created for our clients, like chutneys, pickles, spice mixes, vinaigrettes, and marinades.
    Why did you get involved in specialty foods?
    It can be difficult in a rural area to find like-minded foodies. In searching online for gourmet pantry products and specialty foods, I found the SFA.
    What is your favorite thing about the specialty food industry?
    The textures. The flavors. The ingredients. The stories and cultures behind each dish. The energy of the food community.
    What’s the one piece of advice you’d give a new specialty food business?
    Breathe. Give yourself some grace. The entrepreneurial journey to success looks more like a preschooler’s angry scribble than an architectural drawing.
    If you weren’t running a food business, what would you be doing?
    Puttering in the garden, foraging, hiking, and cooking for friends and neighbors. I would be listening to loud music, personal development podcasts, and audiobooks.
    What does specialty mean to you?
    Specialty foods provide the recipe to help us discover our history, stir joy into the present, and finish with hope for the future. They remind us of just how strong and resilient we can be because life is worth tasting!
    Janet DeCarlo
    Please join the Specialty Food Association’s Membership Team in welcoming the new members listed below who have joined our community in the month of July. We thank these members for their innovation and commitment to the specialty food industry and look forward to getting to know them. 
    Kirlioglu Tarimsal Urun. Gida Ins. AS
    Knipschildt Chocolatier
    The Boneless Butcher, LLC
    True Natural Taste
    Ytc Studios
    Nettle Creek Foods, Inc.
    RL Food Testing Laboratory, Inc.
    Freeze Nums
    Chakalaka Brands
    Que 42
    Acetaia Malpighi
    African Bronze Honey Company
    Catalina Snacks Inc.
    Truffle Dog Company
    EHO FOOD
    Kobayashi Noodle Co., Ltd.
    MAGIC BITES- TASTE OF MEDITERRANEAN
    Veronica's Health Crunch, LLC
    CrimsonCup Coffee & Tea
    Gutsy Inc
    Brightland
    El Patio CPG, LLC
    Renegade Foods
    Simply Spanish
    Hanuman Chai,LLC
    Jinka
    Rooted Food Sales
    Sidari Artisan Brands
    The Southern Art Company, LLC
    Olyda
    KIN DEE TRADING Co., Ltd.
     
    Denise Purcell
    In collaboration with the Food Institute, the Specialty Food Association held a live broadcast from the Summer Fancy Food Show to highlight activity during the event. Interviews included buyers, exhibitors, SFA staff, award honorees, education program speakers, SFA Trendspotter Panel members, and others.
    Veteran TV journalist Susan Choi, Food Institute’s director of digital media, served as anchor. Choi has previous experience working at ABC News and NBC News.  A team of reporters conducted live interviews from different Show locations including special pavilions.
    Here are some highlights from the interviews. You can go to the SFA Feed to watch these interviews plus the full livestreams.
    “Those fundamentals—strong margin, good team, cash for runway—were true in 2018 and are even more true now.”
    -Alison Cayne, Haven’s Kitchen, on advice for building a company during a crisis
    “I never went into it for an honor. It was really about giving back and helping a lot of young companies who didn’t know how to enter the market.”
    -Lou Foah, SFA Hall of Fame honoree, on industry service
    “Passion and a great amount of stamina—you’ll be working at your business 24 hours a day sometimes.”
    -Kathrine Gregory, SFA Leadership Award winner, on what it takes to succeed
    “Consumers don’t exist in a vacuum. They are dynamic, so it’s going to be a little but of everything. You may start the day with something healthy but you leave room for indulgence later.”
    -Melanie Bartelme, SFA Trendspotter, on the balance of health and functional food trends
    “The specialty food industry is still robust and exciting and everything it takes to be a thriving business has gotten more complex, harder, and more expensive.”
    -David Lockwood, co-principal of SFA’s State of the Specialty Food Industry research, on this year’s biggest takeaway
     
    Andrew Lynch
    A Recipe for Shelf Space Competition
    Mix two years of the global pandemic with constant supply chain disruptions. Then add a dash of one thriving ecommerce marketplace and a sprinkle of skyrocketing demand for consumer-packaged goods. Lastly, stir in retail buyers and compliance programs until fully combined. The result? The greatest opportunity to capture and expand retail shelf space in CPG history.
    Not only does this complicated concoction make it difficult for brands to get their product in stores on time, but it’s also costing retailers big money. Recent data from the National Bureau of Economic Research reported stockouts reached up to 20 percent last year, compared to an average rate of 8 percent pre-pandemic. That totaled to $82 billion in missed CPG sales during 2021. Sheesh.
    Brace yourself for more bad news: customer loyalty can no longer be relied upon as a fallback here. Believe it or not, 79 percent of consumers reported they have tried new brands because their preferred brand was out of stock. At Zipline, we call this involuntary sampling: a phenomenon that can be extremely detrimental to CPG brands.
    For retailers, losing both loyal customers and their dollars calls for drastic measures.
    Retailers have increased their expectations of brands’ delivery performance to combat stockouts, slamming late arrivals with fines to improve on-time and in-full delivery. Fees piling up aren’t the only problem brands face when they can’t meet expectations. One retail buyer told us, “If a supplier is out of product, it will be replaced with a competing brand.” 
    For more takeaways revealed by our buyer survey for which Zipline Logistics worked with 900+ retail buyers, read on. 

    2022 Retail Buyer Insights
    To better understand why certain products get on shelves over others and how CPG brands can stand out in the competitive market, we asked the people who make that decision daily: retail buyers. Our connections belong to some of the biggest retailers and distributors in the game: UNFI, Costco, KeHe, Giant Eagle, and Target, to name a few.
    Importance of Communication and Meeting On-Time Delivery
    Communication and reliable fulfillment: without these two things, most buyers are saying “see ya.” In fact, 90 percent say a supplier’s ability to deliver product on time impacts their purchasing behavior of that brand and 66 percent have ended relationships with suppliers over delivery issues.
    Delays are inevitable in logistics, but how you communicate and work through them is make or break. Retailers want to work with the brands who give them the most visibility and transparency.  Ninety three percent of buyers report having anywhere from 4 to 20 product choices within a given category – so there’s nothing keeping them from booting a brand that doesn’t offer this.
    Impact of COVID-19
    We asked our buyer network about any changes in their category out-of-stock rates, which already account for stocking alternative brands to fill empty shelf space. Seventy-six percent of buyers reported that out-of-stocks in their category increased because of the pandemic. Historically, most retail buyers were seeing average out-of-stock rates below 6 percent, but more than half of our network saw this rate jump up to 11 percent or higher throughout the pandemic.
    Over half also said it impacted the number of competing brands in a category. “Out-of-stocks have pushed more variety per category which forces more competition and more congestion,” one buyer said.
    The big themes reported in this year’s survey remain consistent with what we’ve seen in years past, but the aforementioned challenges brewing in the market have only made on-time delivery and communication that much more essential to win shelf space.
    Secure Shelf Space with a Trusted Logistics Partner
    Although the market is whipping up severe competition, it smells of opportunity. That is, if you understand how optimized supply chains create value. Successful CPG brands are those that invest in logistics and find partners that can execute against strict retail compliance requirements. Zipline Logistics has all the ingredients to help your brand meet on-time delivery, stay on retail buyers’ good side, and get your product on the shelf.
    Zipline Logistics is the Official Shipping Partner of the SFA. Our uniquely qualified carrier network, world-class team of retail transportation experts, and state-of-the-art shipper intelligence tools maximize revenue and gross margin for consumer brands by eliminating out-of-stocks through optimized, on-time in-full performance.
    We tailor strategies to reduce overall transportation spend, optimize retail performance, and beat out the competition for shelf space. Ninety-seven percent of our orders end up on the shelves of retailers and distributors such as Walmart, Costco, UNFI, KeHE, and Kroger.
    LEARN MORE
    Andrew Lynch is President and co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies, and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third party logistics. 
    George Hajjar
    Stories that resonated with SFA News Daily readers last month ran the gamut of topics, from social and political conflicts and resolutions to cybercrime. Following, in order of popularity are the five most read articles in July: 
    1. Canada Mandates New Nutrition Symbol
    To give Canadians clear and easy access to information on foods found in grocery stores, the government of Canada debuted a new front of label nutrition symbol that will help Canadians identify foods high in saturated fat, sugars, and/or sodium.
    2. Russia, Ukraine Sign Grain Export Agreement
    Russia and Ukraine signed an agreement on Friday, June 22 to begin shipments of grain that Russia has blockaded in the Black Sea, easing a global food crisis that has especially impacted countries in Africa and the Middle East, which rely heavily on the Ukrainian export.
    3. Walmart to Purchase 4,500 Electric Vehicles for Last-Mile Deliveries
    Walmart agreed to purchase 4,500 all-electric delivery vehicles from Canoo, beginning with its Lifestyle Delivery Vehicle, with the option to purchase up to 10,000 units.
    4. H-E-B, Butt Family Commit $10M to Build Elementary Campus in Uvalde
    H-E-B and the Butt family, which founded the chain, have announced a $10 million commitment to help build a new elementary campus in Uvalde, Texas following the Robb Elementary School tragedy.
    5. Cybercrime Wreaks Havoc on Restaurants
    Fake one-star Google restaurant reviews have terrorized dozens of locations across the U.S., ranging from humble shops to Michelin star venues. These reviews are often followed up by emails asking for payment to have the post taken down.
    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.
     
    George Hajjar
    The SFA’s Maker Prep webinar series is designed to educate new startups, providing them with the building blocks and knowledge base needed to do business in the specialty food industry. The topics in this series vary, covering every aspect of the industry.
    Here is a sampling of information shared at some recent webinars. You can click through to find the full recordings, which are free to SFA members.
    “Certifications open up your marketplace in many ways…and tell your consumer and your buyer why your specialty food may be even more special."—Kantha Shelke, Understanding Regulations, Certifications and Licenses
    "No one wants to spend a lot of energy and take a lot of risk setting up a new product and have it fail."—Scott Zoeller, Selling to Supermarkets
    "It’s important to evaluate how you look at various aspects of the food chain to get a maximum competitive advantage. Because at the end of it all it’s actually the advantage that sets you apart from your competitors."—Kantha Shelke, New Product Development: Optimizing the Food Value Chain to Maximize Your Competitive Edge
    "80% of consumers purchased something after having seen it recommended by an influencer. That is a huge number, and a reason why influencer marketing should be a part of your toolbox."—Rachel Kay, Igniting an Integrated Paid and Earned Online Media Program to Support Your E-Commerce Business
    "[Working with a co-packer] is truly a marriage between two companies. I think that’s an accurate description of how you can approach a partnership with co-packing: you’re not tied to it for life necessarily, but this is something that if you are going to approach it, it needs to be a strong relationship."—Ashley Sutterfield, Understand your Production Options and Choose your Path
    Maker Prep webinars can be viewed live or recordings can be downloaded any time. Here is the webinar schedule for the month. And to ask questions or continue the conversation, you can go to this forum.
     
    Andrew Lynch
    Coming off an extremely oscillating previous quarter, there were many predictions floating around on how Q2 of 2022 would shake out for the shipping services market. Some experts predicted a huge market downturn and trucking bankruptcies galore. Although that hasn’t necessarily been the case, the possibility still looms.
    Freight Market Update
    Graph Source: FreightWaves SONAR
    Heading into Q3, carriers without dedicated contracts are struggling to find freight. Volumes and tender rejections are trending down and rates have decreased 20-25 percent since last quarter. Some small carriers have had to close up shop temporarily because they are only breaking even on loads.
    The less-than-truckload transportation market is also softening into Q3. Volumes and capacity are seemingly balanced right now, thanks to major labor shortages finally resolving. Zipline Logistics’ LTL experts believe current rates should remain consistent, but LTL is never perfect. Shippers should anticipate and prepare for delays regardless.
    These are the ripple effects of consumer mindsets shifting, combined with global events.
    For many Americans, disposable income is being redirected to travel and entertainment once more rather than home goods. Not only that, but everything under the sun is more expensive to buy than usual. In May 2022, U.S. inflation rates hit 8.6 percent – the highest since 1981. The price of diesel in the U.S. hit a record high average of $5.718/gallon as of June 13, 2022. It’s sitting at $6.887/gallon on the West Coast.
    Russia’s invasion of Ukraine has dealt an additional blow to the global economy—weakening post pandemic recovery and aggravating already-high inflation.
    New subvariants of COVID-19 continue to emerge. Some experts are saying these variants have the strongest transmissibility yet and are escaping immunity from past infection and the vaccine. Although major U.S. economic shutdowns seem to be a thing of the past as the virus has become our “new normal,” these variants can take out groups of people on the job at one time and create major supply chain inefficiencies.
    Retailers are dealing with insane amounts of overstock right now, as consumer mindsets shift away from purchasing consumer goods. But even in a soft freight market, retailers are still being picky with the brands they choose to work with. In a survey of retail buyers, 90 percent said a supplier’s ability to deliver on time impacts their purchasing behavior of that brand and 66 percent have ended relationships with suppliers over delivery issues. Brands who give retailers the most communication, visibility, and transparency will get priority on the shelf.
    Q3 Outlook

    Graph Source: FreightWaves SONAR
    As of July 2022, Zipline experts predict volumes and rates will continue trending down in most parts of the U.S. until October 2022 when holiday shopping begins.
    For the foreseeable future, experts also predict inflation rates and diesel prices will continue to climb. The good news is, the government is stepping in to help as of June 22, 2022. President Biden called on Congress to suspend the federal gas tax for three months to provide direct relief to American consumers. He is also calling on states to take similar action, whether by suspending their own gas taxes or helping consumers in other ways.
    Regardless of all this, produce season is in full swing. There are two separate trucking markets we will discuss below: dry van and reefer. The dry van market refers to trucks transporting dry goods, like chips or canned foods. The reefer market refers to trucks transporting goods that must be temperature controlled, like milk or meat.
    Congested dry van markets currently include Southern California, Texas, Louisiana, Mississippi, South Carolina, and Georgia. Congested reefer markets include the Southern border of the U.S. is super-hot as well as the majority of the Southeastern U.S.
    Rates picked up a bit at the beginning of the produce season but have otherwise consistently declined. At the end of Q1, the rate per mile was sitting around $3.30 and is now hovering around $2.82 at the end of Q2. Also important to note: contract rates are higher than spot rates in both the dry and reefer markets.
    Lean on Logistics Partners to Navigate the Freight Market
    Regardless of an always changing freight market, CPG suppliers focused on logistics partnerships rather than freight transactions will be the real winners in 2022. Believe it or not, there are still many aspects of your supply chain that you can control with industry experts on your side. 
    Zipline Logistics is the Official Shipping Partner of the SFA. Our uniquely qualified carrier network, world-class team of retail transportation experts, and state-of-the-art shipper intelligence tools maximize revenue and gross margin for consumer brands by eliminating out-of-stocks through optimized, on-time in-full performance.
    We tailor strategies to reduce overall transportation spend, optimize retail performance, and beat out the competition for shelf space. 97 percent of our orders end up on retailer’s shelves such as Walmart, Costco, UNFI, KeHE, and Kroger.
    LEARN MORE
    Andrew Lynch is President and co-founder of Zipline Logistics, an award-winning North American 3PL that specializes exclusively in the transportation of retail consumer goods. He works alongside clients ranging from some of the largest food and beverage businesses in the world to the brightest up-and-coming CPG brands in North America. Lynch and his team leverage data intelligence and strong industry relationships to help clients uncover transportation savings, build scalable supply chain strategies, and ace retailer compliance programs. Starting his career in carrier procurement and management within a Fortune 100 logistics company, Lynch has held positions of responsibility in all areas of third party logistics. 
      
    Denise Purcell
    The SFA’s newly released State of the Specialty Food Industry + 10-Year Category Tracking & Forecasts, 2022-2023 edition, digs into the current business environment. Following are four insights and takeaways from this year’s research.
    The Supply Chain’s Impact on Growth
    The parts of the industry that will grow in the next few years in part hinge on supply chain bandwidth. Makers continue to report they are unable to properly forecast their sales because they often don’t know what their supplier shipments will look like. Lead times for shipments fluctuate, too, causing production schedule delays. All of this influences how makers formulate their products, as they evaluate which SKUs they can confidently produce, made with ingredients they can reliably source and price properly to achieve profit despite increased raw material costs. And once they have products ready for retail, they’re further challenged by shipping logistics, as the trucking industry faces its own issues with short-staffing and rapidly rising fuel costs.
    BIPOC- and Women-Owned Brands in Demand
    Consumers want more BIPOC-, Black, and women-owned brands and retailer buyers and foodservice operators are seeking out incubators, brokers, b2b wholesalers and distributors, and even sales consultancies that specialize in supporting and growing these brands. Showcasing these brands has moved far beyond seasonal features to align with observed months like Black History or Women’s History, and will continue to expand.
    The Next Retail Formats
    The pandemic gave retailers insight into store formats shoppers want next and smaller footprints with minimal human contact are in demand. Expect fast growth of these formats among traditional grocers, who are also reintroducing areas since the COVID scale back with new ideas. For example, redesigned sets like salad bars that are smaller and less labor-intensive and more grab-and-go opportunities. Ghost kitchens and mini fulfillment centers will be prevalent as well. And convenience stores are well-placed to do more ready-meals and foodservice. On the flipside, businesses that were built around high-touch, personal experiences to build loyalty and trust are struggling with the rising demand for convenience, pickup and delivery. They are fulfilling their customers' needs but wonder if it weakens their original position.
    Specialty eCommerce Targets
    In 2019, specialty ecommerce sales amounted to about 4.5 percent of all specialty retail sales. In just two years that share doubled to 9.4 percent, and it will expand further over the next several years, though not so rapidly. By 2023, specialty ecommerce will account for 11.6 percent of all specialty retail sales. For many makers or retailers that sell specialty products, these numbers can be a benchmark for their own goals with specialty ecommerce. Brick-and-mortar retailers ideally should be reporting online sales at roughly the same share percentages as noted above. Likewise, makers that sell their products in ecommerce, whether it’s DTC, or through Amazon or other online avenues in brick-and-mortar retail, should ideally be seeing an online sales share approximate 9-12 percent of their total retail sales in 2021-2023.
    Plant-Based Challenges
    The overall plant-based specialty retail market grew 6 percent, exceeding $7.7 billion in 2021, after stellar 26 percent growth in 2020. Plant-based growth has outpaced the entire specialty retail market, which grew 4 percent in 2021 and 20 percent in 2020.  However, some plant-based categories were among 12 total that grew specialty sales slower than the entire market in 2021. These include Yogurt and plant-based yogurt; Tofu; Creams and creamers (Shelf stable); Plant-based milk (Refrigerated); and Plant-based milk (Shelf stable).  A given category’s degree of maturity, innovation opportunities and in some cases, vulnerability to other emerging category adjacencies may cannibalize sales in specialty. The largest growth gap is with Plant-based meat alternatives (Refrigerated). It grew 34 percent in specialty but 66 percent in the total market. Historically, this category has been composed of 97 percent specialty items, but it changed in the last three years and now non-specialty items are contributing to much of the growth.
    Specialty Beverages Grow Faster than Food
    During 2020’s initial height of COVID, specialty food grew faster (21 percent) than beverages (16 percent), but that shifted in 2021 as specialty beverages grew twice as fast as food. It comes down to consumers seeing certain products as critical, and others as discretionary. In this instance, food was more a consumer priority during the initial phases of COVID but over time, consumers expanded their shopping lists to include more specialty beverage purchases. RTD alcoholic beverages like hard seltzer, hard kombucha, and fermented functional cocktails, in particular, are growing rapidly.
    Opportunities in Perishables
    New this year, we took a closer look at specialty perishables sales, which are expected to reach nearly $33.5 billion in 2022. Perishables (random weight, non-UPC’d specialty items sold in bakery, cheese, deli, meat, and seafood sections) are critical to specialty, both in scale and as a good source of growth. For specialty retailers, perishables departments represent enticing, creative merchandising and execution. Plus, they are important centers for emerging food and beverage innovation that may eventually migrate to packaged goods categories.  
           After being challenged by shutdowns during COVID, perishables can expand to better meet consumers’ needs for hot, ready-to-eat or take-home, heat-and-eat fresh meals; meal kits; sandwiches, side dishes, and salads; breakfast foods; confections and desserts; and hot and cold beverages. But retailers must adapt post-pandemic as many consumer prefer to buy sealed, pre-packaged products (even those prepared in-store), which they perceive as fresher and/or safer. 
    The new State of the Specialty Food Industry research is available for purchase here. SFA members receive discounted pricing.
    Julie Gallagher
    Learn more about the people and products in these Q&As with Specialty Food Association member companies. 
    What does your company produce? 
     Pistachio butter. 
    Did you have a food background before launching your company? 
    No, this is my first time launching my brand and product. I am, however, a health enthusiast and am passionate about food and the food industry. 
    How did the idea for your product/company come about? 
    I founded Seed & Shell with the belief that we can all harness the seeds of potential within us and break free from our shell of self-limiting beliefs to achieve our dreams. In 2019, my mom brought me a gift of pistachios following a family health scare. Pistachios became my snack that got me through those difficult times while I was in the midst of struggling to meet the demands of both my personal and professional life. I knew I could rely on them for their nutritional benefits and also to keep me satisfied.  
    Inspired by my love for pistachios, which are (technically speaking) seeds, and not nuts, I founded Seed & Shell so others could enjoy pistachios in a fresh, new way (like with our pistachio butter). While my initial purpose was to spread awareness to the amazing health benefits of pistachios, I realized along the way that Seed & Shell represented a challenge to myself for personal growth. 
    Why did you get involved in specialty foods? 
    As a foodie and health food enthusiast, I personally am a big fan of specialty foods. They have always been an important part of my lifestyle and my dietary preferences, and I love the fact that so many specialty food brands exist to make a difference in people's lives by bringing new and exciting foods to the market. 
    What is your favorite thing about the specialty food industry? 
    The selection of high-quality and new products that specialty food brands bring to the table. 
    What is one piece of advice you’d give a new specialty food business? 
    Enjoy the journey. 
    If you weren’t running a food business, what would you be doing? 
    I couldn't even be thinking of anything as meaningful that I would be doing with my time other than running my business. I am truly passionate about my company. 
    What does specialty mean to you? 
    Specialty food means being the risk taker of the food world. 
    Julie Gallagher
    How long have you been with SFA and tell us about what you do?
    I’ve been with the SFA for 3 months. I am Bill & Lysa’s Executive Assistant.
    What is your favorite memory or experience from your time with the SFA? The Summer Fancy Food Show. It was amazing to see it for the first time, and I loved being able to engage with the members.
    Where were you born?
    Matawan, NJ
    If you could only pick 3 foods to eat for a month, what would they be?
    Pasta, Chicken & Broccoli
    What is your fondest food memory?
    Every year around the holidays all the ladies in my family get together and bake cookies, and it is one of my favorite traditions.
    Do you prefer to eat in or dine out?
    It depends on who is doing the dishes! (Which is usually me) So I’ll go with dine out!
    Best piece of advice you have been given and has served you well?
    Don’t make decisions when you’re angry
    What is the strangest thing you’ve eaten?
    Alligator Tail
    What is your favorite food city?
    Charleston, South Carolina has delicious food and some of my favorite restaurants.
    If you didn’t have to work for a living, what would you do?
    Travel around the world, I love to explore new places.
    Where is your favorite place that you have traveled to?
    Costa Rica 
     
    Denise Purcell
    The specialty food market has prospered amid two difficult years. According to SFA’s newly released State of the Specialty Food Industry research, the market hit $175 billion in retail, foodservice, and ecommerce sales is 2021 and continues to grow at a faster rate than all food.
    Growth will continue but at a much slower pace than the industry experienced in the 2020 stay-at-home whirlwind of grocery shopping and at-home meal preparation. The market faces well-known challenges due to inflation’s role in pushing food prices, supply chain difficulties, fuel cost increases, packaging shortages, and shipping issues. Growth over the next few years depends heavily on shifts in these challenges and supply chain bandwidth.
    In the Summer issue of Specialty Food magazine, you can discover the highlights from this year’s research, such as sales and forecasts in key segments, fastest-growing categories and subcategories, and COVID’s impact on category sales. In addition to a deeper dive into all this data, the full 112-page research— available for purchase in the specialtyfood.com Learning Center—also details key trends driving opportunities and decision-making in the market. Here is a preview of some:
    Home cooking and baking slows as COVID subsides. As COVID took hold in 2020, consumers returned to kitchens in full force. Up until then, consumer food spending had been pretty evenly split between groceries versus at restaurants, but tilted heavily back on groceries almost overnight, with specialty benefitting from the shift. Fast-forward through 2021 and dollar sales growth in various cooking/baking categories has taken a turn, giving back much of the 2020 COVID gains. But unit sales through April 2022 are strengthening, suggesting that home cooking/ baking will remain a long-term trend but not nearly as strong as the pandemic-influenced phenomenon.
    Collaboration carries the industry forward. Supply chain challenges necessitated long overdue SKU rationalization, not only among makers who have pared down production to essential products, but also retailers who are more cautious than ever about bringing in new products. The impetus is on makers to innovate with far more thought, R&D, and investment. Innovation centers, incubators, and culinary kitchens are ramping up efforts to help producers design, package, and create products that will make their way into specialty retail.
    BIPOC- and women-owned brands in the spotlight. Consumer desire for brands from Black, indigenous, and people of color (BIPOC)- and women-owned companies is skyrocketing. According to the State of the Industry’s companion research, Today’s Specialty Food Consumer, published in September 2021, 17 percent of specialty food consumers say they buy specialty food “to support diverse suppliers (e.g., women-, Black-, BIPOC-, LGBTQ+-, veteran-, disabled- owned companies).” Meanwhile, 22 percent of SFCs said they prefer to shop in stores that feature these types of brands/products.  
    Increasingly incubators,  distributors, and brokers are specializing in supporting diverse-owned brands. Retailer and foodservice operators are also seeking out a broader diversity of brands. Target launched its Racial Equity and Change program with plans to spend $2 billion+ with Black-owned businesses by 2025. Pop Up Grocer featured a Washington, DC spot to highlight brands that are women-owned, BIPOC- and queer-owned, and/or local. Many specialty retailers, such as PCC Natural Markets, are retooling their mission to address Justice, Equity, Diversity and Inclusion, which is translating to product assortment in stores.
    To learn more about The State of the Specialty Food Industry + 10-Year Category Tracking and Forecasts, 2022-2023 Edition,  look for upcoming information about our webinar on July 21.  
    Denise Purcell
    The SFA’s Regulatory Update webinar series is designed to educate and inform about the latest legal and regulatory updates around food production and distribution. Hosted each month by Jeni Lamb Rogers, associate general counsel of supply chain at Branded, the webinars cover such topics as Standards of Identity, food safety, labeling claims, and FDA regulations.
    Here is a sampling of information shared at some recent webinars. You can click through to find the full recordings, which are free to SFA members.
    “Although there is the common perception that they are outdated and irrelevant, the Standards of Identity still matter and can have legal consequences. They are most relevant to products or ingredients like cheeses, macaroni and noodles, fruit butters, jellies, preserves, cacao, sweeteners, salad dressings, and flavorings.—FDA Action to Modernize the Standards of Identity
    A Shared Facility Declaration won’t prevent a recall if the allergen ends up in the product, but it could be used as mitigating evidence in a lawsuit because you attempted to provide a warning. Furthermore, it’s really about deterrence.—Are You Recall Ready?
    The first step that a company should take is to create an internal health hazard evaluation, which should happen one to two hours after the discovery of an issue. Then, outside counsel should be engaged, typically within a business day.—Advanced Topics in Food Allergen and Gluten-free Labeling
    In the FTC’s eyes, an influencer’s endorsement is the same as a consumer testimonial, meaning it must comply with the same standards. The endorser of a product must have actually tried it, as well as been honest in their review of it. The influencer cannot make claims about the product that would require substantiation that the company doesn’t have, such as health or environmental benefit claims.--Influencer Marketing Compliance  
    Regulatory Update webinars can be viewed live or recordings can be downloaded any time. Here is the webinar schedule for the month. And to ask questions or continue the conversation, you can go to this forum.
    Lysa D Teal
    SFA is proud to announce a partnership with (included)! The (included) membership collective is for BIPOC (Black, Indigenous, and People of Color) executives in CPG who are dedicated to one another’s success, who advocate for diverse representation, and who commit to amplifying BIPOC voices and brands. (included) has a membership of approximately 70 BIPOC-owned CPG companies that are actively looking for ways to expose their brands and products to top-tier buyers. 
    The Specialty Food Association is likewise committed to fostering a diverse, equitable, and inclusive community of specialty food makers, buyers, and consumers. This partnership presents an opportunity to break down the traditional barriers of entry to the specialty food trade by promoting BIPOC-owned businesses at the SFA’s Fancy Food Shows, where we attract and engage audiences in trade, and educational and networking events to help grow their business and advance the consumption of specialty food.  
    Our first collaboration together will be at the Summer 2022 Fancy Food Show. We are happy to have 10 (included) companies become members of the SFA and these 10 companies will exhibit in the (included) Pavilion (booth #935).  This partnership will introduce BIPOC-owned companies to the Fancy Food Show and the specialty food buyer community and, in turn, function as a new channel for membership growth and diversity for the SFA.   
    The Specialty Food Association looks forward to a long and fruitful relationship with (included).  Please visit the (included) booth #935 to meet our newest SFA members and sample their products. Participating companies include:  
    AYO Foods    Bon AppeSweet Inc   Good Food For Good Inc.   Green Sahara   Herbal Tea-rapy LLC   Mighty Gum  Mocktail Club  Sweet Logic   Waju Water  Wildwonder Brands Inc. 
    Denise Purcell
    In the past year, the Specialty Food Association launched its Maker Prep webinar series, an educational program to designed to help new makers get ready to do business in the industry. The ongoing series brings in subject matter experts and experienced members to cover such topics as funding, branding, bringing your product to market, working with distributors, and more. Each topic is covered in a package of two or more webinars, complete with Q&A sessions, plus extra resources.
    Here is a sampling of information shared at some recent webinars. You can click through to find the full recordings, which are free to SFA members.
    Factoring is another option for financing. That is when companies receive upfront payments against invoices to help with operating expenses until full payment is received. The key benefit to factoring is more predictable cash flow, but there are fees associated with it.—Keith Lohler, K2 Financing, Funding Your Business: Working with Lenders
    “The retailer is a shared customer between you and the distributor. Relationships with retailers can give you leverage in what’s mostly a ‘David and Golliath’ situation.”—Jack Acree, Saffron Road Foods, Working with Distributors: Strategies for Success  
    When preparing to meet with a distributor, a company should know its products and pricing, as well as that of its competitors. It’s also helpful to know case/pallet minimums, shelf life, and share any special product issues.—Ian Kelleher, Peeled Snacks founder, Working with Distributors: The First Key Steps  
    Finding space in the sea of sameness can be a challenge, but your sales team may have valuable insights to offer so you can position your brand differently in the marketplace.—Christian Klawitter, Bright Design, Building a Brand Expression  
    “Founding a brand rarely starts with, ‘hey, let’s run a supply chain,’ yet if you don’t, your brand will fail.”—Veronica Lehman, consultant and Pure Organic founder, Understanding the Supply Chain Continuum  
    Logo, flavor, product image or flavor cue, and two to three relevant callouts should be used on the front of package. The back of package should include storytelling and any other romance copy regarding flavor, key ingredients, cooking ideas, and suggested uses.—Andy Kurtts, Buttermilk Creative, Package Design and Branding  
    Maker Prep webinars can be viewed live or recordings can be downloaded any time. Here is the webinar schedule for April and May. And to ask questions or continue the conversation, you can go to this forum.
     
    Denise Purcell
    Whether it’s consumer trends, innovative marketing techniques, or new sales channels, the specialty food industry is always evolving and even the most successful companies need education and resources to keep up. With that in mind, SFA's In The Know webinars are designed to educate and inform established and mature companies in the specialty food community.
    This ongoing series brings in subject matter experts and peers to cover topics that are important as a company matures such as logistics and sourcing, export opportunities, and succession planning to name a few. Each webinar includes a Q&A session, and we also provide extra resources to keep you informed. 
    Following is a sampling of information shared during various In the Know webinars. You can click through to find the full recordings, which are free to SFA members.
    Start with one platform (like Instagram) and build from there. Instead of trying to hit every social media platform at once, focus on doing a few things well. Prioritize platforms where you know your target audience is spending their time. Once you are in a good rhythm on your starter platforms, gauge bandwidth to expand onto other channels based on resonance with your target.—Katie Bell, Pulp+Wire, Social Media Marketing for Startups
    “An often-cited export sales statistic is that 95 percent of potential consumers are located outside of the U.S., so it’s a natural inclination to want to consider international sales.”—Molly Burns, Food Export – Midwest, The Benefits of Export
    Keep an eye out for fake domains, account verification, spelling and grammatical errors, and unauthorized email addresses (hover your mouse over email address to see the domain) to protect yourself against email phishing.—Monica Moore and Dave Curley, All Covered, Cybersecurity Fundamentals for Your Business
    “You need to do the things that will continue to make your business sustainable either at the loss you’re incurring now or at the cash flow you’re bringing in.” –Jack Acree, Saffron Road Foods, Raising Prices in Uncertain Times
    Other opportunities exist if you’re unable to get your product on a television show or movie through the prop or set decoration departments. The costume department, as well the hair and makeup department, are often stocked with drinks and snacks for the actors and crew to enjoy behind the scenes. –Jessica Cohen, founder of The Product Agent, What to Know about Product Placement in Film and TV
    In the Know webinars can be viewed live or recordings can be downloaded any time. Here is the schedule for April and May. And to ask questions or continue the conversation, you can go to this forum.
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