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    Denise Purcell
    The annual 12 Under 35: Breakout Talent to Watch individuals are just what I needed right now.

    We’re all navigating a reality of business uncertainty, likely COVID-19 resurgence, brutal political division and social unrest, and discovering
    people who are making a positive contribution despite—and sometimes in response to—the tumult is even more inspiring in the calamity that’s been 2020.

    Among these enterprising young entrepreneurs you’ll read about, are a 16-year-old chef who challenged racial inequality in culinary reporting, a cultural preservationist whose CSA distributes products from Black-owned farms in North Carolina, a chef who turned his restaurant into a food bank in the early days of COVID-19, and a fifth-generation coffee farmer who is providing a more reliable income for Colombian growers. They and the rest of the members of this year’s list are a lesson in turning hurdles into opportunities.

    So, too, are the makers we highlight throughout this issue. In this Q&A Managing Editor Julie Gallagher talks with three companies who are shifting strategy in the age of COVID-19. Whether launching new items to gel with changing consumer buying habits or pushing through with initial product plans, these companies displayed agility during disruption.

    If you need more inspiration, peruse the list of 2020 sofi winners. As Ron Tanner, SFA’s vice president of education, content, and advocacy, points out, “The pandemic has challenged the supply chain, but specialty food entrepreneurs continue to show creativity in their kitchens.”

    These examples show an industry moving ahead, seizing opportunity, and innovating in ways large and small to keep competitive amid ambiguity. We have our own examples of the same here at SFA. I hope by now you’ve heard about and downloaded our new app, SFA Feed. It compiles all the useful content you are used to from us in one convenient platform. You’ll find the day’s news stories, features, Q&As, trends, the latest new product introductions from our online Product Marketplace, videos with industry leaders, SFA updates on programs and events, and the digital edition of Specialty Food magazine—all in one place to keep you up-to-date on what’s happening in our industry. And we continue to distribute our industry newsletter—renamed SFA News Daily—to showcase each day’s top news from the app.

    Our team is excited about growing this resource with even more original content, including an upcoming new podcast, to serve our audience. If you haven’t yet checked out SFA Feed, download it in the iOS App Store or in GooglePlay. It’s evolving into our main content platform for
    delivering the news, trends, products, and updates you need to know about, and the Association is proud to be innovating to bring you new and useful tools to help keep you informed.
    Denise Purcell
    Shifting channel strategy generated many comments from the supply chain during interviews SFA’s research partner Mintel conducted as part of the recently released State of the Specialty Food Industry research, 2020-2021 Edition. The interviews are included in the 125+-page full report to add insight and context into today’s market. 

    Among comments about channel evolution, companies noted that specialty brands are scaling faster than ever thanks to e-commerce and are using that channel to test the water before migrating to brick-and-mortar. Conventional retailers continue gaining ground and embracing better-for-you and specialty trends. And alternative channels are increasingly a focus among emerging specialty producers that aren’t winning traditional retail accounts at the pace they’d like or need. 

    Here are highlights of the supply chain’s responses:

    “We’ve seen huge growth in conventional stores like Kroger, Walmart, and Target. The natural category is exploding. … What we’ve seen over the last year or year and a half is that the natural world is becoming more of the conventional world.”
    —marketing coordinator for a 20-year-old, family-owned specialty food brand

    “[It used to be] that we have to get our numbers up in natural before tipping our toe into conventional grocery. Now you go everywhere. You pick the right grocery retailers, such as Safeway NorCal or Giant/Martin’s, that are much more forward thinking in the natural and organic space than other banners are. You don’t have to incubate for 3-4 years before you start leaping into grocery. Now, Walmart’s talking to every small brand, and Kroger [is too]. So the speed at which a brand could potentially scale is a lot faster now than what it used to be, if the brand has money.” 
    –co-founder of a 2-year-old sales consulting group

    “The [specialty/natural] food channel is a difficult place to make a profit in the beverage business. It’s a great place to get proof of concept and build a brand with cachet, but in the long term [focus] has to be more mainstream in most categories. I’m finding that mainstream retailers want specialty products like ours. Category managers want to have that kind of image enhancer for their categories.” 
    –owner of a 5-year-old specialty beverage company

    “It’s about not saying, “Hey, we’re going to launch in Target in 1,000 stores.” It’s actually being a little bit more restrictive with the buyer, saying “while we want to be in all Target stores, we think our strength is in [our home geographic] market right now. We’re not there yet to be in all of your locations in [another distant geography]”, for example. Our goal is to go from 50 to 100 to 500 to 1,000 stores, but I need to show proof of concept. If [the retailer] puts me in my home market, or the one I want [that’s] in the right [location]…at least if I don’t succeed, my investment is only 50 or 100 stores, not 1,000."  
    –director of growth and category management for an 11-year-old specialty dessert brand

    “In terms of getting our products launched and established, the first thing we always do is put them on Amazon, for a whole host of reasons. For one thing, it provides us with a test bed, so certain products we’ve had on Amazon long-term while we decide when the appropriate time is to launch them into [brick-and-mortar] retail. We’ve discovered things like, ”Are these pantry staples and are people repurchasing them? Do they need to be tweaked? What are the reviews like? Are these [products] fully functional?” We can use Amazon and direct e-commerce as a test bed with consumers before we go to retail.”
    –founder of a multi-brand specialty food and beverage portfolio

    “The focus right now is on alternative channels and impact. That’s been a focus for our brands for quite some time, and even more so now. What’s been on our minds a lot is just creating opportunities and connecting the brands to the right distribution channels, which are outside of the typical retailer and distribution systems. I think that’s really positive in a way, because they’re not having to jump through all of these hoops, they are able to act quickly, and form creative partnerships. Agile brands, like those we support, will be able to succeed through these challenging times.”
    –partnerships manager for a shared kitchen operator and specialty brand incubator

    You can purchase the 125-page State of the Specialty Food Industry Full Report and 10-Year Category Tracking and Forecasts (available at a discounted price for SFA members). And, download a recording of the recent webinar The State of the Specialty Food Industry + COVID-19 Impact here.

    What do you see as the channel evolution in the specialty food industry? Weigh in in the Q&A Forum.
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