Five Categories Driving Specialty Food Sales Growth

The outlook is positive for a continued strong specialty food industry, with dollar sales hitting $127 billion last year, according to the “State of the Specialty Food Industry 2017” report, compiled by the Specialty Food Association and Mintel. Specialty food sales grew 15 percent,
compared to only 2.3 percent for total food sales, the annual research reveals.

Specialty foods outperformed their non-specialty counterparts in almost all of the 61 categories covered in the report. With increasingly informed consumers emphasizing quality in their food choices, products that accentuate good health, freshness, and better-for-you alternatives to traditional offerings are driving growth. Here are five areas that have emerged as sales leaders:

Specialty beverages outpace growth of food Sales of specialty beverages, which hit $10.5 billion in 2016, represent about 18 percent of the total specialty retail market. Though specialty food accounts for the majority, or 82 percent of market share, beverage growth outperformed that of food between 2014 and 2016, at 24 percent versus 15 percent. Water, refrigerated juices and functional beverages, shelf-stable and chilled RTD tea and coffee are all driving this increase.

Specialty snack foods nab over one-quarter of the total market As snacking becomes the norm, the segment now commands about 28 percent of the total specialty food market. Sales reached $16.3 billion in 2016, a 16 percent jump. Of the 13 snack segments represented in the report (including chips, pretzels, snacks; chocolate and other confectionery; yogurt and kefir; nuts, trail mix, dried fruit; refrigerated juices and functional beverages; cookies and snack bars; refrigerated salsas and dips; wellness bars and gels; crackers and crispbreads; frozen appetizers and snacks; nut and seed butters; jerky and meat snacks; and rice cakes), about half experienced growth of more than 20 percent. The popularity of some snacks is helping keep the center store relevant despite fresh and perishable categories’ reigning status. In 2016 shelfstable specialty foods accounted for 61 percent of the total specialty food market, or $36.2 billion.

Trending categories: Jerky, probiotics, and bars Jerky is still on fire: Sales reached $235 million in 2016, and consumer interest in protein snacks has contributed to extremely strong growth ( 86 percent) since 2014. Probiotics are the common thread among two of the fastest-growing categories in unit sales ranking, yogurt and kefir—up 19 percent—and juices and functional beverages—up 35 percent and predominantly made up of kombucha drinks. And specialty wellness bars and gels reached $1.2 billion in sales. Nearly half of all bar/gel sales are now coming from these types of products. The category is innovating across usage occasions and nutritional needs, and is fueled by trends in snacking, protein, and portability.

You’ll find more insights on channels, trends, and movements impacting the industry in highlights of the annual report, beginning on p. 81 of the spring issue of Specialty Food Magazine. For a deeper look at dollar and unit sales, category sales performance versus non-specialty foods, and benchmarking supply chain data, visit
Posted by Denise Purcell on Jul 13, 2017 3:00 PM America/New_York