Specialty Food Magazine

Summer 2019

Specialty Food Magazine is the leading publication for retailers, manufacturers and foodservice professionals in the specialty food trade. It provides news, trends and business-building insights that help readers keep their businesses competitive.

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While brick-and-mortar retail sales still comprise most of the market, specialty foodservice and online sales are growing more rapidly. In 2018, sales from brick-and-mortar retailers reached $113.4 billion, representing more than three-quarters of total sales. Specialty foodservice sales account for 22% of the market, at $32.4 billion. Foodservice sales grew more than retail between 2016 and 2018, 12.9% compared to 8.4%. However, in both cases sales were stronger in 2017 than 2018. Online sales of specialty foods and beverages represent only 2.5% of total sales, or $2.85 billion. But growth has been very strong since 2016 at 41%, and particularly robust last year at 24%. Today, mainstream outlet growth, including supermarkets, mass merchandisers, drug stores, and other mass outlets, is the strongest, with specialty and natural food stores lagging. The wide availability of specialty products in conventional outlets is a definite factor. "Specialty is becoming mainstream. As the specialty categories grow and CPGs acquire some of these companies, it creates the risk for us that a retailer will choose to take it direct along with other mainstream product they purchase from that CPG," says a vice president of vendor relations for a large specialty food distributor. "As we build a product up and it's successful, a retailer may take that directly into their warehouse, and then it is our job to find new items to replace it. We are continually working with smaller companies and startups of varying levels of prepared- ness, which can pose challenges," she adds. "Looking ahead we're asking how we are going to assist these retailers with their initiatives around online, and direct ship, store pickup, etc. There's a lot of buzz right now, as to how to solve for these issues and be \ȉZ`\ekXk`k%È —vp of vendor relations for a large specialty foods distributor Source Mintel/SPINS THE STATE OF THE SPECIALTY FOOD INDUSTRY S3 Mainstream Stores 11% Natural Food Stores 3% Specialty Food Stores 2% Natural food stores includes sales estimates for Whole Foods Market and Trader Joe's. Does not include private-label sales, specialty food perishables, PLU or random-weight specialty items sold in bakery, deli, meat, and seafood, or online sales. Source: Mintel/SPINS )'(-ǡ)'(/ Source Mintel/SPINS Retail Channels $113.4 Foodservice $32.4 Online $2.85 SPECIALTY FOOD 2018 $ Billion total u.s. sales of % change Editor's note: The market size for the specialty food industry has been calculated as follows: SPINS provides three-year scanner data sales for food, drug, and mass segments and natural supermarkets (excluding Trader Joe's and Whole Foods Market) for sales in 63 categories. To reach the U.S. sales total, Mintel adds estimated sales that weren't collected by scanner data. This includes PLU sales (excluding produce) through all channels, as well as sales through Trader Joe's, Whole Foods Market, and some specialty food retailers. THE SIZE OF THE SPECIALTY FOOD MARKET ǩ8KI

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