Convenience retailers take notice: Specialty food merchandising opportunities are there for the taking. The Specialty Food Association's (SFA's) annual State of the Specialty Food Industry report offered seven takeaways, including a specific callout to convenience-store retailers.
The SFA identified key trends, including the emergence of plant-based foods, specialty beverages, younger consumers gravitating toward specialty items and breakfast-oriented daypart having a golden opportunity to step up, and it singled out the c-store channel to elevate its game.
The New York-based association, which conducted the study with Chicago-based Mintel, refers to convenience as an “under-tapped market for specialty items,” along with the foodservice channel, which the group advised to “move to greater customization” of these items.
The SFA didn’t elaborate on specific details for c-stores, but the intent is that chains could look to partner with primary and secondary suppliers with an affinity for specialty foods and then incrementally integrate select new offerings into their stores, ones compatible with demographic buying preferences.
The SFA said that specialty foods remain one of the fastest-growing segments of the consolidated food business as total sales jumped 9.8% between 2016 and 2018, reaching $148.7 billion in 2018.
Specialty food sales outpaced the growth of all food at retail during the period, up 10.3% vs. 3.1%, and product innovation and the wider availability of brands through mass-market outlets is playing a part in the success rate.
The share of consumers buying specialty foods by generation in 2018 were millennials at 84%, Gen X at 75%, boomers at 69% and Gen Z at 66%.
“Diverse consumer lifestyles are taking specialty foods mainstream,” said Phil Kafarakis, president of the SFA. “To reach these consumers and increase their own sales, food merchants have embraced the vast assortment of specialty products. Our research outlines the momentum in the industry and provides a comprehensive picture of where we are today and how businesses can prepare for the future.”
Click through to see product examples of the seven specialty food categories with the highest dollar growth.