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“Despite its market size and impressive growth, the specialty food industry has suffered from a dearth of reliable trade information. Coproduced by the National Association for the Specialty Food Trade (NASFT), SPINS, and Mintel, Specialty Foods – The NASFT State of the Industry Report takes consumer statistics, product movement data and proprietary research to create a look at where the specialty food industry is today, and where its explosive growth will take it in the near future. It is groundbreaking research that key decision makers in the food industry should read.”
—Ron Tanner, Vice President, Communications & Education, NASFT
Specialty foods, products that have limited distribution and a reputation for high quality, have been steadily gaining in popularity as Americans develop a more sophisticated palate. In fact, NASFT estimates that there are some 120,000 specialty foods SKUs in the marketplace today. A number of factors have contributed to growth, such as globalization in the food industry, a greater interest in high-quality ingredients, and more disposable income devoted to non-discretionary food purchases. A well-traveled consumer base has begun to seek out international foods in the United States, spurred by a general change in eating patterns that includes more away-from-home eating. Paralleling the trend for international foods is a greater interest in regional American cuisines. At the same time, a more robust distribution network makes it possible to buy specialty foods in myriad venues from the Internet to the supermarket.
As the first NASFT/Mintel/SPINS State of the Industry Report, this document is designed to serve as a benchmark for the industry as a whole and for the each of the individual segments. Mintel/NASFT/Technometrica surveyed 797 NASFT members in February 2004, inquiring about industry practices among specialty food manufacturers, importers, distributors, brokers, and retailers. Encompassing three years of sales data (2001-2003) for each of the 36 covered segments, this report discusses the positive and negative factors that may have a bearing on each segment’s future growth or decline. New product examples are included for each segment. Also included is a comprehensive look at distribution channels within the specialty food trade, from importer and broker to retailer.
The following segments have been selected for inclusion in this report:
Asian foodBaking mixes, supplies, and flour Beans, grain, and rice Candy and individual snacks Carbonated beverages and single-serve drinks Cheese and cheese alternatives Chips, pretzels, and snacks Coffee, coffee substitutes, and cocoa Cold and hot cereals Condiments Conserves, jams, and nut butters Cookies and snack bars Crackers, crispbreads and rice cakes Eggs Entrees and mixes Frozen and non-frozen bread and baked goods Frozen desserts Frozen entrees, pizza, and convenience foods Frozen fruit and vegetables, refrigerated and frozen meat, poultry, and seafood Honey, Syrup and Specialty Sweeteners Milk, half and half, and cream Nuts, seeds, dried fruit, and trail mixes Oils Other dairy Puddings and shelf stable desserts Refrigerated juice and functional beverages Refrigerated sauces, salsas, and dips Seasonings Shelf stable fruits and vegetables Shelf stable juices and functional drinks Shelf stable meat, poultry and seafood Shelf stable pasta Shelf stable sauces, salsas, and dips Soup Teas Water
For the purposes of this report, specialty foods are defined as products that have limited distribution and a reputation for high quality. Items that are considered specialty foods can comprise single ingredient products such as olive oil or vinegar, but they can also be total meal solutions (kits, frozen, etc.) or prepared foods such as cookies or crackers.
Excluded from the scope of this report are meat, poultry, cheese, fish, dairy, and bakery sold PLU or in bulk, as current scanner technology cannot adequately capture these data. Fresh fruit and vegetables and some products within other segments (e.g. some confectionery products) are also not included. Also excluded from this report are alcoholic beverages, as the laws regarding the place of sale of these beverages varies from state to state, making it impossible to collect consistent sales data. Specialty HBC items such as shampoos or soaps, as well as pet food, household improvement and cleaning products (e.g. candles), and other products that are often sold alongside specialty food products (e.g. cookware, magazines, books) are not covered by this report.
Data from this report are derived from sales through the following channels:
Mainstream Channels:
Food stores with $2MM+ in sales, drug stores with $1MM+in sales and mass merchandisers (excluding Wal-Mart).
Natural Channel:
Natural supermarkets with $2MM+ in annual sales with a 65% natural product mix. It should be noted that GNC, Vitamin Shoppe, and other supplement stores are not included.
Specialty Channel:
Specialty food retailers generally do not sell mass products such as cereals or packaged foods typically sold through mainstream channels (e.g. mainstream products produced by major CPG manufacturers). There is a considerable amount of specialization in this industry—some retailers may sell only cheese, while others primarily deal in prepared foods, with coffee and baked goods offered as companion products. They are generally smaller units, with limited product offering and square footage.
