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Specialty Foods - The NASFT State of the Industry Report - The Market - US - July 2008

INTRODUCTION AND ABBREVIATIONS
Definition
Segment definitions and examples
SPINS specialty-gourmet & natural coding
Brand positioning
Specialty gourmet
Natural – standards
The 2008 Mintel/NASFT/Greenfield Online Survey
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
A $47.9 billion market for specialty foods
Driving the market: diverse food traditions
Spending on food at home
New product launches
In-depth analysis of 41 key segments
Supplier surveys: manufacturers, importers, distributors, brokers
Specialty food retailer survey
Retail distribution: mainstream, specialty food stores, natural food stores
MARKET FACTORS
Imports – foods and food traditions – help drive market
Figure 1: Legal immigration to the U.S., by country of origin, 2004-06
Figure 2: Number of international trips by U.S. resident travelers, by destination, 2005-06
Spending on food at home
Figure 3: Average expenditures of all CUs for food and beverages at home, 2004-06
Specialty retains its aura
New specialty foods launches
Figure 4: New specialty food and beverage product launches in gourmet stores, health food stores, and specialty retailers, by category, 2002-07
MARKET SIZE AND TRENDS
Figure 5: Total U.S. retail Dollar sales of specialty foods, at current and constant prices, 2005-07
Estimating the total specialty food universe
Figure 6: Total U.S. sales of specialty foods, 2007
MARKET SEGMENTATION
Figure 7: Sales of specialty foods market, segmented by food type, 2005 and 2007*
Figure 8: Total retail sales (specialty and non-specialty) in market segments included in specialty universe, through all channels, 2005 and 2007*
Figure 9: Specialty food as a percentage of all food sales, by segment, 2007*
SEGMENT ANALYSIS
Cheese and cheese alternatives
Figure 10: Sales of specialty and all cheese and cheese alternatives, at current and constant prices, 2005-07
Condiments
Figure 11: Sales of specialty and all condiments, at current and constant prices, 2005-07
Bread and baked goods
Figure 12: Sales of specialty and all bread and baked goods, at current and constant prices, 2005-07
Chips, pretzels, and snacks
Figure 13: Sales of specialty and all chips, pretzels, and snacks, at current and constant prices, 2005-07
Frozen and refrigerated entrees, pizza, and convenience foods
Figure 14: Sales of specialty and all frozen and refrigerated entrees, pizza, and convenience foods, at current and constant prices, 2005-07
Frozen desserts
Figure 15: Sales of specialty and all frozen desserts, at current and constant prices, 2005-07
Frozen and refrigerated meat, poultry, and seafood
Figure 16: Sales of specialty and all frozen and refrigerated meat, poultry, and seafood, at current and constant prices, 2005-07
Cookies and snack bars
Figure 17: Sales of specialty and all cookies and snack bars, at current and constant prices, 2005-07
Refrigerated juices and functional beverages
Figure 18: Sales of specialty and all refrigerated juice and functional beverages, at current and constant prices, 2005-07
Candy and individual snacks
Figure 19: Sales of specialty and all candy and individual snacks, at current and constant prices, 2005-07
Soup
Figure 20: Sales of specialty and all soup, at current and constant prices, 2005-07
Shelf stable sauces, salsas, and dips
Figure 21: Sales of specialty and all shelf stable sauces, salsas, and dips, at current and constant prices, 2005-07
Milk, half and half, and cream
Figure 22: Sales of specialty and all milk, half and half, and cream, at current and constant prices, 2005-07
Carbonated, functional, RTD tea, and RTD coffee beverages
Figure 23: Sales of specialty and all carbonated, functional, RTD tea, and RTD coffee beverages, at current and constant prices, 2005-07
Yogurt and kefir
Figure 24: Sales of specialty and all yogurt and kefir, at current and constant prices, 2005-07
Cooking oils
Figure 25: Sales of specialty and all cooking oil, at current and constant prices, 2005-07
Teas
Figure 26: Sales of specialty and all teas, at current and constant prices, 2005-07
Cold cereal
Figure 27: Sales of specialty and all cold cereal, at current and constant prices, 2005-07
Shelf stable pasta
Figure 28: Sales of specialty and all shelf stable pasta, at current and constant prices, 2005-07
Shelf stable juices and functional drinks
Figure 29: Sales of specialty and all shelf stable juices and functional drinks, at current and constant prices, 2005-07
Baking mixes, supplies, and flour
Figure 30: Sales of specialty and all baking mixes, supplies, and flour, at current and constant prices, 2005-07
Crackers and crispbreads
Figure 31: Sales of specialty and all crackers and crispbreads, at current and constant prices, 2005-07
Shelf stable fruits and vegetables
Figure 32: Sales of specialty and all shelf stable fruits and vegetables, at current and constant prices, 2005-07
Refrigerated sauces, salsas, and dips
Figure 33: Sales of specialty and all refrigerated sauces, salsas, and dips, at current and constant prices, 2005-07
Entrees and mixes
Figure 34: Sales of specialty and all entrees and mixes, at current and constant prices, 2005-07
Other dairy
Figure 35: Sales of specialty and all other dairy, at current and constant prices, 2005-07
Water
Figure 36: Sales of specialty and all water, at current and constant prices, 2005-07
Seasonings
Figure 37: Sales of specialty and all seasonings, at current and constant prices, 2005-07
Energy bars and gels
Figure 38: Sales of specialty and all energy bars and gels, at current and constant prices, 2005-07
Beans, grain, and rice
Figure 39: Sales of specialty and all beans, grain, and rice, at current and constant prices, 2005-07
Nuts, seeds, dried fruits, and trail mixes
Figure 40: Sales of specialty and all nuts. seeds, dried fruit, and trail mixes, at current and constant prices, 2005-07
Shelf stable meat, poultry, and seafood
Figure 41: Sales of specialty and all shelf stable meat, poultry, and seafood, at current and constant prices, 2005-07
Conserves, jams, and nut butters
Figure 42: Sales of specialty and all conserves, jams, and nut butters, at current and constant prices, 2005-07
Sweeteners
Figure 43: Sales of specialty and all sweeteners, at current and constant prices, 2005-07
Frozen fruits and vegetables
Figure 44: Sales of specialty and all frozen fruits and vegeteables, at current and constant prices, 2005-07
Eggs
Figure 45: Sales of specialty and all eggs, at current and constant prices, 2005-07
Hot cereal
Figure 46: Sales of specialty and all hot cereal, at current and constant prices, 2005-07
Puddings and shelf stable desserts
Figure 47: Sales of specialty and all puddings and shelf stable desserts, at current and constant prices, 2005-07
Rice cakes
Figure 48: Sales of specialty and all rice cakes, at current and constant prices, 2005-07
Frozen juice and beverages
Figure 49: Sales of specialty and all frozen juice and beverages, at current and constant prices, 2005-07
STATE OF THE INDUSTRY: SUPPLY CHAIN
Figure 50: Number of SKUs manufactured/carried, by supply chain sectors, 2007
Figure 51: Median average annual sales, by supply chain sectors, 2007
 MANUFACTURERS
Figure 52: Number of SKUs produced per specialty food manufacturers, 2007
Figure 53: Average annual specialty food sales by specialty food manufacturers, 2007
Figure 54: Full- and part-time staff employed by specialty food manufacturers, 2007
Figure 55: Breakdown of manufacturer expenses, by type, 2007
Figure 56: Share of specialty food manufacturer annual sales, by channel, 2007
Figure 57: Facility ownership and incidence of co-packing by specialty food manufacturers, 2007
Figure 58: Environmentally friendly product manufacturing, 2007
The voice of the manufacturer
What is the biggest threat to your business?
Do you plan to diversify and increase the number of specialty SKUs you manufacture over the next three years? If so, how do you plan to do so?
Have you taken any steps to make your operation more sustainable/green? If so, what steps have you taken?
 IMPORTERS
Figure 59: Number of SKUs carried per specialty food importer, 2007
Figure 60: Average annual specialty food sales by specialty food importers, 2007
Figure 61: Regions from which specialty food importers obtain products, 2007
Figure 62: Number of countries imported from, 2007
Figure 63: Share of specialty food importer annual sales by channel, 2007
Figure 64: Percentage of specific types of products imported, 2007
Figure 65: Importing environmentally friendly products, 2007
The voice of the importer
Do you plan to expand your import horizons to other countries or to other food lines? If so, what do you consider the “next best place” or the “next best products” to explore?
How has the weak dollar affected your business, and what have you done to confront that challenge?
 DISTRIBUTORS
Figure 66: Number of SKUs carried per specialty food distributor, 2007
Figure 67: Average annual specialty food sales by specialty food distributors, 2007
Figure 68: Stores serviced, 2007
Figure 69: Share of sales of specialty food distributors, by channels sold through, 2007
The voice of the distributor
What do you see as the fastest-growing channel for specialty foods?
Do you plan to expand your distribution network to include any new or different channels in the next three years?
How has the weak dollar affected your business, and what have you done to confront that challenge?
 BROKERS
Figure 70: Number of SKUs represented per specialty food broker, 2003-07
Figure 71: Average annual specialty food sales by specialty food brokers, 2007
Figure 72: Number of stores serviced, 2007
Figure 73: Number of companies sold to, 2007
The voice of the broker
 ATTITUDES TOWARDS SUSTAINABILITY AND “GREEN” BUSINESS PRACTICES
Figure 74: Attitudes towards sustainability and “green” business practices, 2007
RETAIL DISTRIBUTION
 RETAIL CHANNEL SALES OF SPECIALTY FOODS
Introduction
Figure 75: U.S. retail sales of specialty foods, by channel, 2005-07
Mainstream channels (supermarkets, drug stores, mass merchandisers)
Figure 76: Supermarket sales of specialty foods, at current and constant prices, 2005-07
Specialty food stores
Figure 77: Specialty food store sales of specialty foods, at current and constant prices, 2005-07
Natural food stores
Figure 78: Natural food store sales of specialty foods, at current and constant prices, 2005-07
STATE OF THE INDUSTRY: SPECIALTY FOOD RETAILERS
Operating statistics
Figure 79: Specialty food store operating statistics, 2007
Figure 80: Number of SKUs carried by specialty food stores, 2007
Relations with suppliers
Figure 81: Mean percentage of purchases made through distributors vs. direct purchases, 2007*
Stores: departments and product mix
Figure 82: Percentage of sales by department within specialty food stores, 2007
Figure 83: Characteristics of products carried by retailers, 2007
Figure 84: Retailing environmentally friendly products, 2007
Figure 85: Sources for discovering new products, 2007
Labor issues
Figure 86: Full-time staff in specialty food stores, 2007
Figure 87: Staff turnover rates at specialty food stores, 2007
Figure 88: Labor costs as a percentage of sales, 2007
Consumer issues
Figure 89: Percentage of sales by day, 2007
The voice of the retailer
What is the biggest challenge to you as a specialty food retailer?
What is the biggest threat to your business?
Do you have any plans to increase your store size or the number of stores you currently operate in the next three years?
How do you judge whether or not a product or group of products is right for your market area?
How much do you interact with customers? What strategies do you use to get them to come to your store rather than buying specialty food through supermarkets and other mass merchants?
How do you retain good sales staff?
What steps are you taking to make your stores more eco-friendly and sustainable?

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