Millennials drive specialty food sales to new heights
The specialty food industry ate up $127 billion in 2016 sales – up 15% in a year, according to the Specialty Food Association's state of the industry report, written up in Grocery Headquarters.
According to the report, major drivers of growth include product innovations and wider availability of products in major grocery and convenience stores, as well as in foodservice.
More people are buying specialty products online, with direct-to-consumer and third-party e-commerce accounting for 36% of all sales. Additionally, more millennials are buying these products, and 61% of these products are found in center store.
With steady increases in the working population in recent months, more people are tempted to stop by retailers and delis and splurge on something “special.” Unconventional, small-manufacturer, mission-based food products are in the position to be that splurge.
That's one factor. Another is specialty food manufacturers were early converts to the "clean" concept: less (if any) additives, fewer ingredients, and more consumer-friendly packages. Millennials are particularly drawn to these foods, which embody many of their health and social ideals.
The industry is primed to continue its meteoric growth. Interest in clean labels, different tastes and better-for-you snacks — all of which are hallmarks of specialty foods — is getting stronger through all demographics. Additionally, specialty foods seem to have captured elusive e-commerce success, which will only herald larger growth in the future.
Traditional retailers are primed to continue to cash in on the trend, with 70% of distributors planning to expand their specialty food SKU counts in 2017, according to the report. Specialty products are taking a larger share of consumers' shopping dollars, with transaction sizes increasing by almost a fifth.
- Grocery Headquarters Specialty Food Industry Sales Hit $127 Billion in 2016
- Specialty Food Association The State of the Specialty Food Industry 2017