by Ashley Bates/staff writer
Not only do food distributors deliver and market goods to the food retailer, they also help the retailer market to the customer. And in these days of economic uncertainty, there still is one segment of the food distributor industry that is consistently growing—specialty foods.
The specialty food distributor offers a service unlike any other. It must offer a high level of customer service to retailers because typically those retailers are offering a higher level of service to their customers, selling products like organic, ethnic, artisanal and other handmade or locally- sourced options.
According to research from the 2,900-member National Association for the Specialty Food Trade (NASFT), shoppers have been embracing specialty foods across all age groups and regions of the U.S.
Wading through times of weak consumer confidence, 59 percent of consumers told the NASFT that they purchased specialty foods during the year, a slight decline from 2010, according to “Today’s Specialty Food Consumer 2011,” the NASFT’s annual report on consumer purchasing habits and trends. So it’s up to the distributor and retailer to keep the specialty food momentum going for the future.
“Economic challenges spell opportunity for the $70 billion specialty food industry,” said Ron Tanner, VP of communications and education for the NASFT.
“Specialty foods like dark chocolate, artisanal cheeses and creative condiments have become an integral part of the culinary landscape, and consumers continue to enjoy them.”
Trish Pohanka, director of purchasing at European Imports Ltd. in Chicago, told The Shelby Report that the coming year should bring some interesting challenges for the specialty food distribution industry.
“A: How do we keep competitive pricing in a volatile market (the strength of the U.S. dollar is a constant variable in making product selections when importing)? B: How can we use technology to educate our employees, customers and end consumers about the products (and services) we offer while still providing personal customer service?” said Pohanka, who has served on the NASFT board for 12 years. “C: How can we keep up-to-date on the FDA changes regarding food labeling and issues on importing?”
European Imports is a family-owned company that imports and distributes specialty food items to retail stores, restaurants, hotels and distributors in 40 states. The company offers 7,000 items in the perishable, shelf-stable, foodservice and retail categories, including cheese, meat, charcuterie and pastry.
Tanner said that specialty food sales rose 4 percent last year and the same is expected for this year.
“I would say that the trend toward buying local and buying American and artisanal is supporting the small producer or the smaller farmer…It is becoming a very important initiative,” Pohanka said. “I believe that consumers are more sensitive as well…they like to see there is more attention to detail and that it’s not mass produced. I think especially in the specialty food arena consumers like the story, they like why something is special; it’s not just that they like the product, it’s the story behind the product.”
The state of Vermont and the Vermont Specialty Food Association (VSFA) has made it their mission to market the specialty foods produced in the state to specialty food distributors. Jim Harrison, director of the VSFA, said that the program is important to the state and the food producers.
“I think for a state like Vermont it’s very important. It’s an opportunity for food producers in the state and other types of manufacturers and producers of products to differentiate themselves through affiliation with the state name,” he said. “While it doesn’t use the state name, Vermont also is synonymous with Green Mountain. You don’t have to go very far to see how Green Mountain (Coffee Roasters) has capitalized on that. Obviously you need to produce a good product, but I think the name Green Mountain has really complimented their brand.
“We want to more and more associate the farm where the fruit has come from, and, as you mentioned, there’s a lot of interest in state-specific produce and vegetables, fruits and whatnot. A lot of our specialty food producers are small-batch, they aren’t mass produced products. Many of them are what they call artisanal, and I know a number of our cheese makers have used that terminology.”
Tanner and Pohanka agreed that specialty retailers are ordering items in smaller cases in today’s market. This keeps their inventory low since they don’t want to store much stock in the back of the store.
According to Tanner, “A lot of the retailers want products that are six items per case rather than 12 items per case. So a lot of the specialty food distributors need to encourage their suppliers to put six per case rather than 12.
“They want all the products from a certain SKU to be able to be put on the shelf.”
Pohanka added, “The industry is trending toward six-packs even though the imports seem to see a constant battle,” she said.
Technology also is advancing the specialty distributors industry. Facebook and other social media along with email and other promotions are becoming a mainstay in the industry.
“We plan on using Facebook to promote exclusive lines and offer promotions to drive more business. Our website is being redeveloped to provide a more personal touch, extensive product knowledge, themed promotions and a more interactive experience,” Pohanka said. “We will be offering a new program for 2012 that allows customers to select from a menu of products geared towards specific promotions (i.e., holidays) for in-store demos. This reduces the purchase quantity for the customer so smaller stores can take advantage of the program. It also provides our vendor partners the opportunity to participate in the program with less cost. Product demo at the store level is a key to sales.”
Pohanka added that even through social media, advertising and promotions, the fact is that tasting the product is always the best way to market food.
“We are seeking new ways to reach our customers using technology and social media, but the most effective way to sell food is through smell and tasting,” she said.