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SFA Report: Specialty Food Remains A Fast-Growing Segment

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The Specialty Food Association’s (SFA) annual State of the Specialty Food Industry Report reveals that specialty food remains one of the fastest-growing segments of the food business. Fueled by increasing interest from both consumers and retailers, total sales jumped 9.8 percent between 2016 and 2018, reaching $148.7 billion last year.

Specialty food sales outpaced the growth of all food at retail, up 10.3 percent vs. 3.1 percent. Product innovation and the wider availability of specialty foods through mass-market outlets is playing a part in the industry’s success, the report found. Sales through foodservice represented 22 percent of sales, with retail taking the top spot with 76 percent of sales. While online represents less than 3 percent of sales, it has grown 41 percent since 2016.

“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. Conducting important research like this is a part of our mission to champion specialty foods and help our members continue to innovate and succeed.”

The SFA combines its annual research into a comprehensive report and 5-Year Category Tracking and Forecasts. Working with Mintel, the research explores where the current market stands, the opportunities and challenges it faces, where it is going based on sales forecasts in key categories and how the consumer is evolving.

Top Five Categories with Highest Dollar Growth:
• Refrigerated Plant-Based Meat Alternatives
• Rice Cakes
• Frozen Plant-Based Meat Alternatives
• Water
• Refrigerated RTD Tea and Coffee

Top Five Categories–Retail Sales:
• Cheese and Plant-Based Cheese
• Frozen, Refrigerated Meat, Poultry, Seafood
• Chips, Pretzels, Snacks
• Non-RTD Coffee and Hot Cocoa
• Bread and Baked Goods

Share of Consumers Buying Specialty Foods by Generation (2018):
• Gen-Z—66 percent
• Millennials—84 percent
• Gen-X—75 percent
• Baby Boomers—69 percent

Top Seven Take-Aways:
• Plant-based is going strong.
• Specialty beverages are increasingly a force in the market.
• Younger consumers don’t look to supermarkets for quick meals.
• Reduced packaging and food waste are hot points.
• The C-store channel is an under-tapped market for specialty items.
• Foodservice needs to move to greater customization.
• Opportunity lies in breakfast.

More on the report will be detailed at a special session at the Summer Fancy Food Show coming up June 23-25 at the Jacob Javits Center.

The SFA is a community of food artisans, importers and entrepreneurs. Established in 1952 in New York, the not-for-profit trade association provides its 3,800 members in the U.S. and abroad with resources, knowledge and connections to champion and nurture their companies in an always-evolving marketplace. The association owns and produces the Winter and Summer Fancy Food Shows and presents the sofi Awards.

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