The specialty food industry is an ever-changing landscape where consumer sentiments toward flavors, categories, certifications, and modalities can be difficult to interpret.
David Lockwood, the researcher behind SFA’s State of the Industry 2023-2024 report, and Melanie Bartelme, associate director at market research firm, Mintel, will share insights into the latest category and segment trends that will soon impact the specialty food world, in an SFA Buyers’ Market Webinar titled “Category and Segment Trends Driving the Industry,” this Thursday, July 20 at 1 p.m. EDT. The webinar is free for members and $19 for non-members. Register now.
SFA News Daily spoke with Lockwood about the topic.
What are some trends on the horizon?
Well, 2022 and now 2023 have been the years of snacks (chips, pretzels, popcorn, and more). Snacks jumped from the third largest to number one in the specialty food world; plant-based products have raced in all directions (dairy up; meat and prepared foods down) and continue to be a hotbed of innovation; grains and pasta are soaring again as if people are tightening budgets despite full employment.
Restaurants are full even while some say they are trading down to manage rising prices, and the changing fortunes of the refrigerated, frozen, and shelf-stable sections of grocery continue to shift significantly following a decade of predictability before the pandemic.
What is the most surprising trend you’ve noticed?
For me, it is grains and pasta (and other pantry staples like soup and sauces) having a very strong 2022 and 2023 (after the understandable explosion during 2020 followed by a contraction in 2021 as the economy reopened). It is as if consumers are stocking pantries and pinching pennies during a recession when that isn't the case for most people. We know that increased and elevated cooking at home is a long-term trend, but that doesn't explain two years of double-digit growth. I think growth here will go back to "normal" in 2024, but I'm still trying to understand this year.
Where are some of these trends coming from?
That's easy—the pandemic lasted nearly two years and its social and economic recovery is taking at least as long. This month brought very positive news in the fight against inflation for both producers and consumers, but you'll notice that one of the stickiest sectors of high inflation in the economy is food—both at home and away from home. In our recently published The State of the Specialty Food Industry 2023-2024, we interviewed an SFA member who points out that makers and retailers had been doing everything possible to avoid price increases for several years prior to the pandemic. So, the pandemic amplified pressures that were going to have to come out eventually.
Do you have any advice on how specialty food businesses can make use of this information?
Makers have proven yet again that they are among the most creative people. They have spent the past three-plus years strengthening their businesses by rewarding their employees, becoming intimately familiar with all aspects of their supply chain, expanding the channels that they sell into, managing the cost of goods sold, and leaning on their communities by sharing space, co-packers, logistics partners, or research with their "competitors."
Do the top emerging trends differ between generations?
Yes, but not as much as people might think. For instance, Boomers prefer non-RTD tea and coffee while younger Millennials and Gen Z favor RTD beverages, but it was the same when Boomers were young. Likewise, young adults more actively seek out new flavors. But the overriding trend is that nearly 80 percent of consumers are purchasers of specialty foods, and people of all ages like to be surprised and delighted and have something that is delicious. This fact smooths out generational differences.
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