Posts
The pipeline is full of young consumers who are enthusiastic buyers of specialty foods, says David Lockwood, director of Mintel Consulting.
For the first time this year, the annual, category-by-category analysis of the specialty food industry from Mintel and the Specialty Food Association includes data on the generation dubbed “iGen,” or people born between 1995 and 2007. The results indicate these young shoppers are consuming specialty foods at a higher rate than older consumers.
“We expect that to continue,” says Lockwood, who is scheduled to present an overview of the research on June 30 at the Summer Fancy Food Show in New York. “It’s an adventurous category, and young people tend to be adventurous and try new things.”
Lockwood recently spoke with Specialty Food News about the research, which he will discuss at the show with Denise Purcell, director of content for the Specialty Food Association.
What are some key trends you've seen in the past year in your analysis of specialty food data?
The main trend is that specialty foods continue to be the growth driver across the entire food retailing market. Conventional food grew at just 1 percent, and specialty food grew at 5.5 percent. The growth rates were a little less than we had forecast, but specialty foods actually gained share at a slightly faster rate than we had forecast. Specialty has been leading the overall food market for a long time, and will continue to do so. We see conventional growing 1.5 to 2 percent a year through 2022, and specialty growing about 6 percent annually.
What results from the research surprised you the most?
To be honest, nothing at all. We’ve been doing this research for about 14 years now, and it’s an industry that consumers love, driven by countless entrepreneurs that are continually delivering new and exciting products. The trend in society at large is that consumers continually want better foods, with better stories, with better provenance, and it all boils down to what specialty foods is best at.
Probably the best new thing to talk about is that this is the first year we’ve actually reported on the i-Generation. The oldest ones are now 18-22 years old, so they fall into our “adult” category. There haven’t been enough in the past to put them in the survey and break them out in any real way. The exciting thing is they are already using and buying specialty food at rates greater than the other generations. It doesn’t mean they are buying more and spending more, but the percentage of them that are doing anything with specialty foods is higher than the percentage in any of the other generations.
Where do you see the most opportunity for specialty food retailers in the coming years?
That too is the same as it has been for years, but it’s worth repeating, and it comes directly from our research. The opportunity for the whole retailing community is to convert light specialty food consumers to heavy specialty food consumers. Of people who say they buy any specialty foods, the average is that they buy 7.8 of our 35 categories. Light buyers average about one to five categories, and heavy buyers average about nine categories. What I always consider to be the exciting thing is there are more light buyers than heavy buyers, so just getting people who are already buying specialty foods to buy more of them is the best opportunity out there.
It’s a question of doing more of what you’re already doing as a retailer — trying to get people to become more engaged in something they are already buying — which shouldn’t be impossible. There is always an immediate payoff for the consumer, because either they are finding better tasting food, or they are finding a brand that connects them to a place or connects them to a cause. Those are, to me, the three hallmarks of specialty foods — it’s either better tasting, or it connects you to a place, or it connects you to a cause.
How do you see the growth of online channels impacting the industry?
Certainly the tail is wagging the dog in a dramatic way. Looking at the broadest definition of specialty — not only specialty foods, but other specialty companies — they have simply used online channels to turn the whole industry upside down. Companies like Birchbox, Chewy.com, Blue Buffalo, private labels that are online, Thrive Markets and Brandless, they have all been either small or previously unknown brands or services that have become really important players, seemingly overnight.
The ramifications aren’t so much about changing market share — it’s also changing how people learn about food, having food delivered to you, and helping people bypass the big CPG company way of doing business. The online channel is really only a couple of billion dollars, less than 2 percent of the total, but obviously it’s growing faster, and it’s changing the way people are doing business. It’s giving food entrepreneurs new ways into the market. Years ago, the only way in was Whole Foods Market, but now there are many more ways to do it.
What are some of the other forces impacting the future direction of the industry?
There are many, but just to name a few:
- Local is always big, and will always stay big, no matter how it gets defined. Trying to figure out how to be a local brand is very important. Even if you happen to be national, finding ways to connect with people on a local basis is important, and I think specialty foods companies do a pretty good job with that.
- Younger consumers are particularly interested in things like sustainability — and not just saying you are doing something sustainable, but proving that you are doing something sustainable. It turns out, as we have seen in the last 10 years, it’s a lot easier to claim sustainability than to prove it. The industry tightening up the definition of what is sustainable is certainly a work in progress, and that is a force impacting the direction of the industry. A sibling to that is food waste. It’s been talked about for years, but it’s never been top of mind, and now it is starting to get there. Companies that have a solution for food waste will definitely have an advantage.
- The other force that isn’t brand new but certainly is reaching a crescendo is the money that is flowing in from venture capital and food incubators, which also gives another avenue for food entrepreneurs. Ten years ago that wasn’t much of a channel at all as far as funding goes, but venture capitalists are all over the food market now, so that will change the way business gets done and the way growth happens. It tends to increase the rate of partnerships and mentorships, because venture companies tend to fund many companies in the same space, and have those companies work together or learn form each other. I think that’s a force impacting the industry.
— Mark Hamstra
from Food Trends https://ift.tt/2MEqFzY
0 comments:
Post a Comment