NEW YORK — The Specialty Food Association’s (SFA) annual State of the Specialty Food Industry Report, issued today, 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. Sales through foodservice represented 22 percent of sales, with retail taking the top spot with 76 percent of sales. While online represents less than three 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 State of the Specialty Food Industry 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 specialty food consumer is evolving.

Key Facts and Figures:

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.