Gourmet Guidance

November 20, 2017

Windisght Grocery Business | November 20, 2017 – Specialty and gourmet foods, once the realm of upscale, niche retailers, are migrating to mainstream supermarkets. According to the
Specialty Food Association, specialty food is a $127 billion industry, and it grew 15% in total sales from 2014 to 2016.

In its State of the Industry Report, the New York-based trade group noted that much of the growth is being driven by retailers expanding their selections to appeal to millennials and other influential consumer segments. Mainstream stores accounted for more than $48.4 billion in sales of specialty foods, while specialty food stores saw more than $6.3 billion in sales, and natural food stores had more than $4.2 billion.

Grocery stores are not only making these gourmet items more widely available, but they’re also merchandising the foods throughout the store. “Retailers no longer just steer you into the international aisle or the natural and organic section,” says Phil Kafarakis, president of the
Specialty Food Association. “Depending on the retailer,” he continues, specialty products are on a roll, with many finding “their way into the center of the store.”

Some items are even making an appearance at the front end, where kale chips, oxygen infused water and non-GMO energy bars have taken the place of gum, mints and chips at the checkout. Manufacturers are offering different-sized packages to make this merchandising easier. “Our
manufacturers and members have the innate ability to understand their channel,” Kafarakis says.

Specialty foods have certain characteristics that make them more widely appealing than ever, he says, particularly as it pertains to clean ingredients, how the items are prepared, the packaging and, for many, stories about the food makers themselves.

Other experts agree that consumer trends are driving the migration of specialty foods into mainstream grocery. “Whether you attribute it to the infectious millennial mindset, digital empowerment, culinary travel, chef ingenuity or some combination thereof, the reality is, a new normal has emerged in modern-day eating culture,” says Nicole Peranick, director of thought leadership and culinary for Stamford, Conn.-based Daymon Worldwide. “Consumers are breaking all the rules, and progressive retailers and manufacturers are being agile.”

Here are some of the most influential trends that are migrating from the gourmet and specialty foods worlds into the larger retail universe:

Small Batch
Kafarakis says some of the keywords in specialty foods include artisan, kettle cooked, stone oven, and others that
connote small batch. “It’s this notion of not being mass produced,” he says.

The small batch concept has been the marketing push for Cincinnati-based Graeter’s Manufacturing Co. The 147-year-old company makes ice cream in 2.5-gallon French Pot freezers. “We positioned Graeter’s as the original hand-crafted, hand-packed ice cream,” says George Denman, VP of sales. “We’ve been able to grow bigger without growing bad.” A few years ago, the company built a new plant, but the ice cream is still made in small batches and hand-packed.

The challenge has been to attract millennials, who are not as excited about ice cream as their parents are. “Baby boomers are overindexed in ice cream at 109,” Denman says. “Millennials index at 83.” One solution, he says, has been to collaborate with brands that millennials like. Earlier this year Graeter’s Ice Cream partnered with Covington, Ky.-based Braxton Brewing Co. to release a Black Raspberry Chocolate Chip Milk Stout, an adult beverage available for a limited time in participating Kroger stores. Black Raspberry Chocolate Chip, which contains black raspberries from Oregon’s Willamette Valley and gourmet bittersweet chocolate, is Graeter’s top-selling ice cream flavor.

Global Flavors
According to Daymon’s 2017 Shopper to Advocate Study, five in 10 of the most engaged shoppers try new types of cuisines on a monthly basis. “Global cuisines are no longer niche, though the right balance is still needed to reduce the risk of trying something new,” Peranick says. People are willing to try new flavors in familiar foods. “Think Korean barbecue potato chips.”

Consumers also want to cook their own foods and add globally inspired flavors and condiments. “They are looking for variety and choice to elevate different dishes with the wide variety of flavors, textures and inherent mineral content in all-natural artisanal, smoked and flavored
salts,” says Megan O’Keefe, who handles media relations for Woodinville, Wash.-based SaltWorks Inc. “They’re no longer satisfied with just basic table salt.”

One of the new trends is pairing flavors, such as sweet and salty. SaltWorks offers finishing salts such as Artisan Cyprus Flake and Bali Pyramid sea salts, Salish Alderwood smoked or Fusion Habanero Heat salts, and others. Another influential trend is on-the-go shoppers, “who want the convenience of a supermarket but the selection of an upscale or specialty market,” O’Keefe says. “Grocers are expanding offerings and stocking more specialty foods to satisfy shoppers’ demands and compete with the convenience of online shopping that delivers specialty products directly to the consumer.”

To help merchandise the salts, SaltWorks introduced new products and packaging styles for its Artisan Salt Company brand. O’Keefe says the line is easy to merchandise. The new salt shakers and salt grinders (which feature an exclusive adjustable ceramic grinding mechanism) fit in standard spice display racks. The newly redesigned boutique glass jars have a short, wide profile and American black walnut wood lids. The latest packaging style to join the Artisan line are pour-spout pouches, which will debut in winter 2017.

A Narrative With the Food
Storytelling is another specialty food trend. “People care more than ever about where their food comes from, what ingredients … are in their food and the stories behind esoteric products,” says Sande Friedman, public relations and content manager for Philadelphia-based Di Bruno Bros. “I think that mainstream supermarkets have identified this curiosity for ‘What am I eating and what is it made of,’ and have realized that many specialty products meet these qualifications and curiosities better than a mass-produced equivalent.”

Di Bruno Bros.—a specialty food retailer and importer whose roots date back to 1939 in South Philly’s Italian Market, and which has since grown to five retail locations, catering, import and e-commerce—is extending its line of jams, adding Di Bruno Bros. Blood Orange & Grappa Jam and Di Bruno Bros. Strawberry Prosecco Jam. Also new is a line of Italian sweets from Borgo de Medici, including Salted Caramel Panettone, figs and roses packed in honey, and more. Additionally, there has been an uptick in specialty butter, and an increase in people buying larger chunks of cheese such as Parmigiano Reggiano, aged Gouda, Comte and other cheeses that Friedman says “are built to last.”

Tapping Into Wellness
Healthfulness has long been a trend, and according to Daymon’s 2017 Shopper to Advocate Study, six in 10 engaged shoppers are actively managing their health. “Food as medicine is moving quickly into the mainstream and innovative approaches are dialing up nutrient density, even in more traditionally indulgent foods,” Peranick says. Some of the newer approaches include incorporating probiotics in chocolate, ice cream and cheese, putting kombucha in snack bars, and using adaptogenic herbs, which are linked with stress reduction.

Superfoods are still on-trend. “Extra virgin olive oil is evolving from simply being a finishing or cooking oil to playing a bigger role in consumers’ lives,” says Jonathan Bassett, co-founder of The Olive Fruit, which makes Kiklos olive oil. “The many health benefits of EVOO, particularly those that are pure with a high antioxidant content, are now becoming known, even as more are being discovered, securing EVOO’s place as a superfood.”

The Specialty Foods Association, citing a report by the Plant Based Foods Association and The Good Food Institute, with data from Nielsen, said that for the 52-week period ending August 12, 2017, sales of plant-based foods in all outlets combined grew by 8.1% compared to the same period the previous year. Meanwhile, sales of all foods declined 0.2% in the same channel. Plant-based foods topped $3.1 billion in sales.Veggie-forward foods are helping to drive snack sales. “Progressive consumers are looking for better-for-you snacks and veggie-based foods in particular,” says David Neuman, CEO of Hollywood, Fla.-based Gaea North America. “Our Gaea snack olives and new veggie snack packs were created to meet this ethical and snack-forward change in consumer demand, appealing to health, convenience, less packaging [and] value.”

In addition to items such as Organic Kalamata Snack Packs and Pitted Green Olives with Chili & Black Pepper, Gaea also offers Carrot Snacks, Cauliflower Snacks and others. “Better-for-you products like our snack olives and veggie snacks are well-suited to migrating from gourmet retailers to supermarkets because there is an obvious consumer need, and grocery chains have the shelf space to move into this category,” Neuman says.

Bold Snacks
Flavor trends are also behind the increase in specialty foods in the snack aisle. “We see a lot of new packaging, unique flavor profiles and nontraditional combinations and applications,” says Chad Hartman, director of marketing for Charlotte, N.C.-based Truly Good Foods. “Many grocers are raising the bar and offering more of a gourmet selection.”

The company offers snack mixes such as the Artisan Blend line, which includes Cajun Harvest, Mango Tango, PB&J Mix and other flavors in standup resealable bags. “Shoppers are becoming more adventurous in their eating habits and are looking for more than salted nut, a raisin and a piece of chocolate,” Hartman says. “Whether it be a nutritional blend of nuts and dried fruit or a spicy and sweet gourmet blend, shoppers want more from their local grocer.”

Cheese is another on-trend snack. Green Bay, Wis.- based BelGioioso Cheese Inc. expanded its BelGioioso Snacking Cheese line with 1.5-ounce packages of Provolone & Genoa Salame Snacking Rolls, for a savory, protein-packed snack. “Consumers are looking for smaller sizes,” says Jamie Wichlacz, marketing public relations manager. “They are also looking for clean labels and smaller cuts.” According to the company, protein is top of mind for consumers for satiety, weight management and sustained energy, and 51% of consumers are seeking out protein-rich snacks for their daily diets. Also new from BelGioioso Cheese is a line of 4-ounce cups, available in Natural Grated Parmesan, Natural Shredded Parmesan, Natural Shaved Parmesan, Natural Shredded Four Cheeses blend and Natural Shaved Salad Blend.

Other Specialty Foods
According to the Specialty Foods Association, citing Mintel, SPINS and IRI, frozen desserts increased by 31.1%. My/Mo Mochi Ice Cream makes ice cream treats that are covered in rice dough. The bite-sized treats are merchandised in a separate freezer for on-the-go consumers. “We see the snacking occasion as the holy grail for ice cream,” says Russell Barnett, CMO of My/Mo Mochi Ice Cream. “Bite-sized, portion-controlled and chew-worthiness is what is bringing mochi ice cream snacks from center store to the perimeter prepared foods section of the store while driving more consumers back to the frozen aisle.”

Snacking is a big trend now in general, but the bigger trend is that grocery is responding to consumer demand for innovative, interesting foods. “It’s as much about the adventure as it is the shopping list,” Barnett says. “The transitional moment for success in supermarkets is when an item becomes a staple at home and in everyday eating occasions.”