Retailers go ‘local’ at Fancy Food Show
Products organically made within 200 miles of the retail outlet and without wheat were the hit of the 2015 Summer Fancy Food Show in New York this week. It seemed that every other booth was promoting locally made, organic or gluten free items. Even Walkers, the famous shortbread biscuit maker from Scotland, is going gluten-free, introducing three new cookies using rice flour instead of wheat to the American market.
Retailers interviewed at the show said "local" is the most important product claim today, and predict it will remain so in three years. In addition, about two-thirds surveyed are now selling more products with non-GMO claims.
The Specialty Food Association, which sponsors the Fancy Food Show, reported that the top ten best-selling categories have shifted since 2013. Cheese is still the biggest category, with $3.7 billion in U.S. sales, but coffee and cocoa have jumped over frozen and refrigerated meat, poultry and seafood for second place. Bread and baked goods rounded out the top five.
Source: Walkers
The fastest growing categories in unit sales are refrigerated pasta and pizza sauces, up 78 percent since 2012, followed by refrigerated pasta and eggs, both up 53 percent. Other notable gainers in unit sales are functional beverages, nut and seed butters and energy bars and gels. Overall, unit sales of specialty food grew 13.6 percent.
Discussion Questions
Which of the current food sales drivers — including locally-produced, organics, gluten-free, etc. — do you think will be the most important for retailers over the next year? Which of these, if any, do you think will be most relevant in five years?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
I can’t believe gluten-free has legs, but maybe. There are very few people who are really gluten-intolerant. I believe it’s a fad and will fall off the radar screen, especially if the U.S. catches up with other countries on non-GMO grain.
Organics and locally-produced will be more long-term drivers. Probably organic ahead of locally produced (It’s not logical to want something locally produced with pesticides and genetically modified seeds), but ultimately they are pretty intertwined.
Locally produced messages are hitting a home run while organic and non-GMO are solid triples.
Chalk this up to consumers being more aware and informed. “Factory” anything scares off most every consumer who has a choice.
Although I have a granddaughter who is celiac, I think gluten-free is a niche product. It has some upside potential assuming the taste profile continues to improve and non-celiacs adopt gluten-free as a lifestyle option.
Organic and natural have been solid for a number of years. I think that locally-produced has a significant growth potential for a variety of reasons: 1. Support for local businesses, 2. In the fresh arena, farmers are the most highly regarded profession, 3. Fresh or not, local appeals to the carbon footprint concerns associated with sustainability.
Locally-grown has the warm-fuzzy feel to it, however I’m not certain that consumers look for that as much as they are now looking for nutrition/health-infused foods. I do know that in the U.S. there are fewer people on a diet than there were 20 years ago, so weight loss is actually not the key driver. Again, health and nutrition, as opposed to weight loss, are the trends I see continuing to grow in demand over the next couple years.