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Tuesday, October 7, 2014

Who is Today’s Specialty Food Consumer?

With the specialty food market approaching 100 billion dollars (it’s expected to reach that number in 2016) this gourmet-centric universe is growing roughly three times as fast as the regular food market. In 2014, 145 million people—that’s 59 percent of U.S. consumers—purchased specialty foods, according to this year’s Today’s Specialty Food Consumer Report produced by the Specialty Food Association and Mintel International. These two organizations have been conducting research together for 10 years now, and this year they’ve produced some highly detailed, top-level statistics on just who is purchasing specialty foods, how they’re using these products, as well as their attitudes, interests and concerns.

At The Core
Core specialty food consumers defined by Mintel are aged 18 to 44; affluent, earning more than $75,000 annually; more likely to buy specialty foods from a broader range of retailers; the biggest weekly spenders on grocery and restaurant food; and ones who spend a larger percentage of their food dollars on specialty products each week. Within this group, 18-24s and 35-44s are most likely to purchase the largest range of specialty food categories. 

Infographics and images courtesy
of the Specialty Food Association
“Specialty foods are considered foods that are premium quality,” says David Lockwood of Mintel. “These may be made by small or local manufacturers, they may have the very best ingredients available, they may be premium, fancy or gourmet, and they’re often, but not always, more expensive.” The difference in definition this year is noticeable—by fine-tuning the examples and narrowing the definition, the Association is able to better illustrate the premium status of the foods. Food once considered niche has actually moved into the mainstream—for instance, Greek Yogurt has been replaced by chutneys in this year’s survey. And while the figures represent a drop from 74 percent of consumers purchasing specialty foods in 2013 to 59 percent this year, the difference is a matter of redefinition rather than a decline in purchases.

The top ten categories that these specialty food consumers are buying range from chocolate (1) and olive oil (2) to cheeses (3), coffee (4), beverages (8), and tea (10). Much of the top ten categories are consistent with 2013, but tea has most noticeably moved up the ladder. 

When surveying popular categories by age group, research found that 18-24s tend to gravitate towards on-the-go items. Snacks, condiments, cookies and chocolates were all prominent purchases for early Millennials who bought these products for guests, gifts and the office. Ready-to-eat prepared foods as well as cooking sauces, rice, quinoa and others were popular among 25-34 year olds. Baking mixes, cooking sauces, and products that offer short cuts in home cooking got the attention of 35-44 year olds who might be time pressed juggling families and careers. Additionally, since 2006, women, younger adults, affluent households, and Hispanics have been the most likely purchasers of specialty foods.

These specialty food consumers value food tremendously and make that known with their wallets. They’re the biggest weekly spenders on both groceries and restaurants, and they’re most likely to spend a larger percent of their food dollars on specialty items. The research has put a spotlight on spending habits, and these consumers are happy to pay more for better quality food—be it beer, cheese, meat, or farmer’s market produce.

Sustainability is Key
According to the 2014 Consumer Report, 84 percent of specialty food consumers believe it’s important to buy sustainably produced food, and retailers can benefit by attracting the subset of specialty food consumers who purchased products with sustainable and ethical claims in the past six months. Grocers should stock an array of ethically produced food and beverages and clearly call out their claims. The most commonly purchased food and beverage product claims are all-natural (62 percent), organic (56 percent) and locally sourced (47 percent). What’s more important to comprehend is that nearly ¾ of specialty food consumers support companies that practice sustainability as a whole.

Digitally Native
The digital niche (within the specialty food market niche) is growing, and almost half of specialty food consumers said that they had bought gourmet products online. These consumers are more active on social media to talk and learn about food than ever before, and Millennials, the most dominant buying group, are leading the pack. It’s their second nature to purchase online and give recommendations online. For specialty food consumers, the sheer number of time online exceeds two hours per day outside of work—they’re engaged in the gourmet food universe and they’re using these platforms for the purpose of connecting and sharing products, ideas, brands and retailers online.

Piece of the Socioeconomic Pie
The aging U.S. population (over-55’s) are actually the fastest-growing age group, but they are the lightest users of specialty products. Retailers and wholesalers must also take into account the delayed maturation of Millennials (they’re getting married, starting families, and buying houses later than any generation prior). The combination of both means that the industry is vulnerable to a slower market growth going forward. To combat this, companies and retailers must either begin marketing to an over-55 crowd, or push for the quicker maturation of Millennials’ purchasing decisions—the latter seeming more effective.

Additionally, brands must take into account that the industry’s greatest consumers are ones that bring in more than 75K annually—however, this is only 30 percent of the U.S. population. Find ways to market to buyers who don’t make exceptional incomes.

For more information and to check out the full 2014 Consumer Report, visit the Specialty Food Association.