Food Merchant Outlook – 2019: Specialty Foods Take Over

Within the past few years, the market for high-end foods and specialty foods has increased dramatically. The industry growth has been skyrocketing with gourmet, specialist, and artisanal businesses. 2019 looks like a promising year for the food business but, 2018 has taught the industry many lessons. With current growth trends and new technology surfacing the market, the act of buying food has become more digitized and competitive.

Winners and Losers For 2018

For 2018 it has been a great year for the food industry. The Specialty Food Association (SFA) announced back in June 2018 that the specialty food business remains one of the highest growing segments with an increase of 11% from 2015 to 2017, also hitting $140 billion in sales last year. Sales through food services increased by 12.8% and those who have been taking advantage of the tech boom have experienced an increase in online sales by 21% within the United States.

Who Won?

The Good Food Merchants Collaborative sponsored the Good Food Awards, that helped recognized independent merchants and food crafters for their success within the year. With over 2,000 entries the best of the best specialty foods were chosen to be the best:

Beers: Almanac Beer Co. (California), Full Sail Brewing Company (Oregon), Ninkasi Brewing Company (Oregon), and Perennial Artisan Ales (Missouri)

Charcuterie: Olympia Provisions (Oregon)

Cheese: Briar Rose Creamery (Oregon), Cascadia Creamery (Washington), LaClare Farms Specialties (Wisconsin), Laura Chenel’s (California)

Coffee: Noble Coffee Roasting (Oregon)

Who lost?

The ones who are losing in 2018, are the segments in the food industry that aren’t taking advantage of the time in which they live and the resources they have to help improve the customer experience. The ones who are also losing are the companies and food groups who aren’t delivering the quality that food specialty foods provide and the exclusivity of not having food mass produced. Many buyers now days are very aware of what they’re eating and how it was made and where it came from.

The Future of Specialty Foods

The future looks bright for specialty foods in 2019 and further beyond. David Lockwood, director of Mintel Consulting spoke at the SFA’s Winter Fancy Show and he had a few words on the future of specialty foods, “The way we have measured specialty foods, it will go from 14.8% of the total market to 18%” in 2021, Mr. Lockwood said. “That’s impressive, but it still leaves room for growth.” Mr. Lockwood went on to speak about trends in the way customers shop and in what categories. At the moment light buyers are purchasing within 3 categories but, many of those people will expand and wander off into other categories as years pass by.

Gourmet Insider posted in July 2018 about the Culinary Visions Panel Forecast for 2019. From a survey of over 5,000 people, it explained 5 areas in where customers and food industry professionals found most important.

  1. 73% of customers reported that for 2019 they would like to see food that isn’t only delicious food but, functional as well where the food is packed with nutrition.
  2. Consumers also reported that many of them have stopped eliminating foods but, have started to limit what they eat. 66% of people have stated that they prefer to eat foods that make them feel good instead of watching their weight.
  3. Ethical concerns have also become a big talking point for 2019 where many consumers would like to see less packaging and also ethical sourcing for ingredients.
  4. Many consumers have also expressed how they would like to healthier to-go options. Many would like to see an increase in vegetables and fruits in their diets but, still keeping meat in there.
  5. Expanding your horizons when it comes to food has become a big thing as well for consumers in 2019. Many consumers have expressed how they would like to see more international foods and ingredients from countries in Latin America, but also from the Middle East and Asia.

Consumers are looking for high quality produce and ingredients.

Tech in the Food Industry

Industries like food and tech have been growing dramatically over the past few years. With both of them growing at such a great pace they were bound to collide. With the increase in economic stability within the United States, more and more people have been consumed with busy work schedules. People that are busy all the time have found that buying groceries at the store has become a thing of the past with the accessibility brought by apps that help you order your food and groceries. In a CNBC article, Amelia Lucas states that, “By 2019, more than one in five adults will use an app to order groceries.” Mercato’s platform enables you to offer your customers the option of ordering online. Mercato handles all set-up, ordering, and deliveries.  

How to Avoid Falling Behind?

The last thing you need in such a competitive market is to fall behind and let your competitors innovate while you’re watching them keep up with and shape the market.

With the above information, you can see that 20% of adults will be ordering groceries with an app. If you don’t have this capability your store could become redundant and you could lose business. Mercato can get you online, set up online ordering and handle delivery fulfillment as well as provide many other features, such as building your online presence.

Getting involved in the tech world as an owner of a food store is crucial not only for your customer’s experience but, also for your sales. We’ve seen the trend with retail stores how platforms like Amazon have eliminated the need to go to an actual store for whatever product you need. Finding a platform like Mercato not only lets you expand your reach to old but, to new customers as well.

Conclusion

This year has been a great year for specialty food industry, not only due to high sales and increases in profits but, also for the high engagement from the consumers. More recognition has been given to the hard-working companies that provide these great products. Focusing on 2019, there are many trends that you need to get on if you’re a merchant or shopper. Consumers are driving towards higher quality foods and “hero” ingredients, not only within the “healthy food” category. We now live in a digital world where everything is accessible by the click of a button. Contact Mercato’s team and see what is needed to help improve your shop.