Specialty Food Industry Sales Rose 2.7 percent in 2009

Yogurt Showed Most Growth; Product Launches Declined

New York, N.Y. -- Sales of specialty foods and beverages grew by 2.7 percent in 2009, with much of the growth in the fourth quarter. Total industry sales reached $63.09 billion, with $50.34 billion at retail.

The specialty food industry was impacted by the recession. New product introductions dropped by 37 percent last year, with slippage in nearly every category as manufacturers slashed spending on research, development and marketing in favor of concentrating on improving sales of existing lines.

But tighter spending meant good news for those specialty foods that reflect economical meal choices. Sales of beans, grain and rice, and shelf-stable pastas, each rose 30 percent since 2007.

These are some of the findings in The State of the Specialty Food Industry 2010, an annual report from the National Association for the Specialty Food Trade (NASFT) prepared in conjunction with Mintel International, a market research firm. The report tracks sales for specialty food segments with data from SPINS and ACNielsen.

The NASFT defines specialty foods as foods of premium quality that are often made by small or local manufacturers or have exotic or ethnic flavors. Of these foods, the top five categories of foods most purchased last year were cheese; condiments; frozen and refrigerated entrees, pizzas and convenience foods; chips, pretzels and snacks; and frozen and refrigerated meats, poultry and seafood.

"The data reveals an industry that continued to grow despite the economic challenges that confronted the U.S. and the world last year," said Ron Tanner, Vice President, Communications and Education for the NASFT. "This year, manufacturers of specialty food are working hard to maintain that momentum with new go-to-market strategies."

Here are highlights from the report:

 Specialty food accounts for 13.1 percent of all food sales at retail.
 Yogurt and kefir is the fastest growing specialty food category; sales jumped 38.9 percent in 2009 to $830 million.
 Mediterranean, Latin and Indian were named as the three fastest emerging cuisines.
 Retailers report that 23.4 percent of the foods they sell are local, produced within 250 miles of the store.
 85 percent of specialty food manufacturers make or market natural foods.
 56 percent of specialty food manufacturers report sales growth for 2009, but 10 percent saw sales declines of greater than 20 percent.
 Sales to foodservice represented 20 percent of specialty industry food sales in 2009, or $12.75 billion.
 Mainstream supermarkets remain the predominant seller of specialty foods, with 74 percent of sales.
 Local, sustainable and eco-friendly products were identified as the items that will grow the most in the coming years.
 New product introductions dropped to 2,318 in 2009 from 3,705 in 2008.

The State of the Specialty Food Industry 2010 research was published in a summary report in the April 2010 issue of Specialty Food Magazine. The summary report is available for $30 for non-members of the NASFT at www.specialtyfood.com.

The NASFT is a not-for-profit trade association established in 1952 to foster trade, commerce and interest in the specialty food industry. Today there are more than 2,900 members in the U.S. and abroad. For further information on the NASFT and its Fancy Food Shows, go to www.specialtyfood.com.

Ron Tanner, VP, Communications & Education; 646-878-0115, rtanner@nasft.org
Louise Kramer, Communications Director; 646-878-0130, lkramer@nasft.org