Specialty Food Retail Sales Reach $70 Billion

NEW YORKRenewed consumer confidence helped propel sales of specialty food and beverages 7.7 percent to $70.32 billion in 2010, according to a new report the National Association for the Specialty Food Trade (NASFT).

The report, The State of the Specialty Food Industry 2011" tracks sales of specialty food through supermarkets, natural food stores and specialty food retailers, and includes research from interviews with food retailers, distributors, brokers and others involved in the supply chain.

Data reveals total U.S. sales of specialty foods in 2010 were $70.32 billion, with $14.4 billion represented by sales to the foodservice industry. Specialty foods represent 13.1 percent of all food sales at retail, and 76 percent of specialty food manufacturers reported a sales increase in 2010, with 36 percent up more than 20 percent.

Cheese continues to dominate specialty foods, pulling in $3.23 billion in sales in 2010. Rounding out the top five categories are meats, chips and snacks, bread and baked goods and condiments. Functional beverages are the fastest-growing specialty food category, followed by yogurt and kefir.

Last year specialty food makers focused on their existing items, with new product introductions about even with 2009. Launches of premium private-label products declined to 455 in 2010 from 518 in 2009, demonstrating a return to branded products.

Gluten-free introductions showed big gains, with 119 new products in 2010 versus 67 in 2009, and Mediterranean and Indian were ranked as the most influential emerging cuisines.

According to the report, supermarkets remain the largest seller of specialty foods, with 72.3 percent of sales, but their share is dipping as specialty and natural food stores attract more consumers.

"The rebound is impressive," says Ron Tanner, Vice President, Communications and Education for the NASFT. "As consumers feel more confident about the economy, they are coming back to specialty foods." In 2009, sales rose by a more tepid 4.5 percent.