NEW YORK -- Led by jerky and other meat snacks, the snacking segment of the specialty-food market jumped 16% in 2016. Snacking represents 28% of the entire specialty-food market, with sales reaching $16.3 billion in 2016.
Sales of specialty foods continue to grow as more consumers turn to the category out of a desire for products that are better-for-you, natural and organic, and have bold, innovative flavors. The Specialty Food Association's annual State of the Industry report examines the $127 billion specialty-food industry, which as a whole grew 15% between 2014 and 2016. Largely fueled by small-business growth, the organization also attributes a jump in sales to product innovations and wider availability of specialty foods through mass-market outlets.
"Consumer preferences for specialty-food products are growing at double digits, outpacing mainstream food staples," said Phil Kafarakis, president of the Specialty Food Association. "The products our members create appeal to consumers looking for authentic tastes and foods with fewer and cleaner ingredients. Consumers are also making purchases wherever they happen to be, changing the retail food environment. The eagerness of all retailers including mass market, e-commerce and foodservice to capitalize on these consumer trends is transforming the marketplace."
Other highlights of the report include:
- Specialty-food manufacturers' profits have risen to 18%, despite some growing associated costs in ingredients, production, certification, etc.
- Gluten-free, non-GMO and convenient-to-prepare products led innovation plans for manufacturers in 2017.
- 70% of distributors plan to expand their specialty-food product count in 2017.
- Specialty-food retailers' average transaction size increased 19% in 2016.