Specialty Food Trends Post-COVID - Vermont Specialty Food Association October 7, 2020
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Specialty Food Trends Post-COVID
Vermont Specialty Food Association
October 7, 2020
Today’s Agenda
• Specialty Sales Performance Before,
During, and After COVID-19
o Category 1: Essentials
o Category 2: Plant-based
o Category 3: Snacks
o Category 4: Beverages
• Emerging Food Trends
• Q&A
Methodology / Data Sources
The 2020-21 State of the Industry report includes the following sources and
features:
• Food and beverage sales data across 63 categories during 2017-19, based on
figures from SPINS/IRI, and our estimates for Internet and foodservice channels
• SPINS/IRI data during January-April 2020, as compared to YA, with sales by
channel for 35 key categories
• Our estimated forecast for the retail specialty market through 2024
• One-on-one interviews in March/April with key members of the specialty food
supply chain
The Full Report and 10-Year Category Tracking and Forecasts is available for
purchase. Visit specialtyfood.com/state2020
Where We Are & Where We’re Headed
The maturing specialty retail market got a major lift in 2020, and we expect 2021 will also be higher
than average, before the market normalizes. By 2024, tracked sales will top $90 billion in retail.
$100,000 6.1% CAGR 2015-19 5.8% CAGR 2020-24f 14%
13.3%
$90,000
12%
$80,000
$70,000 10.0% 10%
9.1%
YOY growth
$60,000
$ millions
8%
$50,000 7.1% 6.6%
$40,000 5.7% 6%
4.8%
$30,000 3.9% 4%
$20,000 3.0% 3.0% 3.1%
2%
$10,000
$0 0%
2014 2015 2016 2017 2018 2019 2020f 2021f 2022f 2023f 2024f
Conventional, Specialty & Total Products
Forecast May 26, 2020
Actual May-Aug was higher – at 15%-17%
Actual sales Forecast sales
COVID-19 Impact – Online Retail
Online specialty = $5.4 billion in 2019,
and 3.4% of total specialty retail sales
132.5%
• Pre-COVID and since
2017, the online
specialty channel grew
133%
• COVID-driven spike
drove many first-time
7.5%
12.8% 10.7% shoppers to order
online
Brick-and-mortar Online retail channel Foodservice Total specialty
retail channel market • Specialty e-comm may
Growth % 2017-19 grow 2x in 2020
Essentials Where We Are
• $28.8 billion in 2019 sales
Essentials (specialty) • 41% of total B&M specialty market
• Growing slightly ahead of pace of
total specialty market (+10%) since
2017
$4,319 $4,218 $3,517 $2,376
• The top 4 categories (cheese, meat,
bread, and water) dominate with 50%
of sales
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cheese Meat Bread
• COVID boost > baking, entrées (Fz),
Water Entrées (Fz) Condiments
entrées and mixes, oils/vinegars,
Plant-based milk (Rf) Baking mixes Oils & vinegars
sauces, seasonings, soup
Seasonings Soup Sauces • COVID bust > specialty items
Beans, grains, rice Entrées and mixes (Ss) Fruit & vegetables (Fz) sometimes passed over for
Pasta (Ss) Nut/seed butters Milk
conventional at first, and then surged
Source: Mintel/SPINS | Sales figures in millions when shoppers couldn’t find conv.
brands
Essentials Where We’re Headed • Grocery retail boom continues: “food at home” growth rate likely 2x normal in 2021 • Essentials categories retain importance with continued sheltering-at- home • Center store revival: driven by consumer need and fast-rising ARPs in perishables like meat, dairy, and eggs • Innovation opps >> upgraded pantry basics, special diet—focused essentials; culinary exploration and new discovery; emphasis on value, convenience
Plant-Based Where We Are
Plant-based specialty • $5 billion in 2019 sales
• 7% of total B&M specialty market
• Growing 3x the pace of total
specialty market (+27%) since 2017
43% 9% 7% 7% 6% 28% • Plant-based milk (Rf) dominates
• Nearly 80% of all sales in chilled
categories, and are growing fastest
• COVID boost > most key categories
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% (P/B milk, other dairy, meat). Shelf-
Plant-based milk (Rf) Plant-based meat alternatives (Rf) stable items
Yogurt and kefir Plant-based meat alternatives (Fz)
Desserts (Fz) Remaining plant-based food/bev • COVID bust > specialty didn’t grow
Source: Mintel/SPINS
any faster than conventional (P/B
milk)
Plant-Based Where We’re Headed • Huge runway for growth: particularly in specialty P/B (+10-20% annually through 2024) • P/B in all channels • Trial triggers greater usage: the largest P/B categories (meat/dairy alternatives) gateway for new users who then expand their purchasing into other categories • Similar trajectory to other lasting segments (e.g., organic, gluten-free) with “occasionals” vastly outnumbering “dedicateds”; younger generations pass onto kids • Improved ARP’s vs. meat/dairy due to competition and efficiency gains • Innovation opps >> cleaner versions of popular favorites; jockeying for brand/category leadership; local/regional/small batch
Snacks Where We Are
Specialty snacks • $18.8 billion in 2019 sales
• 27% of total B&M specialty market
$4,204 $2,639 $2,233
• Growing slower than total specialty
market since 2017
• Chips, chocolate, and yogurt account for
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% nearly half of all snack sales
Chips, pretzels, snacks Chocolate & other confectionery • Specialty snacks are extremely popular,
Yogurt & kefir Juices & functional beverages (Rf) accounting for as much as 65% of all
Nuts, trail mix, dried fruit Cookies & snack bars
sales (incl. conv.) in given categories
Wellness bars & gels Salsas & dips (Rf) • COVID boost > specialty snacks often
Crackers & crispbreads Appetizers & snacks (Fz) grew faster than conventional
Salsas & dips (Ss) Jerky & meat snacks
Rice cakes
• COVID bust > most snacks (especially
sweets) were passed over in
Source: Mintel/SPINS | Sales figures in millions March/AprilSnacks Where We’re Headed • Specialty snacks’ growth phase has passed: the near future will be below- trend, driven by the big categories (chips and chocolate). • Specialty snacks should grow faster than conventional in next year • Snacks are “showcase” items for the industry. They’re the “flash” even if they aren’t driving growth. They get shoppers in the store, and with a hefty 27% of sales, they’re nearly “essential” • Grab-and-go wellness snacks like yogurt, bars, and RTD bevs will rebound gradually as workers and students return to offices and schools • Innovation opps >> Value-premium positioning; plant-forward; keto/paleo; grain-free; sweet/savory; local/regional/small batch
Beverages Where We Are
Specialty beverages • $12.2 billion in 2019 sales
• 17.5% of total B&M specialty market
• Growing at pace of total specialty market
(+9%) since 2017
$3,604 $2,376 $1,722
• Coffee, water, and fresh juices dominate
with more than 60% of all beverage sales
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Coffee and hot cocoa (non-RTD) Water
• COVID boost > coffee (non-RTD),
Juices and functional beverages (Rf) Tea and coffee, RTD (Ss)
water
Juices (Ss) Tea (non- RTD)
Soda and carbonated beverages Tea and coffee, RTD (Rf) • COVID bust > grab-and-go items like
Functional beverages (Ss) Drink mixes and concentrates juices (Rf), coffee (RTD)
Juices and beverages (Fz)
Source: Mintel/SPINS | Sales figures in millionsBeverages Where We’re Headed • Beverages growing at market average: growth leaders will come from non-RTD (coffee & hot cocoa, and tea) as well as water. • RTD Bevs as a segment needs fresh ideas to grow. The sector (particularly fresh, but also coffee/tea) surged prior to COVID and is now maturing. It’s oversaturated with me-too brands. • Innovation opps >> Coffee (non-RTD), regional/local roasters; shelf- stable RTD, low-sugar; functional (immunity, stress, sleep, detox, brain); “hard” varieties; local/regional/small batch
Wrap-up
• Expect some more of the same:
• The pandemic economy will be in full force through 2020, and will slowly start to wane early
next year
• The growth rate for sales of food at home in 2021 will be roughly twice what it would have
been without the pandemic
• Specialty essentials will be the main beneficiary of the continued somewhat-sheltering-
at-home trend; a diverse range of innovation will keep consumers engaged
• Plant-based specialty has a lot of runway left in breadth/depth of product offerings,
and will continue in a secular high-growth phase
• Specialty snacks already had its growth phase; the near future will be below-trend,
driven by big categories (chips and chocolate); grab-and-go items will rebound some
• Specialty beverages are pacing growth of overall specialty market; RTD will rebound
slowly as people return to former routinesWrap-up • What’s resonating in the “next normal”? Health and wellness; culinary exploration; transparency and sustainability • SFCs’ ethical and economic awareness is shifting as they seek to learn about and support women-owned, minority-owned businesses and local/regional brands; CSAs are maxed out, and farmers are selling DTC • Innovation pace will continue to be under-avg. as SKU optimization continues; target innovation to Gen-Zs and Millennials especially • Consumers trading down in price but not positioning. They’re committed to the environment, organics, plant-based, and non-GMO; PL Brands are rising to meet this need
Trend Picks From the SFA Trendspotter Panel
Trend
Sparkling, functional,
global teasShaka teas made with HopLark sparkling HopTeas,
mamaki leaf from Hawaii brewed like beer with hops
HopTeas and BOS
BOS sparkling unsweetened
rooibos red tea
Thaiwala Thai Tea
concentrateTREND
Global sauces and
seasoningsBurma Love Foods Fermented
Angkor
Tea Leaf Dressing
Cambodian Food
Kroeung Prawlak
KPOP Food
Kimchi Mayo
SauceTREND
Oat milk-based dairy
alternativesCalifia Oat Creamer
Endangered Species
Chocolate Oat Milk
Chocolate Bars
Rise Brewing Co. Oat Milk
Latte Nitro Cold Brew CoffeeTREND
New directions for plant
based: Fruit and vegetable
focus; more snacksThe Daily Crave plant-protein-
enriched Beyond Churros
Mooney Farm’s Tomato Jerky
Pitaya Plus Frozen Organic Bite-Sized
Jackfruit and Passionfruit3 Trends from Specialty Food LIVE! • Global and regional American “travel” through food • Connecting products with the stories behind them • Holiday 2020: Recreating traditional foods and giftable staples
Global and regional American “travel” through food • Scandinavia, Cambodia, Senegal • Ex: sea buckthorn, chile pastes, fonio
Connecting products with the stories behind them • Is the company women, diversity, or LGBTQ-owned?
Holiday 2020: Recreating traditional foods and giftable staples • Ex: Mexican hot chocolate, filled candy canes, pasta, rice, plant- based, cocktail kits, keto, upcycled foods, alternative sweeteners
Questions? education@specialtyfood.com
Full Report and 10-Year Product Category
Tracking and Forecasts:
specialtyfood.com/state2020You can also read
