The Current State of the Specialty Food Industry in 2018

 

Specialty foods are unique and highly valuable food items. Typically, this type of food is produced from small amounts of high-quality ingredients, which is the reason behind their above-average price tag, but also their overall quality and health benefits.

In 2018, The Specialty Food Association released a two-year study titled The State of the Specialty Food Industry. Author and researcher, Denise Purcell discovered significant changes in the food industry, with a focus on specialty foods. The study highlights the impact specialty foods have on sales and consumer decisions. Here is a brief overview of her findings and the current state of the specialty food industry.

Reasons Behind the Rise of Specialty Foods

Specialty foods might seem like a trend, but its roots span much deeper. Thanks to FDA regulations on labels and nutrition guidelines, more people are aware of the health risks involved with food and beverages. Ingredient labels help people to understand what they eat and drink, and watch out for ingredients like sugar, artificial flavoring, or chemical food dies, to improve health.

Consumer demand for higher quality food is another major contributor to the rise of specialty foods. It is affecting everyone in the supply chain. Food manufacturers are taking more care when sourcing raw food, while distributors and suppliers, like UNFI and Whole Foods, are changing the landscape of the natural food industry.

All of these changes are contributing to much higher demand and supply of specialized food, and choice remains the main reason behind The State of the Specialty Food Industry study.

The Rise of the Specialty Food Industry

As of this year, 65% of consumers purchase specialty food. Specialty food dominates sales revenue as well, with a peak income of $140.3 billion in both retail (78.4%) and foodservice (21.6%), an 11% increase from 2015.

Sales from specialty food and beverage have a share total of 15.8%, with plant-based foods dominating the first four spots. Due to the increased interest in organic produce, their input is expected to rise over the next five years.

When it comes to consumer retail purchase, mainstream channels hold an 82% share of total retail sales. However, the biggest winners are both the physical and online versions of the food service. Their sales have doubled in size over the two year period from 2015 and outgrew regular retail options.

On the other hand, retail makers are increasing their offer of specialty foods, which is raising their sales input, but it is growing at a much slower pace. Major chain supplies have only seen significant growth potential in the convenience, drug and vending channels.

When it comes to consumers and who is purchasing specialty foods, demographics reveal that the most significant number of consumers belong to the iGeneration (18-23).

Other Millenials are also significant consumers because generally, these groups have the highest awareness of what they consume. They also make the decision to buy specialty foods based on many different non-traditional factors, like benefits to health, environmental impact, and even trendiness.

Top Ten Selling Specialty Food Groups in Retail

In 2017, the top-selling retail products reached a combined total of almost $29 billion out of around $1.4 trillion of total food spending. It included fresh, refrigerated, frozen, plant-based, and health-focused food, which also had the most notable growth in retail sales.

What’s interesting, on the other hand, is the growth rate of specialty foods which peaked at a combined 12.9%. That’s 11.5% more when compared to all other food, which only achieved a 1.4% growth.

Seven groups in the top ten are chilled or frozen foods, which indicates the demand for other specialty foods will have to increase to create a genuinely diversified offer on the market. Here is a brief overview of the top ten specialty food groups and their performance on the market in 2017:

Cheese and Plant-Based Cheese – cheese achieved the highest sales total, reaching little over four billion in sales. But it’s growth was relatively insignificant with an average of just 6.6% from 2015, which indicates a stable demand for cheese.

Frozen or Refrigerated Meat, Poultry and Seafood –  frozen meat in all its forms reached $3.8 billion in sales over the period. What’s most interesting is that it had the lowest change over the two year period between 2015 and 2017, with an average growth of just 3.3%.

Chips, Pretzels, and Snacks – this group is characterized by a top three spot when it comes to sales in 2017 with $3.8 billion (little less than the previous group). However, it had a below-average growth rate for the observed period with 11.8%.

Non-RTD Coffee and Hot Cocoa – owing to the love of coffee in the United States, it is not surprising that this specialty food group earned $3.3 billion in retail sales. Still, the traditionally loyal consumer base also means it had a low growth rate of only 5.4% over a two-year period.

Bread and Baked Goods – bread is a staple food group and earned an expected $3 billion in retail. What’s surprising though is the above-average growth of 18.1% from 2015 to 2017, meaning demand and consumption has risen significantly.

Chocolate and Other Confectionery – chocolate and confectionaries brought in a combined sum of $2.3 billion in sales last year. And according to the data collected from the previous two years, they exhibited a slightly below average growth of 10.8%.

Yogurt and Kefir – healthier dairy-based products like yogurt and kefir massed a total sum of $2.2 billion in retail sales last year. However, the market growth was excellent in the previous two years, and the specialized food group saw an increase of 20.6%, which is the third best value among the top ten groups.

Frozen Deserts – the frozen deserts group has a strong eight position in retail sales, earning a total sum of 2.2 million. More importantly, frozen deserts achieved the highest growth rate out of all the groups in the top 10 with 41.6% between 2015-2017.

Refrigerated Entrees – ready-to-eat refrigerated entrees gained a combined amount of $2.1 billion from retail sales, which was enough to secure them ninth place. But the good news for suppliers and distributors is that this group of specialty foods takes second place when it comes to exponential market growth with 27.2% change from 2015.

Frozen Lunch or Dinner Entrees – frozen lunches and dinner entrees performed similarly to refrigerated dinner entrees taking $2.1 billion from sales, which is a 13.1% of growth during a two-year period. But if you combined the two similar last entrees, they would top the list with $4.2 billion in revenue and 40.3% change.

The Bottom Line

Observing the changes in the specialty food market Denise Purcell remarked on future growth: “We see the future growth of the [specialty] category being driven more by foodservice, convenience, and vending. We’ve seen a lot of growth in drug (CVS, Walgreens, etc.) as well. You’ve got all these different players now that want to carry some of these products.

If you want to know more about the general state of the food and beverage industry, stay up to date with the latest news. Use the most recent information as an opportunity to improve your offer, and boost your bottom line.

Please visit our website at www.cascadiamanagingbrands.com

Why User-Generated Content is What Consumers Crave

Beverage Marketing post by Bill Sipper

Beverage Marketing: Why User-Generated Content is What Consumers Crave

Fans create brands. And when it comes to brand marketing, there is nothing stronger than peer-to-peer promotion. Brand ambassadors and fans motivate other people to choose and use your products and services, like your beverages. In marketing, this is called user-generated content (UGC), and it’s what beverage companies need to offer their consumers because it’s how they want to be marketed and what they crave. Beverage Marketing is strong in peer-to-peer promotion.

UGC Increases Engagement

User-generated content relies on a successful content strategy.  In turn, follows the latest industry news and allows for such marketing efforts to be included. It also relies heavily on the technology behind promotional channels beverage business use.  There are a lot of different types of UGC content:

  • Blogs – relieves some of the pressure from the marketing team and gives consumers a highly personal perspective on the brand;
  • Comments – increase engagement on websites and social media and promote the brand through peer-to-peer communication about the brand;
  • Reviews – impact consumers psychologically by increasing trust and credibility, and have the potential to affect 46% of consumer decisions.
  • Images – establish visual contact between consumers and the brand through the direct use of the product and its promotion of personal and official online channels;
  • Videos – increase brand awareness and brand perception through different interpretations of the brand and the direct use of the product.

Content like this requires promotion, so consumers become aware of its existence. Targeting different channels, allows more users to take part in and generate content.

Additionally, beverage companies should consider including consumer incentives for consumers to create content. Campaigns can include prizes, like discounts, special offers, a free supply of drinks, or branded material like flash drives, T-shirts, and even concert tickets. Just remember to make them useful.

UGC Builds Valuable Relationships

Brand identity relies a lot on the relationship a company has with its audience. Brands have to look towards aligning their value proposition with their brand message – core beliefs, mission statements, and goals. This type of communication is customer-centric and focuses on establishing a shared system of value on which a brand can build a relationship with its audience.

User-generated content can make this happen for beverage companies. It essentially allows consumers to take part in the development of the brand. For example, if your company wants to develop a new drink, it issues a campaign that gives an opportunity for customers to come up with a name for it. It empowers consumers, and they are more likely to consume the drink regularly (interact with the brand.)

UGC Inspires Loyalty and Creates Fans

According to marketing professional Kevin Kelly, a brand only needs 1000 true fans to succeed. In that sense, beverage companies need to focus their attention on returning customers and allow them to create user-generated content as a reward. In turn, this creates a loyal following of faithful fans, who know the company values their efforts.

It also creates trust – an essential element of loyalty. And with mutual trust coming from both sides, fans will become brand ambassadors of your company promoting the company to other consumers (what you want,) while you continue rewarding their loyalty (what they want.)

Conclusion on Beverage Marketing

A brand is only active if it has a strong following. And for a beverage company, beverage marketing is following the latest trends in the industry and creating user-generated content campaigns can be a great way to create a loyal backing. After all, it gives consumers the type of promotion they want and crave – created by them and created for them.

5 Ways Your Beverage Business Can Maximize Influencer Marketing

5 Influencer Ways Beverage Business post by William Sipper

Beverage Business Marketing

An influential voice has the power to get people to listen, change their opinion and impact their decision. Therefore, influential people can resonate with their audience to benefit brands in any industry, even the beverage business.

And as one of the latest trends in marketing, beverage companies can use influencer promotion to raise awareness, increase engagement and get more people to drink their product. Here are five ways to maximize the effects of influencer marketing on your beverage business.

  1. Find the Perfect Influencer

When it comes to connecting with a target audience, companies first need to determine a few things, like size, the sphere of influence, and personality before finding the right person for the job.

Micro-influencers have a following between 10,000 and 100,000 followers. It might seem like a small target, but their followers tend to be a tight-knit and loyal community which affect engagement. Micro-influencers are also easier to connect with and are cheaper or even free. And if they’re young, it also means the company is building for the future. In part, that’s why micro-influencers are considered the marketing force of the future.

Macro-influencers have almost celebrity status with several hundreds of thousands or even millions of followers. While their fans might not all be devout, these influencers still have an astounding reach, and their endorsement can have a tremendous impact on brand awareness. However, they are difficult to get a hold of or require substantial contract fees or incentives to promote a company.

It is also crucial that companies research potential influencers to see what kind of content they promote. For beverage companies, this means targeting influential people from the food and beverage industry or people who tend to use those products and publicly review them.

Food and drink bloggers and professional cooks might be the perfect angle to get products promoted through review. Service companies also follow these influencers, which is an excellent way of reaching potential retail partners. As for user-influencers, targeting local social media celebrities is helpful for B2C beverage companies looking to sell more products directly to the consumer.

Finally, once a company selects a shortlist of candidates, it is essential for them to initiate and establish contact with them. Influencer marketing is big business, and it is crucial to determine the price to see if it is a financially viable option.

  1. Target Multiple Channels

Customers respond best to visual advertising when choosing what beverages to buy. Research shows how television food ads have a substantial effect on individual choice, especially in situations when other tasks occupy them. Translated into the digital world, it means there is a definite potential for influencer marketing on visual social media channels, like Instagram for images, YouTube for videos, and Facebook for both.

What companies fail to realize is that these are not the only channels. To truly maximize the impact of influencer marketing, companies need to expand their search and target multiple channels during a campaign. It might open them up to new consumers, or help them find their ideal target audience.

As mentioned, food and drink blogs are a great way to receive the endorsement and promote beverages to potential retailers and service providers. Influencer sponsorship is another way to maximize promotion, whereby a company can sponsor specific segments on favorite online events. It works exceptionally well when targeting smaller audiences engaged with podcasts or webinars.

Trying out different mediums at different points in the campaign in combination with customer surveys can maximize influencer marketing as it shows where a company can have the most significant impact. Plus, companies can learn from major brands in their industry, like Coca-Cola, and use some of the ideas on own their campaign.

  1. Set Clear Goals and Track Them Through the Campaign

Before initiating an influencer campaign, a company needs to determine what it wants to achieve. It can be anything from increasing brand awareness to increasing engagement, or even conversion and sales. A company needs to complete a marketing audit to determine the current situation and decide what aspect of a business to improve.

These goals must be presented to the influencer, and a precise schedule and timeline must be determined. Also, a system of reporting must be included so the impact of the campaign can be monitored and improved if necessary. If targeting prospects through social media, companies should stay away from vanity metrics, and instead, focus on key performance indicators. Only like this can a business determine the success of the campaign and its financial viability.

  1. Building a Relationship with the Influencer

Efficient company culture always centers around people. It’s what makes businesses appear more human. Translate this into influencer marketing, and it’s the role of the company to establish a good connection with their influencers, so they accept company culture and become fans of the brand.

Building a relationship with the influencer makes their work more meaningful, and this resonates with their audience. Regularly rewarding the work, sending free drink supplies or surprising them at their events with branded gifts will create a special bond and make their work more successful.

  1. Create Content that Stands Out

One of the primary goals of influencer marketing is to direct potential leads and customers to the company social media and website, or even the page of its best selling product. As the visitors arrive at this location, they need to see the quality of content and recognize its value otherwise they will feel deceived, both by the influencer and the company.

For beverage companies, it could mean having branded content that is both educational and entertaining. Educational, since this type of material, is aimed at industry professionals looking to partner up. But there also needs to be compelling content in the spirit of the brand message or the different drinks, which can drive sales directly through engagement.

Creating regular high-quality content also helps the influencer select the best material to promote on his channels. At the same time, it also allows the company to remain independent and not rely entirely on the influencer and one marketing strategy.

Accept Innovation

Keeping up with the latest innovation trends in soft drinks also means accepting innovation when it comes to marketing. It means staying on top of the latest industry insights, to realize the potential and help the business grow. And creating a company that’s a leading influence in the industry.

Mobile Apps Influencing F&B Industry

Mobile Apps Impact by William Sipper

How mobile apps are influencing the food and beverage industry

We live in the age of mobile phones, and the majority of smartphone owners use their phones to engage in multiple activities. The impact of mobile apps on the food and beverage industry is continuing to create change.

Consumers love to share culinary experiences and give recommendations on social networks with photos as evidence. This takes customer influence to the next level. Restaurants are also using mobile apps to help streamline customer service.

On-demand food delivery apps

These apps are extremely popular with consumers who are very busy or prefer not to cook. Fewer customers may be attracted to a physical location, but the ease of online ordering usually makes up the difference in more orders. Discounts for new customers and specials can attract more customers.

This change is difficult for less tech-savvy restaurant owners not listed on apps but listing a restaurant, or even placing adverts on these apps can significantly increase traffic to an establishment and they need to explore this to remain competitive.

Reservation apps

These apps make it easier to find reservations at restaurants where you want to eat. OpenTable is one of these apps. One of the problems of such apps is no-shows at restaurants after bookings have been made. This means restaurant owners miss out and it reflects on the app too. Apps and restaurants both need to continue to explore and improve these new ways of doing business.  In turn, customers who use them need to play the game too.

BonApp is a popular app used in China. It lists all the restaurants in the largest Chinese cities and can also be used in Singapore, Bangkok, Taipei, and Tokyo. It is simple to use, and restaurants are classified by cuisine style, price, location proximity, customer rating and the possibility of delivery.

Users can use photos of meals with their comments. Users are even linked to maps to find out how to get to the restaurant and can book a table via the app. On the homepage, a Top 10 of best restaurants in various categories appears on a daily basis.

Review apps

Review apps, such as Yelp, have served to increase attention on customer service. They have also forced restaurant owners to be aware of more than just the need to serve good food. They have to embrace new technologies to remain competitive.

One way they can use social media to their advantage is by using it to create a buzz and amplify audiences for special events such as a special Valentine’s day menu or a St Patrick’s Day Celebration.

Discount apps

An app like DealNews works with restaurants to bring in new customers by offering special deals. Apps like this have influenced how restaurants price menus because they have to take into account that customers may use coupons or discounts.

Individual restaurant app

These can be gamechanger but are usually only used by big companies. Starbucks, for example, gives users the opportunity to order and pay for drinks from their app. Members earn loyalty points by making purchases with the app.

The food and beverage industry is changing rapidly, partly due to the widespread use of mobile apps to streamline processes.

Please connect with me on my LinkedIn or review my press releases and articles published on my crunchbase profile.

Generation Z Most Connected Generation Ever

Generation Z Connected post by William Sipper

Generation Z – Marketing to The Most Connected Generation Ever

Generation Z, or Gen Zers, are born after 1995, and they grew up with internet access and mobile technology. This makes them harder to market to than other generations in that they have developed very selective filters. They have a very short attention span! But it also offers marketers plenty of new and interesting opportunities.

Gen Zers are called digital natives – they are used to using five different digital devices. In turn, if you want to market to them, you need to have a strategy.  This strategy should utilize these devices and unified across all platforms.

Entrepreneurs From The Start

They are often entrepreneurial because they start building up their online presence from a young age. If they find they have attracted an audience, they are likely to want to leverage it to create their own income.

As such they are not just consumers and they cannot be treated as such. Companies need to think about ways to collaborate with them rather than simply marketing to them.

An example of this is the collaboration of Wat-Ahh! With Ariana Grande. She is a Gen Zer who is living out her dreams and wants to have an influence on other young people.

Ariana Becomes A Face to a Product

Ariana was signed up as a spokesperson but also as an equity partner. She was happy to do so because she could put her heart behind the product.  She loves drinking water, enjoys a healthy lifestyle and would like to get other young people to do so too. Humanizing your brand by giving it a face is important to Gen Zers.

Thoughtful Marketing Pays

Gen Zers want to make a difference in the world and are prepared to work with brands in order to facilitate such change. They are also more open-minded and inclusive than previous generations.  This being a point that marketers need to remember as they are likely to respond to inclusive, thoughtful marketing.

Engaging with Gen Zers on social platforms is very important. If you can establish a conversation with them that’s beneficial to you and them, they will listen. If you can initiate a two-way conversation online, and address trends and issues that interest them, you will be more successful than if you continue to use more traditional marketing methods.

Amazon’s Strategy Changed the Marketplace

Amazon's Strategy and Your Brand post by William Sipper

Strategy And Your Brand

Amazon has been a game changer in the digital marketplace where it has redefined the customer experience. Traditional brands are fighting to stay relevant as they compete with new, digitally experienced companies.Your brand needs to understand Amazon’s strategy.

Prime, Amazon’s membership program, is helping to accelerate its forward momentum.  Over 40 million people in the US have a Prime membership. Customers want to know ‘Do you have what I want and how quickly can you get it to me?’ Amazon has been working hard giving a positive answer to these questions.

They want users to keep renewing their membership and buying more products. The more products they purchase, the more data Amazon can use to establish what they want to buy next.

Understand Its Use

Alexa, Amazon’s virtual assistant, has created an on-demand, personalized experience for users. They can simply give Alexa a voice command, such as for toothpaste to be reordered, and it happens.

Your brand, no matter how big or small, can’t afford to ignore the extraordinary growth of Amazon. You can learn from them to understand more about how customers are using the platform.  Work at creating a more customer-centric experience for your own customers.

You need to know more than just what they are buying.  In turn, you also need to be aware of the other ways in which they are using the platform, such as using Alexa or Prime Video. You should also be familiar with Amazon’s different selling models to find out what may work for your products.

Connecting with Customers

Amazon has accumulated large amounts of data that can be used to gauge more about customer behavior.  Amazon Marketing Services (AMS) and Amazon Retail Analytics (ARA) offer enlightening reports.

Some brands are using third-party apps and other skills to find new methods of connecting with customers. Companies like Uber and Domino’s are enhancing their existing services this way.

Technology can be game changing.  It shouldn’t be used just for the sake of using it. Should be used where it can make an improvement to the customer experience.

All brands need to think about making whatever changes are necessary to their marketing strategies in order to thrive in a world that is digitally driven.