The specialty food industry and the realities of the pandemic were inextricably tied over the past year, with COVID-19 and its related stay-at-home mandates influencing shopping decisions, category fluctuations, and channel sales, according to the newly released State of the Specialty Food Industry, 2021-2022 Edition. The annual research published by the Specialty Food Association, shows that total specialty food sales hit $170.4 billion in 2020.
All food brick-and-mortar retail sales, both specialty and non, grew much faster between 2018 and 2020, spurred by COVID surge buying and at-home meal preparation and consumption. Specialty food brick-and-mortar sales, specifically, hit $83.4 billion, jumping 24 percent at retail from 2018-2020, and 19.4 percent in 2020 alone. All food grew 17 percent at retail during the timeframe compared to 3 percent from 2017-2019.
Specialty categories related to cooking or baking at home soared, benefitting products like baking mixes, pasta and sauces, frozen entrees, and meat, poultry, seafood (frozen, refrigerated).
Online shopping also boomed, up 170 percent between 2018 and 2020 and 80 percent from 2019 to 2020. The sales growth of brick-and-mortar and ecommerce offset foodservice’s freefall. Foodservice has been gaining momentum over the past decade, accounting for roughly 20 percent to 22 percent of the specialty market sales. Stay-at-home orders and restaurant limits and closures saw sales drop 30 percent, resulting in a market share drop to 14 percent.
While the growth is unprecedented it is not sustainable long-term, according to the report’s market forecast. Brick-and-mortar sales are on track for above-normal growth through the end of 2021 but will then return to pre-pandemic levels of 4.4 percent compounded annual growth rate between 2022 and 2025.
The annual State of the Industry research is based on sales data tracked across 63 categories by SPINS/IRI, plus estimates for ecommerce and foodservice sales. It includes analysis of market size and sales; retail dollar and unit sales growth; specialty food category penetration; and 10-year tracking and forecasting in key categories. The full report is available for purchase in the SFA online Learning Center. SFA members receive a discount.