Strategies for Specialty Food Distribution
Below are examples of strategies for distributing specialty foods, case studies of specialty food brands that have successfully worked with distributors, and current and emerging trends in the specialty food industry. Each section provides an in-depth analysis of the specialty food market, which is poised to grow faster than the overall food retail market.
1.) STRATEGIES FOR DISTRIBUTING SPECIALTY FOODS
- In the recent past, consumer interest in ugly produce has been increasingly pushing food merchants to feature non-traditional products into their product lines.
- Fast-casual restaurant — Sweetgreen recently sold a salad it made from food that could have been wasted; however, the venture was short-lived. Other vendors like Walmart and Loblaw are already selling cosmetically-challenged produce.
- On the other end, food distributors provide the market with new product offerings to match the growing consumer demand.
- In the recent past, Robison Fresh partnered with Red Hat Growers, to bring the "Misfits’ imperfect produce brand to over 300 stores in the U.S.
- Festivals and expos offer specialty foods an opportunity to distribute and present their products to a wider audience, including consumers who can get a chance to interact with or sample the products.
- Since events happen all year round, they bring together many industry players and consumers, and through networking, a business can meet possible distributors or resellers.
- Food expos and events often attract tens of thousands of visitors; therefore, they present a great way for businesses to expose products to a big and diverse audience for their products.
- For example, the Pismo Beach Clam Festival in California attracts about 15,000 attendees annually.
- Social media keeps on evolving and is no longer a platform for just connecting and engaging with customers. Also, it offers businesses options to market products to the public.
- In this regard, specialty food businesses can rely on social media platforms to showcase and sell products to the public. Moreover, these platforms showcase products to a broader audience.
- Examples of platforms like Facebook and Instagram allow businesses to create shops within their pages or profiles. When the business posts a product or a promotion, it can conveniently tag the post on the page or profile.
- Once a business tags its products, it allows users to click on the tags, redirecting to a page where they can purchase the product.
- Starting local distribution allows businesses to establish and build their brands, generate name recall, and develop loyalty among the local customers who you share something in common — the locality.
- Starting local also means a business must create a comprehensive list of potential stores that can expose and sell its products, such as local groceries, food stores, supermarkets, convenience stores, etc.
- Further, a business can opt for cost-effective local promotional campaigns to encourage residents to try its products.
- Importantly, a business starting local must have a robust food delivery plan that is convenient for customers, fast, and reliable.
Introduce Unique Products
Attend Festivals and Expos to Increase Exposure
Utilize Social Media Platforms
Start Distributing Locally
2.) CASE STUDIES: SPECIALTY BRANDS THAT HAVE WORKED WITH DISTRIBUTORS
Extensive searches for specialty food brands that have successfully worked with distributors turned positive; however, some case studies explored did not reveal the brands they were helping. On that note, some case studies provided below describe the types of companies seeking distribution assistance but do not provide their actual names.
- A renowned and one of the largest branded shelf-stable canned seafood producer in the U.S. contracted Western Overseas Corporation for a range of distribution services, including "customs brokerage, air freight forwarding, land freight forwarding, ocean freight forwarding, and advanced programming.
- The canned seafood manufacturer was looking for a range of services and solutions, including temperature-controlled transportation services, time-sensitive supply chain accountability, and purchase order management system integration.
- The client benefited from Overseas Corporation's multi-temperature controlled containers that can safely and reliably ship perishable foods and beverages globally.
- Likewise, the U.S. canned seafood manufacturer also benefited from timely product deliveries as delays could affect the product's freshness and impact the final client's bottom line and inventory.
- Importantly, Western Overseas Corporation's advanced tracking system technology integrated with the client's company’s purchase order management system to enable the staff TO track the shipment and create documentation to provide visibility into the supply chain and real-time status reporting.
- Australia-based Wintergarden Deli is a busy food court located right in the heart of Sydney. It serves over 600 customers every day with a broad range of specialty foods and beverages.
- The huge crowds that throng the joint are certain Wintergarden Deli will serve them their preferred food on time. On that note, Wintergarden Deli has contracted St. George Foodservice to provide a "complete and reliable wholesale distribution solution."
- Wintergarden Deli chose St. George Foodservice for many reasons, including reasonable pricing, impeccable services, best-in-class customer service and reliability, high quality products, and a broad range of products, including small goods, fresh, frozen, etc.
- Wintergarden Deli sources several specialty foods from St. George Foodservice, including cold cuts, meats, canned corn, beetroot, etc. Interestingly, the deliveries arrive before 4:30 am every day waiting for the food court to open.
- St. George Foodservice does not only support Wintergarden Deli's distributions challenges but also recommends to it new product releases and can outsource for it the products it lacks.
- For years, a very popular restaurant in Washington, D.C. spent its limited labor and storage space by "steaming and breaking down whole lobster into cooked meat" to make its signature lobster roll. With more consumers flocking the eatery, its owners opted for a better option to conserve storage space and reassign duties to more important activities.
- The restaurant then contracted War Shore Oyster Company, with a distribution protocol, which helped it enhance efficiency and boost profitability by offering the chef two-pound packaged lobster meat from Maine. The restaurant got two options of "fresh/frozen and raw/cooked claw knuckle (CK) or tail claw & knuckle (TCK) meat."
- The restaurant discovered that by relying on War Shore’s distribution protocol that consistently delivers high-quality, fresh-packaged lobster meat, it could assign labor resources to the restaurant's most important and profitable activities.
- Consequently, with the new solution, the restaurant saved refrigerated storage space and produced less waste. The solution also helped streamline the restaurant's workflow without compromising its signature dish.
A Canned Seafood Manufacturer
Wintergarden Deli, Sydney
A Popular Restaurant in Washington, D.C.
3.) CURRENT AND EMERGING TRENDS IN THE SPECIALTY FOODS MARKET
A review of market reports focusing on different specialty food market segments has uncovered numerous examples of trends to watch in 2020. Some prevalent trends in this niche include continuing sales growth, sustainability-driven product development, unique proteins — anchovies and noodles, and convenient cocktails and mocktails, etc. These insights qualify as trends based on their frequent mentions across numerous reports and have been tracked to see how they are evolving in the specialty foods market to qualify as trends.
- According to the Specialty Food Association (SFA) 2019-20 State of the Specialty Food Industry Report, the sales growth for this niche surpasses that of the overall food retail market.
- SFA reports that specialty food and beverage sales in 2018 reached $148.7 billion, up 9.8% since 2016. However, year-over-year dollar sales increases have declined to 4.3% in 2018 versus 5.4% in 2017.
- The specialty food segment witnessed a compound annual growth rate of 10.3% from 2017 to 2018, more than three times the 3.1% growth rate for all food at retail. The segment also saw a CAGR of 8.1% for unit sales.
- In 2018, specialty foods sold via retail channels totaled $113.4 billion, those sold via foodservice joints reached $32.4 billion, and those sold online were $2.85 billion.
- Broader availability, product innovation, and growing interest from consumers and retailers are examples of the core factors driving the immense growth the specialty foods market is witnessing.
- According to market analysts and experts, upcycled products, especially those using ingredients often discarded, are expected to become more prevalent in the future.
- In the recent past, several unique products have come to market, including "tea made from discarded avocado leaves, frozen pizzas made with toppings from vegetable scraps, and whey beverages made from leftover products of cheese making."
- Equally, farm products that address agricultural practices and focus on protecting the land's health are also coming to the market. An example is the specialty pepper with better root-knot nematodes resistance.
- Avocado Leaf Tea, is the company behind avocado tea and in February 2020, it won a bronze medal in the Global Tea Championship’s Loose/Small Batch/Single Serve competition.
- Increasing consumer awareness of proteins is pushing them to source for unique proteins for their diets. Some sources include common under-the-radar varieties or innovative options, such as anchovies.
- According to PR NewsWire, anchovies are forecasted to take off and gain ground as a "sustainably caught, flavor-packed option," in restaurant menus topping burgers.
- Anchovies can also serve as an ingredient in butters, cookies, marinades, etc. Experts also see the trend boding well for other small tinned fish, e.g., herrings, sardines, etc.
- On the other hand, protein-packed noodles also are on the rise; however, they are moving beyond the lentil- and legume-based varieties, currently in the market.
- Experts predict that moving forward, the market should expect more innovative noodle options made from varied sources, including seafood or nutrient-packed noodles rich in dietary fiber and minerals.
- Convenient cocktails and mocktails also are on the rise and were among the top trends in the 2019 Summer Fancy Food Show.
- The trend is characterized by a "slew of new mixers, garnishes, and tonics to help customers take the cocktail game home and make bar-quality cocktails.
- Trends experts are optimistic that cocktails and mocktails will continue trending in 2020 and beyond, characterized by a whole range of new cocktails and mocktails in bottles and cans to offer sophisticated alternatives for non-drinkers or curious consumers.
- In a related trend, PR NewsWire reports that the market should expect to see canned beverages spiked with CBD.