Specialty foods remain one of the fastest-growing segments of the food business, according to a new study released by the Specialty Food Association (SFA), New York.

Fueled by increasing interest from both consumers and retailers, total sales jumped 11% between 2015 and 2017, hitting $140.3 billion last year, according to SFA’s annual State of the Specialty Food industry report. Specialty food sales outpaced the growth of all food at retail – up 12.9% vs. 1.4%. Product innovation and the wider availability of specialty foods through mass-market outlets also plays a part in the industry's success. Sales through foodservice increased 12.8% and online by 21%, as U.S. consumers make specialty food a regular part of their diets both at home and when dining out.

"The specialty food industry is a business that is constantly evolving," says Phil Kafarakis, president. "Consumers of all ages are embracing specialty foods and making purchases everywhere they happen to be – from convenience stores to big box retailers to online, as well as in traditional gourmet shops and groceries. Foodservice and retailers are relying more and more upon our products. The industry's growth has been building and will continue to maintain momentum for years to come. Our research provides a comprehensive picture of where we are today and can be used to help businesses prepare for future success."

Working with Mintel, Chicago, the report explores where the current market stands, the opportunities and challenges it faces, where it is going based on sales forecasts in key categories and how the specialty food consumer is evolving.

Key Facts and Figures:

Refrigerated ready-to-drink tea and coffee ranked in the Top 5 categories with highest dollar growth from 2015-2017 at +63.2%

Share of consumers buying specialty foods by generation (2018)

  • iGens (age 18-23) 79%
  • Millennials (age 24-41) 67%
  • Gen Xers (age 42-53) 65%
  • Baby Boomers (age 54-72) 60%

Top U.S. dollar sales of specialty food by market segment (% change 2015 to 2017)

  • Brick-and-mortar retail channels +10.7%
  • Foodservice +12.8%
  • Online +20.9%