Food for Food Lovers
With confidence in private label products gaining ground each year, a store brand line that focuses on the specialty and gourmet space could be a great way for retailers to draw more consumers into the store and increase sales. Not only do 84 percent of specialty food buyers feel comfortable with spending more money on products they believe are higher in quality, but their rate of purchase of these gourmet products also has increased to one out of four dollars, states New York-based Specialty Food Association (SFA) in its “Today’s Specialty Food Consumer 2014” report, produced in conjunction with global market research firm Mintel.
Know the specialty demographic
Before designing whole lines of specialty and gourmet products, retailers first might want to learn who typically consume these items. Knowing the demographics could help them make better-informed decisions when it comes to product formulation and packaging.
The typical specialty and gourmet consumer ranges in age from 18 to 44, with those in the 18-to-24 and 35-to-44 age range most likely to purchase gourmet food in a wide range of categories. Additionally, specialty food consumers are most likely to be affluent, with annual household incomes of $75,000 or more, SFA states. However, 70 percent of the U.S. population has a household income of less than $75,000 per year, leading to an interesting opportunity for retailers and their private label programs.
“To grow the industry, specialty food retailers and manufacturers may want to adapt pricing strategies or develop private label offerings to engage a larger audience of less-affluent consumers,” SFA says.
But retailers should keep in mind that just because a consumer is less affluent does not mean he or she is less diligent about reading labels. Gourmet customers read labels and are very discerning in terms of quality, states Beau Bernstein, director sales and marketing, Haelssen & Lyon North America Corp., New York. These consumers will walk away if the product line is not well executed. So retailers need to take a measured, strategic approach and invest the time and money required to create a quality product.
Understand the why behind the buy
Overwhelmingly, taste remains the No. 1 reason specialty and gourmet consumers purchase or try a new product, SFA says. Healthful attributes also play a large role in purchasing behavior. In an online survey conducted in June 2014 by global market researcher Mintel, in partnership with SFA, 42 percent of respondents said they purchase specialty and gourmet products as a way to eat more natural and healthful foods — specifically to avoid artificial ingredients and preservatives. Nineteen percent of consumers said they purchase gourmet products as way of eating more foods that are organic, non-GMO or better for the environment.
“There seems to be a bigger push from consumers for ‘clean’ and ‘natural’ ingredients,” agrees Sandra Zanette, director of marketing and business development, Sabine’s Collections Ltd., Woodbridge, Ontario. “We believe retailers could benefit from this [trend].”
Product claims are also important to these consumers, specifically “all natural,” “organic,” “locally sourced,” “fair trade” and “non-GMO,” SFA says. Clearly calling out these claims and offering some ways to educate shoppers, specifically occasional specialty food shoppers who tend to lack food knowledge and awareness, will be of benefit to retailers. However, retailers might want to be careful how many product claims appear on store brand specialty food packaging.
“I believe consumers are getting two types of fatigue: ‘seal fatigue,’ where packages begin to look like NASCAR with all the certifications and seals, and ‘attribute fatigue,’ where every possible attribute is called out on an item,” says Brad van Dam, president and CEO, Marich Confectionery, Hollister, Calif. “In the end, decide on the two or three attributes that are truly differentiating, and tastefully call them out to indicate why the product is special.”
Additionally, cause-based marketing could lead to a sales lift in the specialty and gourmet category. Fifty-two percent of specialty food consumers like to purchase foods that support a cause, SFA states. Rainforest preservation, international hunger relief and farm/agricultural charity contributions were popular in 2014.
Make it pretty
When it comes to packaging, specialty and gourmet food shoppers expect more. Retailers should be willing to invest in high-end brand designers with the goal of building a gourmet brand within the store brand, van Dam says. When a store brand can offer a consumer a creative, quality product that uses a well-thought-out and well-executed design, the consumer will be happy to buy the product.
Additionally, messaging on the package should point out that the product is handcrafted and made in small batches with the highest-quality ingredients, if applicable, says Louise Kramer, public relations director, SFA.
And, specialty and gourmet shoppers read labels and want “romance copy,” says Jim Gordon, president, Robert Rothschild Farm, Urbana, Ohio. They want to know all about the product.
Bernstein agrees.
Revealing the story behind the product is critical, he says. The packaging should answer questions such as “What makes this product special?” “Where does it come from?” and “What is its history?” For example, a specialty tea might place a map on the package showing the region from which the tea leaves were sourced, tell a story about the tea cultivar and the harvest season, and explain how the tea was sourced.
Plus, using thicker paper stock, thicker film, spot varnishing to make key elements pop, soft-touch matte varnishes and dual varnishes will send the message to the consumer that the product is not an everyday item but one that is special and worth his attention, van Dam says.
Additionally, many specialty and gourmet consumers want to have product packaging with the smallest carbon footprint, says Larry Montuori, vice president of sales, Nuovo Pasta Productions Ltd., Stratford, Conn. As long as the product is protected, it’ll be to a retailer’s benefit to use minimal packaging.
Retailers could also consider new and innovative ways to package specialty products. For example, oil sprays are becoming increasingly popular among consumers, states Matthieu Kohlmeyer, founder and CEO for Berkeley, Calif.-based La Tourangelle Inc. However, consumers of organic oils are likely not interested in a spray that uses a propellant. Offering a bag-in-valve option instead is a great way to diversify the store brand portfolio while offering something innovative that matches the consumer’s desires.
Simply delicious
According to the SFA, chocolate, olive and specialty oils, cheese, coffee and salty snacks are the top five specialty food categories purchased most often by consumers. In 2014, tea made the top-10 list. The year prior, tea was 15th on the list. As for categories that are fastest growing, nut butters, eggs and frozen desserts top the list. For retailers just beginning to offer store brand products in the specialty and gourmet space, these categories could be the right place to begin.
Other product trends have taken off in the past year as well. Smoky foods, snack bars packed with protein, jerky — whether made from salmon or another distinctive protein — and foods infused with bourbon, from cooking sauces to confectionary, are popular as well, Kramer states.
Plus, cultural tastes continue to play a significant role in product creation. Indian cuisine is a current favorite, with expansion across all segments of fresh food, ingredients and flavor profiles, van Dam says. And consumers are more open to exploring unique flavor combinations such as dark chocolate chipotle almonds and coconut curry cashews.
Prove it’s better
Specialty and gourmet products inherently come with a higher price tag, and for regular consumers of these items, that extra money won’t be an issue. But for occasional purchasers, those extra dollars and cents could be a real barrier to entry. So in-store marketing and merchandising could be a powerful way to engage consumers and convince them to try the product.
For example, in-store sampling is always a great way to initiate a conversation with consumers, especially when the product is different or commands a price premium, Kramer says.
Bernstein agrees.
“Use the consumer’s senses of sight and smell to your advantage,” he says. “Nothing beats a coffee section where there are sacks of coffee beans open and exposed so that shoppers are met with a store section imbued with delicious aromas and the view of an abundant display of beans.”
And there is no reason to ignore taste, touch or sound. Set up an olive oil display where pieces of bread and dipping dishes are available for tasting at a certain hour each day, Bernstein recommends. And make sure there is a knowledgeable staff member on hand to administer the tasting, someone who can address the flavor story. Include a map of the region and an image of the tree where the olives come from.
In fact, retailers could even send home store brand products with employees so that they can speak from experience to their customers, Montuori says.
And retailers might want to keep in mind that specialty food shoppers often frequent specialty stores because they are looking for a food experience, with a curated selection of new and unusual or best-in-class products. They expect more customer service than in a typical mainstream supermarket and are open to advice and suggestions. Recreating that experience at the supermarket could challenge consumers’ notions about specialty and gourmet product purchases, Kramer adds.