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SPECIALTY FOODS, MARKETING OFFER NEW JERSEY'S PRODUCERS ADDITIONAL OPPORTUNITIES
Contact: Jeff Beach
Specialty foods may sound like a subject that only gourmets discuss in over-excited tones at a five-star restaurant, but Ron Tanner boils the subject down pretty neatly for the average New Jerseyan.
The high-end cheeses, chocolates, sauces, condiments and other array of foods are classified as “specialty” due to their unique ingredients, ethnic or foreign flavors or health benefits.
“Cheeses?” Tanner says, noting that this is a category ripe for opportunity. “People are just tired of Velveeta and that kind of cheese. They want something special. Yogurt? People want a yogurt that actually tastes like a dairy product, not one that tastes like some kind of overly processed thing.”
Tanner, the vice president of communications and education for the National Association of Specialty Food Trades (NASFT) spoke on September 19 about specialty foods at the Rutgers EcoComplex in Burlington County. His seminar, “Trends in the Marketplace,” was attended by about 50 people and served as the kickoff to a series of five seminars aimed at helping New Jersey’s farmers and food-related businesses to improve their viability while using more New Jersey-grown products in their recipes.
The seminars, sponsored jointly by the New Jersey Departments of Agriculture and Labor & Workforce Development, and conducted by Rutgers University’s Food Innovation Center, are part of the Agricultural Development Initiative launched in 2006 by Agriculture Secretary Charles M. Kuperus.
“Our agricultural producers are keenly aware of the need to retain control of their products further into the market chain,” said Secretary Kuperus. “This puts them in a much better financial position than simply dealing in a commodity marketplace. And these specialty foods categories frequently offer the highest profits. In addition, this fits perfectly with Governor Corzine’s efforts to create a more educated, better prepared workforce.”
During the second seminar on Oct. 2, nationally known produce expert Jim Prevor spoke about the growing avenues for marketing fruits and vegetables and specialty items made from them. Prevor, whose family goes back four generations in the New York-area produce industry and who helms numerous publications about food marketing, urged growers to “avoid the commodity trap” and differentiate their products through innovative and direct marketing.
Among the strategies for obtaining the best price for their produce, Prevor said, farmers and produce marketers are having the most success with “proprietary produce,” in which a particular variety is developed that offers better taste or higher quality, “heirloom” produce such tomatoes grown with hybrid seeds passed down from generation to generation, organically grown produce (although environmentally conscious consumers are beginning to place more value on locally grown as they consider the overall carbon footprint impact) and targeted sizing of produce.
“Not many people think about it, but size offerings are important,” Prevor said. “Take honeydew melons. People in Sweden like them really small, whereas people in China want them huge. And in the U.S., it’s the medium size that sells.”
Whereas produce is sold on the larger scale, specialty foods often start out in a niche market and then grow, especially these days when larger supermarkets are seeking them out as a way to draw customers.
Specialty foods used to be the domain of health food stores and boutique food emporiums, but just about any chain supermarket has some level of such foods on their shelves these days, said the Fancy Food Association’s Tanner, noting that specialty foods accounted for $38.5 billion in sales at retail outlets in 2006 – 10 percent of all retail food sales – and another $12 billion to $15 billion in sales to restaurants during that year.
Those big numbers don’t necessarily mean the businesses producing them are huge.
“Eighty percent of the producers of specialty foods make under $1 million a year,” he said. “These are small manufacturers selling to small retailers.”
The growth of specialty- and health-food grocery stores like Whole Foods and Fresh Market has added a big-retailer option for many more specialty food producers, Tanner said. In fact, while sales of all foods increased by 4.7 percent from 2004 to 2006, sales of specialty foods rose 22.1 percent.
More than half of condiments sold in all stores now are classified as specialty foods, while the largest segment in terms of units sold is in the specialty drinks category.
Whether it is drinks that promise increased energy, those trying to distill the coffeehouse experience into a carry-along form or those promising increased immunity to any number of diseases, the public can’t seem to get enough of the genies in those bottles.
“Condiments and those kinds of products, you just don’t buy them every day,” Tanner said. “But drinks, drinks are something people need every day.”
Because specialty food buyers are willing to pay a little, and sometimes a lot, more for such foods – and in fact view the higher price positively as an indicator that there is something special about the product – “this industry is fairly recession-proof,” Tanner said.
With New Jersey’s ag sector tied more each year to its related food retail and restaurant businesses – combining for an $84 billion annual industry – the specialty food market makes a perfect fit in a farm economy that needs both a way to retain the value of its products longer and a ready-made market to sell to.
“Making the most of these opportunities is what this series of seminars is all about,” said Secretary Kuperus. “We’ve got decades of experience telling us that consumers love the taste experience of New Jersey agricultural products. Using them as ingredients in value-added items like specialty foods can only be a win-win proposition.”
For more information on the remaining seminars in the series, all of which are scheduled for the Rutgers EcoComplex, please visit www.fire.rutgers.edu/FIC%20Workshops%20PRESS.pdf.