Washington, D.C.—Providing the big picture and some compelling statistics for the specialty food space is a new report published by the Specialty Food Association. Sales are up and growing almost across the board, and specialty foods are grabbing market share from conventional foods, according to the report.

The report defines specialty foods as “foods, beverages and confections meant for human use that are of highest grade, style or quality in their respective categories,” said David Lockwood, director of consulting for Mintel International on a conference call. The data is pulled from several sources, including the research firms Neilsen, SPINS, IRI and Mintel, with each reporting sales from different sectors of the food retail industry. Mintel also gathered the thoughts and opinions of 267 specialty food manufacturers, retailers, brokers, importers and distributors.

The report, the 11^th annual State of the Specialty Food Industry put out by the group, constitutes what Lockwood calls an annual health report for the industry. “At $80 billion, the specialty food market is a little more than 20% of all supermarket sales. And yet, as large as it is, the market has grown at a fast pace before, during and after the recession,” said Lockwood.

To illustrate the degree to which specialty food growth is outpacing overall grocery sales growth, he noted that sales growth of specialty foods in the conventional channel triples the growth of other products. Primary factors for this growth, according to the report, include the relative wealth of Americans and their willingness to spend more on food in recent decades, combined with the Millennial generation arriving as engaged customers in the specialty food channel.

Ron Tanner, vice president of philanthropy, government and industry relations for the Specialty Food Association, said the report shows dollar volume was up 8% for specialty foods in 2013, much higher than the inflation rate. Since 2011, sales are up 18.4% in specialty foods, compared with just 5.2% for all foods. He explained that the slight dip in growth rate for specialty over the past two years can be accounted for positively. “That’s really due to the higher sales. Specialty foods are becoming a fairly substantial part of the industry, so the growth rate should naturally be slowing down a little bit,” Tanner said.

The biggest category last year was cheese and cheese alternatives (nearly $4 billion), and the fastest growing was nut and seed butters (up 51.6% since 2011). Frozen desserts saw gains of 28.2% since 2011, and also notably, eggs grew 35.9% in the specialty foods space. “I think that is a reaction to some of the food safety outbreaks that have happened with mass produced eggs, so people are looking for organic eggs, they’re looking for local eggs,” said Tanner. Out of 51 categories examined in the report, 50 grew in sales. The slowest growing large categories were condiments, dressings and marinades, and bread and baked goods.

According to Denise Purcell, senior director of content for the Specialty Food Association, average annual sales for manufacturers were $1.9 million in 2013. Average annual sales increased among each of the stakeholder groups in the industry, except for brokers, who dipped from $3 million on average in 2012 to $2.5 million in 2013. 85% of manufacturers said sales were up in 2013, and only 8% reported a decrease. The most influential product claims in specialty food last year, the report found, were “all-natural” and “non-GMO,” the latter of which was a new entry to the survey. Over 40% of manufacturers said they are making non-GMO products.

Published in WholeFoods Magazine, May 2014