New York City, NY— The Specialty Food Association (SFA) held its annual Summer Fancy Food Show on June 25 – 27 at the Javits Center. Exhibiting companies numbered greater than 2,600 and approximately 25,000 people attended the show. These include specialty retailers such as Whole Foods Market, Kroger and Trader Joe’s as well as distributors like UNFI and KeHE.

According to SFA, total U.S. sales of specialty foods increased 15% from 2014 to $127 billion in 2016, and 78% of these sales were from the retail sector. As has been the case in previous years, specialty food and natural product categories are seeing even greater overlap as consumer demand for organic, non-GMO, plant-based and gluten-free options grows stronger. One of the underlying factors that unites many of these products is an emphasis on convenience. For example, one of the largest categories in the specialty food space is chips, pretzels and snacks, according to SFA. Among the fastest growing categories in the space are refrigerated lunch and dinner entrees and wellness bars.

As noted in our coverage of Natural Products Expo West, healthy snacking has seen enormous growth in popularity because snacks, which were once simply indulgences, are being elevated to a meal as busy people incorporate snacks periodically throughout their day to sustain themselves until they can have a proper meal. Filling and nutritious snacks such as bars and beef jerky have and continue to lead this trend, with protein content being an important factor. At Fancy Food, protein continued to be important, with whey protein making its way into applications such as chips and popcorn, though plant-based sources of protein such as pea and rice protein and garbanzo beans have really overtaken whey in popularity when it comes to food applications. This is because more people are seeking dairy and meat-free protein alternatives from food rather than powders and supplements.

What the specialty food industry has done is take these trends that have been growing and evolving in the natural products industry and infused them with a gourmet flare, providing consumers with unique and sometimes challenging flavors. The specialty food industry is also elevating refrigerated and easy-to-prepare meals, so that once our busy consumers get home, they can make a delicious meal that isn’t a hassle to prepare. Ethnic foods such as Indian, Chinese and Thai cuisines make up a large part of this category because of their comfort food feel and strong flavors. These types of cuisines are also strongly suited for plant-based applications.

Beverage categories have also experienced substantial growth. For example, according to SFA’s State of the Industry report, ready-to-drink (RTD) coffee and tea sales grew 114%. Cold brew coffee and iced teas in particular have been major sellers. Matcha also appears to be growing with both RTD products as well as on-the-go packets that can be poured into water bottles at one’s own convenience. Besides coffee and tea, it appears that vinegar-based and sparkling beverage trends are experiencing some crossing over. While vinegary beverages such as kombucha, shrub and switchel have been popular, several manufacturers at Fancy Food debuted lighter, carbonated varieties of their vinegar-based drinks to capture a cross-section of consumers partial to flavored sparkling water or natural soft drinks such as ginger beers/soda.

Even water is getting a facelift. Specialty waters that are enhanced in some way, such as water infused with hydrogen, oxygenated and alkaline water, have grown significantly in the past few years. SFA reports that the category has grown 75% between 2014 and 2016 due to the substantial interest in functional beverages overall.

Meanwhile, One LevelUPSFA introduced a new educational series this year, LevelUP. Literally a level up from the massive show floor, it looked at the future of food, shopping and consumer tastes. It was possible to try out an ultra-personalized experience where answering specific questions about personal values (price vs. fair trade) and tastes (low spice vs. spicy hot) produced a custom shopping list.

Perhaps the most fantastic product on display was a device that would measure the current state of your gut from the inside to determine which products to purchase. Invasive or convenient? Future foods were also ready to taste, including a kelp jerky that seemed to be a crowd pleaser.

A panel of senior-level grocery buyers led by supermarket guru Phil Lempert addressed what the retail experience of the future will look like. Trip Straub, president and ceo of family-owned Straub’s Market in St. Louis, MO, said it’s all about knowing your customers and having the right staff. He said he’s not changing anything right away at any of the company’s five Midwestern stores, but will keep eyes wide open to see what happens in the wake of the Amazon purchase of Whole Foods Market.

“Where we can really win,” Straub added, “is finding those items my customers don’t know they want yet. We need to do a phenomenal job training our staff. We’re all human. We like that human interaction.”

Added Scott Zoeller, VP of deli prepared foods, cheese, meat and seafood for Kings Supermarkets and Balducci’s Market, “People want to know where their food comes from. People want that experience where they can come in and understand and create something for themselves right there.”

Stay focused on the customer and sell solutions, said Tony Stallone, VP of merchandising at Peapod, which has been doing ecommerce for 27 years. “People aren’t buying products anymore,” he says. “They buy solutions. They buy experiences. Group your products in a way that creates solutions.”

As for what gets attention, Cathy Strange, global executive coordinator of specialty and product development and innovation at Whole Foods Market, said it all starts with taste. “It has to taste great,” she said.

Published in WholeFoods Magazine August 2017