Many of the food retailers exhibiting this week at the Fancy Food Show (http://www.specialtyfood.com/do/Home) are promoting unique, often relatively costly, foods, such as speciality sauces, dressings and boxed goods. These lovely products usually cost 2x or more the boring counterpart at Safeway, and generally can't be qualified as required nutrition, falling into the nice to have category.
How will such foods do in the marketplace in 2009? With limited consumer spending, who can justify an $8 bottle of salad dressing? While I can't swear the food industry won't take a hit, I think spending will still be good. Already, the personal care industry, especially the body lotions, bubble baths and cheaper makeup products, have actually been selling better than normal. The prevailing wisdom is two-fold: one, consumers need comfort during stressful times, two, while a $10 bubble bath isn't cheap or necessary, it's cheaper than a $1000 vacation to Hawaii. Consumers, unless truly out of cash, look for escape and small rewards. While an $8 bottle of dressing is also not cheap, $8 is less than the cost of most nice restaurant salads, and feeds several people.
It's quite possible the luxury foods industry will do just fine in 2009, provided the products promoted are worthwhile. I'll let you know more about the trends I see at the Specialty Food Show this week.
Comments
Mark says:
I think these foods will do just fine in oh-nine, however I do think the dyanmics will change. Consumers will focus more on value, but won't sacrifice quality if they don't have to. The dynamic shift, unfortunately for niche, specialty and independent retailers, will likely mean increased food sales where you can find quality and value existing together - Target, Costco, etcetera.
Enjoy the show!
January 19, 2009 at 6:46 AM | Permalink
Amanda says:
I agree with Mark. We are literally in a new food era, one in which the definition of quality is finally making its way to the consumer's palate. I crossmap this to the rise in consciousness around food and ingredient provenance which has come more to the forefront with the growth of farmer's markets, Whole Foods, Coop membership etc etc. Additionally we're seeing mainstream grocery stores carrying more higher quality foods and gourmet items like never before. Consumers can now dabble in bulk dispensed items which previously never had shelf space, or if they did, they were drowned by the facings of other larger well-known national brands.
February 12, 2009 at 7:28 AM | Permalink
Lynn says:
I agree with Rose that luxury indulgence foods will hold their niche.
Consumers do need comfort in hard times and 'staying in is the new going out'.
I personally wouldnt pay $8 for bottled salad dressing ! The best salad dressing is so simple & cheap to make -it surpasses the quality of anything you can buy ready made. The processing used to achieve commercial shelflife kils the subtle fresh flavours.
In the UK we do have a massive growth in the 'value' or 'basic' offerings of main stream UK food retailers.
In addition the rise in popularity of the European discount Food Retailers Lidl & Aldi is nothing short of astounding especially over the last six months. They are less greedy than the main UK retailers and I understand they operate on lower profit margins informed by their ' pile it high, sell it cheap' philosophy. Lidl & Aldi are excellant value for commodity items like eggs, flour, butter, fruit juice etc., Their top-end products are excellant - especially the German Hams & chocolate....
Lynn
February 25, 2009 at 11:30 AM | Permalink
suanne says:
Some luxury items will survive, but many won't. The category is shrinking, and there will be less people splurging on treats than before. At the research chef's conference earlier this month, there were plenty of people who were recently laid off from the food industry. My fav story is the one about the chef from Le Bernardin, NY who started a $2 Korean BBQ (Kogi) taco truck in LA, which they promote using twitter. They have 7,000 followers. It is time to bring luxury to the masses in the form of cheap alternatives to fast food.
March 26, 2009 at 5:54 AM | Permalink