Trade Events
United States

Product Trends Identified

at the Winter Fancy Food Show, San Francisco, 2003

One main reason companies attend trade shows is to identify trends in the marketplace. The intent of this report is to categorize the emerging trends, or themes, seen in specialty food products at the 2003 Winter Fancy Food Show. The findings in this report were drawn from trade floor observations made at the Winter Fancy Food Show and store visits undertaken in the San Francisco Bay area in January 2003. Store tours were offered by both Food Beverage Canada and show organizers. As the Winter Fancy Food Show is a specialty food event, these conclusions may or may not apply to the broader specialty food category and other markets in the United States.

Product Themes in Retail Stores

Short visits were made to about ten specialty retailers in the Bay area; all but two were independently owned. Mollie Stone's is an upscale local chain of a dozen stores, and Whole Foods Market has about 120 locations across the US. Specialty retailers (eg Bi-Rite Market, Woodlands Market) are influential on food trends in San Francisco, as they attract leading chefs and food writers, offering them the latest in new food ideas. We heard that in these more uncertain times, people are cooking more at home, cooking classes are more popular, and families are paying more attention to what they eat.

In all stores visited, there was some degree of emphasis on organic products, most notably in fruit and vegetable displays. Many, or most, produce items were organic, and, we were told, "if its available organic, we'll take it". The trend-setting Woodlands Market also labeled country of origin on every produce item, and described the health attributes of specific vegetables and fruit.

The two larger retail operations have added certification programs "that go beyond organics", in an attempt to distinguish themselves from the now mainstream organic supply base now found in most San Francisco supermarkets. Whole Foods has created an "Authentic Food Artisan" certification program for organic products "made using traditional methods... in small batch production, from the finest ingredients."

Mollie Stone's has contracted with Scientific Certification Systems' NutriClean Division to test pesticide residue levels in both organic and conventional produce, using standards that "are up to a thousand times tougher than the EPA standard". Suppliers must disclose their chemical use, and have field samples taken for lab tests, with additional spot-checking at the produce terminal. The stores advertise the slogan, "Just because it's organic...doesn't mean it's pesticide free".

Healthy, fresh, socially responsible and humane treatment of animals were themes evident in most stores. Deli and meat counters often displayed natural meats with no preservatives and a range of branded products (eg Country Natural Beef from Oregon, sustainably-farmed Petaluma Poultry). Meat departments were featuring "wild salmon", "line-caught tuna", "natural range-fed veal", and corn-fed Angus with no antibiotics, no steroids, and no animal by-products in feed. Mollie Stone's flyers claim "we hire our own fishermen", while Whole Foods has brochures warning consumers about methylmercury in seafood.

Themes in New Product Showcases

On the first day of the Trade Show, the "Award" and "What's New" product showcases were scanned for evidence of new themes or emerging trends. New at the show this year was the Natural Foods Showcase, which by its existence alone indicates the growing importance of natural foods in the US market. This high demand category is defined as having no artificial or synthetic ingredients, and is driven by "an aging population, an interest in self-care and a better understanding of the correlation between diet and health".

Also new this year was a small Kosher Showcase. Kosher food sales are growing by 15% annually, totaling $5.75 billion in sales in 2001, because of "their high quality and healthful status". Other showcases included Foodservice and Gifts. While showcases were useful in providing an overview of potential themes, manufacturers paid to be included in the displays, thus they could not be considered truly representative of new product introductions. Many companies do not use the showcases.

Reference Categories

Based on observations from the store tours and showcases, a list of perceived themes was developed:

• Social responsibility/Fair Trade - affiliation with charities, fair prices to farmers
• Certified Organic - USDA accredited
• Natural - no artificial ingredients, no preservatives
• Beneficial for Health (eg. sugar or lactose-free) - attributes that improve health
• Kosher certified
• Folksy/Stories about producers - establish personal connection with consumers
• Traditional/Old-fashioned - implied quality and care, wholesome goodness
• Family Values/kids - playing and cooking with kids, extended families
• Artisan - regional specialties, made with time-honoured, batch-type methods.
• Ethnic - Hispanic, Italian, Indian, etc.

Information from the Show Floor

A statistically representative sampling method was developed to gather data from manufacturers' booths on the trade show floor, to determine the popularity of these themes in marketing plans. Data was collected from 158 booths, representing approximately 20% of exhibitors at the show.

Fifty-six percent of the manufacturers sampled (ie 89 out of 158 booths) used at least one of the identified themes on our list, and of those, almost a third used a combination of two or more themes (eg organic and fair trade). Sixty five firms demonstrated no observable trends. Data indicate that the preliminary work on theme identification effectively captured the key marketing strategies, or themes, employed in the US specialty foods market.

Theme No. of Companies with Theme

Folksy/Stories : 24
Certified Organic : 16
Social responsibility/Fair Trade : 5
Natural : 20
Beneficial for Health : 16
Kosher : 6
Traditional/Old-fashioned : 13
Family Values/kids : 10
Artisan : 2

A food consultant from San Francisco commented that Artisan products and knowing the farmer/producer are important new trends, with farmers markets expanding in the Bay area. This is reflected in the popularity of stories about food producers on product labels and "old-fashioned", the most common themes we found at the show. The term "natural" was found in many categories, especially cheese, spices, tortilla chips and salsas, cookies and meat products. Organic certification was more common with coffee, teas and snack products, although it was found in most categories. The social responsibility theme was associated primarily with coffee and chocolate products, which are produced in developing countries.

An educational session on specialty food retailing described tea/coffee and beverages, condiments and desserts as the mainstay of the US specialty market, with interest in fancy pastas on the wane. Tropical fruit flavours and chipotle (smoked chile) were incorporated into many products, including BBQ and hot sauces, meat products, and condiments.

Market Leaders

Marketing guru Phil Lempert described tomato sauces for pasta, organics, spice rubs and Kosher as hot areas. Tree of Life, the largest natural products distributor in the US, profiled the following categories as "hot": Ethnic (Thai, Hispanic, Indian), Organic (in all categories), Kosher, natural snacks and cereals, soy and meat alternatives, sports nutrition bars and beverages, cake decorations, and non-dairy.

The companies Numi Tea and the Republic of Tea demonstrated that fine tea sales have been strong in recent years, and that organic is an important area to move into. Chino Valley Ranches commented that their expansion of 60% in organic egg production still couldn't meet consumers' demand.

The San Francisco Chronicle, in a review of the Show, highlighted the designated Kosher area at the show, commenting that the number of certified Kosher foods has increased dramatically in recent years. They also noted that "heightened consumer concern for food safety will be emphasized even more", likely contributing to the demand for certified organic and kosher products.

Summary

With a little advance planning, pre-show tours and new product showcases can be used as sources of information about emerging trends or themes at food shows. The prevalence of new themes can be measured with an organized sampling process at the trade show, offering a easy tool to measure market place interests.

San Francisco is food-oriented city, with a large number of restaurants and retailers offering in novel cuisine and unique food trends. Organic products are securely established in the Bay area, and consumers are open to trying ethnic and fusion foods.

Contact for more information:

Brenda McIntyre, M. Sc.
Senior Marketing and Trade Officer
International Team
Agriculture and Agri-Food Canada
Telephone : 780-495-4143
Fax : 780-495-3324
720, 9700 Jasper Ave
Edmonton, AB
T5J 4G5
mcintyreb@agr.gc.ca