Premium foods pick up as marketers adjust to changing demand

By Lorraine Heller

- Last updated on GMT

Related tags Percent Retailing Supermarket Packaged facts

Growth of gourmet and premium foods may have slowed from previous double-digits, but consumers are unwilling to give up some luxuries and marketers have found ways to respond to the changing demand, according to a new report.

Published by Packaged Facts, Gourmet, Specialty and Premium Foods, Beverages and Consumer Trends in the U.S., 8th Edition​ values the US market for these products at $67bn in 2009, up 4 percent on the previous year.

Although growth has dipped far below the double-digit annual pace recorded in the previous edition of this report, published in 2007, the researcher notes that consumers are more likely to seek some tradeoffs in order to stay within their means, rather than abandon the category altogether.


“Consumers who are passionate wine lovers do not switch from Chateau Lafitte Rothschild to jug wine because they are down on their luck. Instead, they start combing wine stores for the many excellent vintages that cost $10 a bottle or less,” ​said Packaged Facts.

“Accordingly, marketers, retailers and foodservice providers that are succeeding in this environment are finding ways to respond to the economic downturn—not by ignoring it or reversing strategy, but by incorporating its impact on consumer behavior as a factor among others.”

Based on primary and secondary research, as well as a survey conducted in May-June 2010 by Packaged Facts and involving 1,881 US adults, the report reveals that one in five Americans seek out gourmet products when shopping. In addition, “a surprising”​ 30 percent of consumers said they were willing to pay more for gourmet food products.

Product categories

A break-down of products within the category reveals that beverages make up the largest part of the market, accounting for 34 percent of retail dollar sales in 2009. These products include bottled water and refrigerated juices in the dairy case.

In second place are the baked goods (including cookies, crackers, breads and sweet baked goods) pasta, and grains, which represent 14 percent of sales.

Meat/produce/seafood and produce departments combined a close third at 13 percent, followed by prepared foods contributing 10 percent of gourmet and premium dollar sales.

In terms of retail outlets, mainstream supermarkets and grocery stores lead the market for these foods and beverages, accounting for over half (54 percent) of all sales last year. Gourmet and specialty stores came in second, holding an estimated 18 percent share of sales, followed by natural food supermarkets and stores and warehouse clubs, both at 8 percent. All other outlets – including mass merchandisers, drugstores, convenience stores, mail order/online and alternative channels – claim 12 percent of sales.

Product launches and forecasts

Packaged facts also included information from fellow analyst Datamonitor’s Product Launch Analytics. According to this database, there were 3,454 new products launched on the market in 2007, which were positioned as ‘gourmet’ or ‘upscale’.

Product launches “declined precipitously”​ in 2009 to 2,211, reflecting the downturn in the economy. During the first half of 2010, there were 942 new product launches, prompting Packaged Facts to project that more than 1,800 product launches will be reported by the end of 2010 if introductions continue at the same pace.

Overall, the researcher estimates that the market will reach $87bn within the next five years with a compound annual growth rate of 5 percent.

“During the 2010-2014 period, the positive upscaling factors that are being dragged down by the still weak economy will gradually regain the upper hand, causing annual growth to rise from 4 percent in 2010 to 7 percent by the end of the forecast period.”

Related topics Suppliers

Related news

Show more

Follow us


View more