Specialty food sector offer growers market options
By Eric Mortenson
Growers looking for marketing options are in luck. The specialty foods sector is going nuts, or even chestnuts, which was one of the products on display Oct. 24 at Oregon State University’s Food Innovation Center in Portland.
Consumers are looking for natural, locally-produced food that has a story to go with it, preferably a family farm tale, panel members said during a seminar. Although chiefly discussing emerging beverages, panelists said specialty foods of all kinds have done well even in a weak economy. About 60 people attended the event, many of them looking to break into or make a bigger dent in the retail market.
Ron Tanner, a vice president of the New York-based Specialty Foods Association, said sales of specialty food products grew 22 percent nationally from 2010 to 2012, while all products grew 4 percent. Specialty foods – loosely defined as national brands need not apply – is an $86 billion annual industry and now accounts for 10 percent of retail food sales, Tanner said.
Shoppers at stores such as WholeFoods and New Seasons are willing to pay more for “purity,” he said.
“The less you can process it, the better,” Tanner said. “And consumers do love to hear the story for the product. Let them know about the people behind the product.”
Examples of that were on display at the seminar. On a table outside the meeting room were bags of chestnuts branded as “Oregon Colossals” and packages of stevia leaves, grown in California and Oregon. The herb is an alternative sweetner.
Other displays included packages of “Popped Wheat Berries” made by Wheat Springs Bakery in Condon, Ore. The bakery is side business of the Bates family wheat farm on the Columbia plateau.
Such snack products are among the hottest specialty foods, Tanner said. Others include bakery goods, chocolate items, convenience meals and processed fish, meat and eggs, he said. Among specialty beverages, the top selling are alcoholic drinks such as beer, wine and spirits, hot beverages, juice drinks, ready-to-drink coffees and teas, and bottled water, Tanner said.
The specialty beverage sector holds considerable growth potential, Tanner said. While 60 percent of refrigerated dips and salads are specialty foods, they make up only 3 percent of beverages sold.
Another panelist, Portland bartender and distillery owner Ryan Csanky, said he began using local fruit purees in his mixed drinks to match what was going on in the kitchen at Wildwood Restaurant, which spearheaded the local food movement. He began making his own vodka, then his own gin as an “explosion of creativity” took place.
In 2005 there were 25 craft distilleries nationally, Csanky said. Now there are 60 to 70 in Oregon alone, and about 300 nationally.
“Portland is one of the places that drive trends throughout the country,” he said. “You don’t have to buy garbage that’s filled with corn syrup, artificial flavors and preservatives.”
John Boyle, a buyer with New Seasons markets, said buyers of the store’s “grab and go” beverages base their purchases on type, flavor, packaging, recyclability and seasonality. Price is the least important factor, he said.
At New Seasons, which specializes in upscale, local and organic products, craft beers are as strong as ever, local ciders are doing well and $10 to $15 wines appeal to “younger buyers who love cool stories,” Boyle said.
The Food Innovation Center is part of OSU’s Extension Service. Its mission includes helping growers diversify by making and selling specialty foods.
Diversification can take unexpected turns. Mint growers Mike and Candy Seely of Clatskanie, along the Columbia River west of Portland, experimented a few years ago with selling small vials of oil at farmer’s markets. Then they began making mint patties, and the candy took off.
They’ve built manufacturing space on the family farm, hired a graphic artist to redesign their packaging and now sell at mainstream grocery stores.
“We’ve got 19 people working for us right now,” Mike Seely said. “Things are going really well.”