Specialty Food and Beverage Sales Expected to Reach $207 Billion in 2023

Sales of specialty foods and beverages across all retail and food service channels neared $194 billion in 2022, up 9.3 percent over 2021, and are expected to reach $207 billion by year’s end, according to the Specialty Food Association’s (SFA) annual State of the Specialty Food Industry Report.

The specialty market comprises 63 food and beverage categories, accounting for nearly 22 percent of retail food and beverage sales.

According to the report, chips, pretzels, and snacks were the top-selling specialty food category at retail in 2022, moving up from third place in 2021 and becoming the first specialty category ever to exceed $6 billion in annual sales.

The top 10 specialty food and beverage categories for 2022 in retail sales were:

1. Chips, pretzels, snacks.
2. Meat, poultry, and seafood (frozen, refrigerated).
3. Cheese and plant-based cheese.
4. Bread and baked goods.
5. Coffee and hot cocoa, non-RTD.
6. Entrees (refrigerated).
7. Chocolate and other confectionery.
8. Water.
9. Desserts (frozen).
10. Entrees, lunch, dinner (frozen).

Related Article: Which Supermarkets are Best Positioned to Dominate in the Future?

“The resilient specialty food industry continues to thrive despite weathering challenges since 2020,” said Denise Purcell, SFA’s Vice President, Resource Development. “While food inflation has impacted the market in the past couple of years, that is stabilizing, and the industry is poised for the future with several positives in place. Consumers have more retail channels to purchase specialty foods, food service is rebounding, and makers are innovating with sourcing, ingredients, and promotion.”

Two top-selling categories in 2022 – Entrées (refrigerated) and Chocolate and other confectionery – also were among the Top 10 Fastest-Growing Specialty Food and Beverage Categories in 2022:

1. Energy and sports drinks.
2. Tea and coffee, RTD (refrigerated).
3. Entrées (refrigerated).
4. Breakfast foods (frozen).
5. Cream and creamers (refrigerated, shelf-stable).
6. Chocolate and other confectionery.
7. Baby and toddler food.
8. Cookies and snack bars.
9. Soda.
10. Appetizers and snacks (frozen).

Throughout the 67th Summer Fancy Food Show, which takes place June 25-27 at the Javits Center in New York City, thousands of products from the top-selling and fastest-growing categories will be displayed. The trade show is recognized as the largest B2B specialty food and beverage event in North America.

Additional highlights from the State of the Specialty Food Industry report will be shared on Monday, June 26th at 10:30 am (Big Idea Stage, Level 3, SFA Hub) during a Summer Fancy Food Show session with the report’s lead researcher.

The Size of the Specialty Food Market at Retail

  • In 2022, specialty retail (brick and mortar) rose to a record high of $96.5 billion. Growth over the last two years has primarily been driven by conventional retail.
  • Natural & Specialty retailers lost market share as units fell more sharply than in the Conventional channel.
  • The Natural & Specialty channel includes grocery stores, co-ops, independents, and large regional chains. Often these retailers derive 40% or more of their total sales from specialty products.
  • Natural & Specialty retailers have struggled to grow sales since 2020 and saw a decline in 2022 despite price inflation.
  • These stores generated $12.9 billion, accounting for 13% of sales in 2022.
  • Conventional had a strong 2022 on the back of a strong 2021 but still felt inflation’s impact. This channel includes conventional grocery, drug, mass merchandisers, club, dollar, and military outlets.
  • With $83.6 billion in specialty sales in 2022, and 15% growth during 2020-2022, the sprawling channel accounted for 87% of all specialty retail sales.
  • Conventional retailers are garnering more share of the total retail market each year.

The annual State of the Specialty Food Industry research examines the market size and sales, dollar and unit sales growth, and specialty food category penetration.