How Gifting Is Helping the Surging Specialty Foods Industry Innovate and Set Trends

The early days of the coronavirus pandemic had many folks hunkering down indoors, turning on Tiger King, and snarfing fistfuls from a sack of potato chips. But as time stretched on, who wasn’t looking to ramp up their snackage? Many of us started seeking out more premium treats as pick-me-ups because, as it turns out, life is too short to settle for subpar sustenance.

A practically universal desire to put joy on a small plate and indulge not only helped lift our spirits, but it also surged the specialty foods industry. The category of goodies nearly quadrupled its typical growth rate in 2020, putting up a 21.7% year-over-year increase for the specialty market.

Hors d'oeuvres, relish trays, canapés — whether you were aware or not, these bite-sized delights have been highlighting specialty foods for decades. But with the onset of the pandemic, charcuterie boards (the next gen of premium snack assembly) soared. People sought “high-quality, flavorful, convenient meal solutions suitable for snacking, sandwiches, and easy at-home entertaining,” spurring serious growth and innovation.

Meat, fish, fruits and vegetables, baked goods, candy, beverages, and gourmet foods are just some of the most familiar groups starting to branch out with new flavors, ingredients, and formats, but the innovation isn’t restricted to what is being sold. This category is also pushing the envelope for how it’s being sold and why.

Historically found in grocery stores and deli counters, specialty foods have expanded sales to cover every outlet from small mom-and-pop boutiques to online stores with consumers buying more and more not just for themselves or big parties, but also for others as the perfect gift.

Gourmet food and drinks have become go-to gifts for practically any occasion, but what makes specialty foods and gifting a pair as primo as a glass of rioja with a hunk of Comté? Why do thoughtful gifters flock to these premium treats? And which specialty food brands are already leading the trend? Let’s dig in.

Unwrapping Specialty Foods: A Glimpse at the Industry We’re Gorging Ourselves On

The specialty foods industry is a varied and changing market, especially when compared with other grocery store shelf-stockers. At first thought, you might hear the title “specialty foods” and imagine it’s a category restricted to what fits on your favorite charcuterie board. And while you’re not wrong, this is a category comprised of 63 separate food and beverage categories all snugged up under the same umbrella.

Meat, cheese, bread, chocolate, and desserts are just a few of the usual suspects, with “chips, pretzels, and snacks” ranking supreme as the leading specialty food category in 2022. That segment on its own is responsible for more than $6 billion in annual sales — the first category to ever breach that big 6B mark.

Specialty food sales nearly crested $194 billion in 2022 and surpassed $200 billion in 2023 — putting up a gobsmacking growth stat of nearly 150% since 2013. The industry has been touted as “inflation- and pandemic-proof,” and despite a slight dip in 2023 because of those ongoing economic thorns, the category as a whole is still expected to grab 23% of total grocery store sales through 2027.

‍The TL;DR? The specialty foods industry is an increasingly popular and dynamic sector with no slowdown in sight.

Specialty food manufacturers often focus on one type of food, be it gourmet chips, cured meats, or soft cheeses. Because of this immense diversity of food type and category in the industry, there aren’t any major companies dominating the market. This fact makes the industry especially unique in that any player is a true contender in the space. Without needing the deep pockets or resources of a mega grub conglomerate, even small operations can start crafting gourmet ice cream, chocolate truffles, or other delicacies and find a fit with consumers.

What’s more is that sellers no longer have to rely on finding shelf space with a brick-and-mortar retailer to reach people. Ecommerce has grown substantially since 2020, in both users and market size, and services like grocery delivery and online grocery ordering have proven sticky even as people return to their pre-pandemic in-person shopping habits. By 2028, delivery, pick-up, and ship-to-home grocery sales are expected to grow three times faster than in-store sales and gobble up nearly 13% of the total grocery sales in the US.

The explosion of ecommerce since 2020 as well as these shifting consumer habits and desires have created a perfect storm for specialty food retailers in 2024.

With shoppers embracing ecommerce and weaving it neatly into their everyday lives, specialty food brands have more opportunities than ever before to get in front of a hungry audience and further innovate the space with seamless online ordering technology. While specialty food brands continue to grow their direct-to-consumer ecommerce channel, they also set themselves up to collide with another booming industry: gifting.

Specialty Food and Gifting: Two Growing Markets Made for Each Other

Gifting is another industry that was steadily increasing until the onset of the pandemic turbocharged its growth. The corporate gifting market alone is expected to come within inches of $243 billion by the end of 2024. With newfound distance between friends, family, and coworkers, more people took to sending gifts as a way to bridge gaps, brighten spirits, and stay connected.

However, the more people sent gifts, the more we learned about what kinds of gifts people want. Spoiler alert: People don’t want gift cards.

A paltry 17% of people in the US actually want to get a gift card as a gift, and there’s more than $21 billion in unspent gift cards in the US today. In fact, handing a gift card to a close friend or long-time coworker could have the opposite effect and actually make those recipients feel unseen or unappreciated. In short, gift cards are largely unwanted and go unused, which is not exactly the kind of impression most people want to make when giving a gift.

The solution? Specialty foods.

The growth of the specialty food market means that the options are seemingly limitless for gifters. Gone are the days of choosing between a citrus crate or a jelly-of-the-month club subscription (although those gifts are lovely!). With the growth of ecommerce and changed habits when purchasing food online, the depth and breadth of the gourmet food and drink market are at the fingertips of gifters, and it’s already a habit starting to trend. Consumer and corporate food gifting sales are projected to grow at an average annual rate of 5.2% through 2028, and that’s assuming no other technological advances or improvements in the space take shape.

Gifters are on the hunt for thoughtful and memorable gifts that are just as convenient to send as gift cards. Specialty food brands are launching and optimizing their ecommerce presence. And both markets are poised to benefit as a result.

But why is the collision of gifting and specialty food so serendipitous? Why does it feel like fate intervened, stars aligned, and all that stuff?

Aside from gifters wanting to send memorable, thoughtful, and intentional gifts to their list of lucky recipients, specialty foods make the perfect present for a lot more than you may expect:

1. Specialty foods carry high perceived value.

‍Seventy-seven percent of people who receive a corporate gift equate the quality of the gift to how much they’re appreciated by the gifter. When someone unwraps a gift from a popular specialty food brand, they know that it was made with high-quality, premium, or even rare ingredients they couldn’t get just anywhere.

"There is a general perception of specialty foods as inherently worth more, whether in price or in time shoppers spend to procure them," said Bill Lynch, president of the Specialty Food Association. This perceived scarcity combined with top-end ingredients makes for a gift that’s perceived as highly valuable and makes folks feel deeply appreciated.‍

2. Specialty foods grant permission to indulge.

‍The best gifts are ones that the recipient wouldn’t typically just go out and buy themselves. Commodities are sometimes nice but tend to lack the wow factor more gifters are going for.

Instead, gifting specialty food items is an opportunity to help recipients indulge in life’s simple pleasures. “Convenience and indulgence are two trends driving gains [in the industry],” said David Lockwood, a consumer market research and strategy consultant who presented at the 2023 Summer Fancy Food Show.

In contrast, presents like gift cards are mostly fleeting moments typically spent on something not-so-indulgent and forgettable. Specialty food brands, on the other hand, have a baked-in knack for helping people slow down and truly dig into something delicious. It’s not just a gift anymore — it’s permission to indulge in something simply awesome. (And what other corporate gift has made you do that?)

3. Enjoying great food is an experience.

‍Trying a specialty food is often more than just chowing down. Many times, the flavor profiles or combination of clever ingredients means the recipient gets more than just a snack — they get a full-fledged experience.

A big part of this industry’s success can be attributed to fans of specialty foods who are always looking to explore new foods, new cultures, and new ways to leave party guests going, “Whoa!” with every small bite. When a delicacy is gifted, the moment becomes more than fleeting and it becomes an entire journey for the senses.

4. Values-driven gifting is accessible.

‍More shoppers are bending their buying behavior to reflect their personal values. Whether shopping for themselves or for others, consumers are increasingly wanting their dollar to do more good for the world.

When gifting specialty foods, there is a wealth of brands not just on a mission to craft premium foods, but they’re also vying to do more for the world. Whether it’s saving the bees, uplifting marginalized communities, or sustainability efforts, these values are now a core part of the decision-making process for people thinking about their values as well as the values of their recipients.

Gifters have finally found the ultimate present with more choices to pick from every day with the growing number of retail channels.. But as extra people turn to ecommerce specialty food stores to deploy deliciousness near and far, one nagging problem remains: direct-to-consumer websites aren’t optimized for gifting. So while the consumer is ready to buy gifts, and the food is ready to gobble up, the friction-filled gifting experience is still standing in the way.

Modern Technology Is the Answer to Easy, Breezy Specialty Food Gifting

The companies creating specialty foods are inherently innovative. These are brands devoted to doing something a bit off the beaten path, exploring new foods, and bringing those foods to shoppers. These are brands borne from doing this differently, which could be a good clue as to why these brands are some of the first to adopt new technology to help them innovate further.

Zest is a first-of-its kind platform providing brands with optimized gifting experiences.

While specialty foods are increasingly turned to as the perfect consumer or corporate gift, shoppers are more aware of the outdated experience they have to contend with. Essentials like…

• seeing which items are available for gifting
• including personalized gift note
• adding a custom branded touch
• sending gifts to multiple addresses in a single checkout

… have been out of reach for consumers and brands — until now. The truth is that sending a gift should be just as easy and frictionless as shopping for oneself, and Zest is building the tools that make that notion possible.

Specialty food makers are continuously “innovating with sourcing, ingredients, and promotion.” Extending that innovation to the customer experience is a natural evolution, and one that both the specialty food and gifting industry have been waiting too long for.

Brands that offer the best possible gift-buying experience available, coupled with their own flavor of specialty food and drink, have the power to scale like never before. Just like direct-to-consumer ecommerce, erasing friction from the gifting process is key to providing a renowned customer experience that drives brand affinity, loyalty, differentiation, and growth.

What’s more is that millennials are most likely to purchase specialty food products. Keeping this key consumer in mind, it’s critical that brands vying to grow and scale offer the customer experience that aligns with them. This generation was the first to truly come of age with technology and was there for the birth of ecommerce, making them self-reliant and technology dependent. In other words, they know their way around the internet, and if they don’t get the intuitive and convenient shopping experience they’re looking for on one ecommerce site, they’ll go to one that offers a CX they enjoy more.

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Specialty brands that choose to innovate the ecommerce gifting experience aren’t just going to appeal to this major consumer demographic, but they’re going to do what they set out to do all along: differentiatie.

Through product offerings, company mission, values, and branding, specialty food makers are trying to tell (and sell) a unique story that attracts shoppers. This is not an industry about blending in or competing against blandness. This is not a market for those who are dispassionate about the craft. When a brand in the industry can stand out and compete on their comprehensive experience, they’ve found yet another way to innovate and make it onto more small plates and charcuterie boards everywhere.

Zest’s gifting platform is a total operating system changing brands’ gifting experience, which, in turn, is altering how people send and receive ecommerce gifts entirely. With Zest, specialty food brands can stand out with:

• Easy-to-shop curated catalogs of giftable goods from branded gifting storefronts.
  These dedicated gifting storefronts make it easy for brands to add limited-edition or seasonal products to their gifting catalog, update quantities, and offer shipping of volume-based discounts on the fly. (Oh, all without needing to know a lick of code to make the magic happen.) Consumers can easily scroll and shop the intuitive storefront for ultimate convenience.

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• An optimized multi-ship checkout.
  Multi-ship checkout is a gamechanger for brands scaling their gifting channel. Historically, when a customer wants to send a gift to many people, they’d have to go through the checkout process a bunch, one time for each address they’re sending to.
  
  With Zest’s optimized multi-ship checkout, gifters can upload hundreds of recipient names and addresses in seconds and check out just one single time. Plus, address validation is baked into the process, so no one has to worry about typos messing with their gifting goodness.
  
  
• Modern, flexible gift delivery methods.
  It’s 2024. While many folks are still into sending surprises via tried-and-true snail mail, many gifters want to take advantage of the technology at their fingertips and deploy gifts in other ways.
  
  With Zest, specialty food brands can offer their gifters the option to choose whether they send gifts by shipping directly to an address or deliver them digitally via text, email, or a link they add to anything, anywhere. E-gifting is an accessible, innovative bend on gifting that also doesn’t require the gifter to know anyone’s address at all.
  
  
• Customization, personalization, jaw-drop-ization.
  One of the biggest hurdles to gifting, especially corporate gifting, is the endless back-and-forth of hammering out any type of personalized or customized gift components. For corporate gifting, customers often lean toward sending a gift with a branded touch or gift note, but doing so often means filling out a concierge gifting form and waiting (and waiting and waiting and waiting) for the next steps.
  
  Zest believes these little touches, whether they’re branded logo stickers or gift wrap or personalized note cards, make a huge difference in the gifting experience. So, we’ve erased the friction for customers who want to tack on these additions and automated how they’re processed so neither gifters nor brands have to suffer through a time-consuming custom gift sale.

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• Branded experiences from shopping to checkout and beyond.
  A Zest gifting storefront can be fully outfitted with the colors and imagery of the specialty food brand. A good brand is what builds trust and fandom with customers, which is why not a shred of it is sacrificed when it comes to adding Zest to your tech stack. Our white label gifting solution is like Shopify for gifting — we’re powering the best gifting experience on earth while keep your brand in the spotlight.
  
  The dedicated gifting storefront can don a brand’s custom domain, and even transactional emails can be set up to send directly from the trusted brand. These touchpoints further add to the customer journey by keeping them entirely in the brand’s experience — not Zest’s.

The combination of modern gifting technology and specialty food makers is already proving to be a winning recipe. Zest’s roster of specialty food brand partners stretches to established innovators in the space like Milk Bar, Levain, Brightland, Jasper Hill Farm, Clif Family Winery, Wildwood Chocolate, Kally, and more.

These are brands well-known for pushing the envelope in their categories, so it’s no surprise that they’re some of the first to adopt innovative tech and thrive.

• Milk Bar slashed its corporate gift processing time from 2 weeks to 2 days, which meant the company could extend its holiday gift-selling window an additional 9 days in 2023. The brand captured hundreds more last-minute gift orders and grew sales incrementally as a result. Most importantly, more people were able to easily send the perfect holiday treat because Milk Bar’s modern gifting experience saved the day.
  
  
• Brightland olive oil company grew its corporate gifting sales 50% in its first holiday season using a Zest-powered storefront. The intuitive experience removed friction from the process that led to more gift sales, attracted more repeat gifters, and automatically processed the majority of gift orders, freeing up the Brightland team to focus on high-touch concierge projects and take some well-deserved time off.  

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• Grove Cookie Co. saw a 77% increase in average gift order value year over year. Its Zest storefront has grown wildly popular and this one channel now drives 20% of the company’s total revenue.

Specialty food brands are at a unique time where their industry is growing at the same time as the gifting market. The companies that can tap into this audience of eager gifters with the right technology and experiences are going to be the ones scaling beyond the competition in no time.

Specialty Food Brands, Hungry Gifters, and Zest: The Best Recipe for Authentic Category Innovation

Consumer behaviors, ecommerce trends, and the consumer and corporate gifting industries have all dramatically changed the past five years, culminating in the perfect storm of opportunity for specialty food brands.

To bring each of those changing factors together and unlock the opportunity, specialty brands need to adopt technology as innovative as they are and insert themselves in the perfect place at the perfect time.

With Zest’s modern gifting platform on their website, specialty food makers are set to convert more shoppers, embrace ecommerce trends, and finally provide the experience that makes it easy to send specialty foods as gifts to one or tons of lucky recipients.

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