Specialty Food Industry Strong--Despite Weak Economy

[Suzanne Ryan]

I've been reading all sorts of reports about how the specialty food industry is continuing to climb in the recession. Some even say the downturn has boosted gourmet food consumption.

I breathed a sigh of relief when I heard that. After all--the specialty food sector is my bread & butter.

Yet the news didn't come as a surprise.

America's palate is becoming more refined. If we have to cut out restaurants and culinary travel vacations...darn it--we're going to make up for it somewhere else! And that somewhere is turning out to be specialty food shops, catalogs & online stores.

One quoted analyst had this to say (and I paraphrase): "If your specialty food isn't selling well right now--you're doing something wrong."

He's got a point there. There's a hungry market and they are still willing to spend. It's a matter of connecting with them--and building a relationship.

On the other hand, I'm sure it also depends on what you're selling. Cheese, chocolate & coffee are doing phenomally well right now. Caviar and fois gras...not so much.

I'd be interested in finding out what other types of specialty foods are doing brisk sales. And which ones are harder to sell in a tough economy.

If you have any thoughts on this--or want to share your experience...please feel free to comment.

Thanks!

Suzanne Ryan
The Gourmet Copywriter

[Suzanne Ryan]

Jan--thanks so much for sharing. Your experience puts a human face on all the dry statistical reports we hear about in the news.

It's very interesting to me that you have more negotiating power with co-packers and landlords. I've heard it said that small businesses have a bit more advantage in this economy than large enterprises. I think you gave some good examples of areas where you can use the downturn to forge better deals--and grow.

As for the credit situation...it's disturbing how businesses with good paying history are being punished. I'm not an economic expert--but I'm wondering if the soured relationship between financial companies and their customers is fixable. When times were good, we all sort of ignored their shoddy practices and hidden fees.

It would be interesting to hear from people who are finding alternative ways to deal with this.

Good luck, Jan.

[Jan]

The economy has affected my business two ways. Co-packers who usually have higher minimums than my company could never meet are now working with us to produce our products. We need to move into a climate controlled warehouse. Landlords are more willing to work with us on short term leases and offering a free month's rent. Before leasing agents and landlords wouldn't work with us on leasing terms.

Some of my friends thought I was crazy to starting a new division during this bad economy. My feeling is that people still have to eat. They might buy less of a product but they will still buy sweets. I might have a lot of competition but my products are in a niche market. Consumers are more educated about speciality foods.

The worst part of the economy for my business is the fact that our credit cards interest rates have skyrocket and banks are cutting our credit limits. We have been good customers and used our credit responsibly. I learned the hard way when my personal banking institution denied me for a small business credit card. I had received pre-approval offers for at least six months and thought since I had done business with that institution for over a decade I might have a chance. I had a credit score in the 720s.

If I can't purchase inventory I have no business. Most small business owners can agree with the fact that they have used credit cards more than they should have. I couldn't use the traditional methods of funding my business because I was young when I started. I doubt any bank would have given me a loan with less than two years of credit history. Now that I have build my company's repayment history that doesn't matter to banks anymore. One institution now reports my business credit card on my personal credit report. Its not listed as a business credit card on my personal credit report. When I was complained I was told that it was in the credit card agreement. You need a law degree to read most credit card agreements. I thought the financial institution wouldn't report the account long as it was in good standing. The rules of credit for small business owners have changed. We all must adapt to the changes.