The Recent Downturn May Be Blessing in Disguise
Like virtually all companies in almost every industry on the planet, gourmet food manufacturers have been hit hard by the ongoing downturn in the economy. Generally sluggish sales across all channels have been exacerbated by the mass delisting of premium quality gourmet food products by many upscale grocers. While these “de-lists” are always a shock to any gourmet food company’s top and bottom-lines, once the initial shock has passed, it presents an opportunity for specialty food producers to “get back to their roots”. (At Epicurean Foods, we feel qualified to discuss this growing trend because we have first-hand experience with it. We recently suffered de-listing of all of the products that we had with two of the county’s leading upscale grocery stores.)
Many Grocery Stores are Struggling To Survive
The grocery store chains are not immune to the downturn in the economy any more than virtually every other type of business (in or out of the food industry.) As behemoths such as Wal-Mart, Costco, Sam’s Club and Target and others continue to expand their presence in the grocery business, traditional grocery stores are forced to operate in an ever-increasingly competitive environment.
Previously (i.e. when the economy was stronger), this competitive environment meant that upscale grocers tried to distinguish themselves from their competition by offering increased product selection and superior service, among other things. Seafood counters, in-store specialty bakeries, whole international foods sections and broad category offerings of “hard-to-find” gourmet and specialty foods had become the norm for grocery store chains attempting to attract upscale consumers to their store. (For example, upscale lines like our Small Pleasures Teas, pasta culinario pastas and pasta sauces, Windermere Herb Farm Dip Mixes, Rubbit On! Spice Rubs and Regan Ridge Bread Dippers were all available as a premium quality alternative to the national brands.) The prevailing logic was that every grocery store carries bread and milk and eggs. That was a given. To attract the highly sought-after upscale “yuppie” consumer, there needed to be another “draw” to the store. The extra cost of offering the convenience of enabling these customers to purchase their gourmet and specialty foods when they did their regular weekly grocery shopping was a price that many upscale grocers were willing to pay.
Back to the Basics
The ongoing downturn in the economy is causing grocers to “get back to the basics”, where all unnecessary costs are being eliminated. The extra costs of offering the slower-moving gourmet and specialty items have been deemed as unnecessary. As a result, product selection has been severely reduced, if not eliminated entirely, by many grocers across North America. In short, grocery stores are focusing exclusively on selling groceries at the cheapest possible price. There is little emphasis on gourmet.
While the upscale grocery channel was never a central focus of our business strategy, it has now been virtually eliminated as a sales channel. However, once this new reality was fully processed by us, it became increasingly evident that in a Web 2.0 world, the traditional sales channels that we had been using since we started our company in 1993 have been steadily decreasing in importance to us. In summary, we have been transitioning from being “Epicurean Foods International Inc.” to “www.epicureanfoods.com” for the past few years anyways. This latest industry-wide grocery-store product rationalization is just the next step in the transition.
“It’s Not A Problem, It’s An Opportunity”
While it may seem a bit trite to state, this recent industry-wide development is not really a problem for us and for many other resourceful gourmet food companies across Canada and America. Regardless of what the economy does or what decisions grocers make, the gourmet food business continues to grow steadily. Upscale consumers everywhere are demanding different, interesting and unique specialties that add “flavor” (if you’ll pardon the pun) to their lives. Increasingly, the Internet is the channel in which they find these increasingly hard-to-find items. Since 1998 when we first began offering our gourmet foods online through our website, www.epicureanfoods.com, it has steadily grown to become our primary sales channel.
Greg Sprout, Co-Founder,