Small Categories, Big Growth Potential

Small, but fast-growing packaged food and beverage segments have long been a reliable predictor of high-potential product opportunities, especially in times of conservative spending. The market is primed for products for at-home consumption. According to recent data from Circana, 86% of eating occasions are still sourced from home, down only 2% from the pandemic high.

Four of 10 main meals are now prepared in under 30 minutes as consumers eye the freezer to keep ingredients on hand and reduce the number of shopping trips. In addition, with more employees returning to the workplace, on-the-go food products and products suitable for brown bagging are back. And most important, having a unique experience is among the top factors influencing consumers’ food value decisions.

Let’s look at some of the niche food categories that are reporting big sales gains.

• Burning Up the Freezer Case. Plain frozen potatoes (+38.3%) were among the smaller subsegments leading unit sales growth in the frozen case for the year ended Dec. 3, 2023, per Circana, followed by frozen dips (+27.3%), and ice milk/frozen dairy desserts (+22.2%). Other high-growth frozen segments include ice pops/novelties and muffins.

Birds Eye frozen dips, including a Spinach & Artichoke option, are microwave ready as a quick appetizer, snack, or side. Daily Harvest’s Pops, a line of ice pops made with real fruits and vegetables, are allergen friendly and come in fun flavors like Strawberry + Dragon Fruit.

Do-it-yourself shortcuts and ready-to-use frozen ingredients are also driving growth. Unit sales of frozen pizza kits/toppings jumped 143%, for the year ended Dec. 3, 2023, Circana reports.

And with the single-serve specialty dessert category posting impressive growth in the deli and bakery aisle, Gậteaux’s new Petits line of take-and-bake frozen cakes, which serve from two to five dessert lovers, depending on the variety, are right on target.

• Fresh, Please! Marinated vegetables and fruits posted the largest dollar gains (+35.8%) by a refrigerated subcategory with at least $1 million in sales for the year ended Jan. 28, 2024, per Circana.

Raw, fermented, and marinated wildbrine sauerkraut with probiotics in varieties like Caraway Apple Organic Kraut, must be kept refrigerated to preserve the organisms. Shelf-stable marinated vegetables from Poshi are ready to eat as an on-the-go snack.

With overall unit sales down by 2.3% in the refrigerated section for the year ended Dec. 3, 2023, according to Circana, bright spots included pomegranate juice, whipped cream cheese, coconut milk, tortillas, pizza crust/dough, and bread—all small categories that are well worth watching.

• Cultural Crossovers. While many global cuisines remain small consumer product food/beverage categories compared with Asian or Mexican fare, their double-digit growth is impressive.

Sales of packaged foods and beverages connected to Ireland topped $559 million for the year ended Aug. 13, 2023, up 20% in multi-outlet and natural channels, according to SPINS data. For the year ended Aug. 13, 2023, sales of Indian packaged foods reached $291 million (+17%), Korean $250 million (+32%), Polish $153 million (+16%), South American $72 million (+34%), and Vietnamese $9 million (+8%), SPINS reports. Sales of bao buns totaled $53.2 million, up more than 200% for the year ended Aug. 13, 2023, and ponzu sauce sales were $3.9 million (+40%).

Well-known Asian chef Nona Lim introduced heat-and-serve entrées in Singaporean Chicken Curry and Filipino Pork Adobo varieties.

• Healthy Planet, Plant Power. Monitoring the frequency of use of emerging product claims is another surefire way to tap into high-potential pockets of category growth. Unit sales of yogurt with a grass-fed descriptor on the label jumped 16% for the year ended Oct. 8. 2023, albeit from a small base, and fair trade certification descriptors on frozen breakfast food were up by 21%, according to SPINS. In addition, unit sales of snack products with an Upcycled Certified designation shot up by more than 166%.

Unit sales of plant-based jerky and meat snacks are also showing solid growth, according to SPINS. This spring, the Kraft Heinz Not Company debuted NotHotDogs and NotSausages, the first plant-based offerings under the Oscar Mayer label.ft