FANCY GETS HEALTHY AS HEALTHY GETS FANCY

ROBERT McMATH

ANAHEIM, Calif. -- For several years, "fancy food" products have been getting healthier and "healthy food" products have been getting fancier. That trend was apparent in late March at Natural Products Expo-West here where about 1,500 manufacturers exhibited. They were taking note that major distributors and supermarket retailers were roaming the aisles to find exciting new products in a category they have largely ignored in the past. "Major chains are opening up natural food stores/departments -- sort of stores within a store," said "Uncle Dave" Lyon, chief executive officer of Uncle Dave's Kitchens, South Londonderry, Vt. "People are reading labels, which gives those specialty food brands with healthy ingredients an edge." Those who follow trends in marketing have plenty of evidence of the crossover between the fancy food specialty business and the healthy products market. Products with healthy images are "in" right now. Probably 90 to 100 companies now regularly exhibit at both the Natural Product Expos and the East and/or West Coast National Association for the Specialty Food Trade shows. Forty smaller manufacturers made arrangements to exhibit this year with the Specialty Foods Association, said Ron Tanner, association spokesman. They had a small display in a new, special showcase section.

Food distributors interviewed, both those in fancy food and healthy food, admit that more interest has been shown in the healthy product industry since manufacturers have gone to better packaging. Many crossover manufacturers expressed the feeling that the specialty food buyers do so with an interest in gift baskets and other special occasion purchasing and sell-through, while more grocery stores are looking at so-called "healthy food" for open stock. Ed Ginsberg, president of Chambord International, the company that markets St. Dalfour and Chambord Preserves, said the crossover between the two classes of trade has been dramatic, but pricing has sometimes been a stumbling block for the more upscale type of products that are also healthy. "Specialty and department stores have traditionally been selling the upscale products, even those with healthy images, for high prices, while the mass market, which is taking these products in, offers them at a more realistic retail," Ginsberg said. Some stores that have retailed some high quality preserves in his line for $5.99 (vs. a more realistic $2.99 based on their cost) "appear to want to pay off their mortgages on a couple of jars of preserves," he said. "The gourmet business was a 1980s business," said Ehud Yonay, president of Greater Galilee Gourmet, Santa Monica, Calif. "The 1990s came and the market dropped. The gourmet was luxury, while the interest grew in 'healthy.' "So the people [and the stores] purchased more of the healthy foods. Now the natural foods buyers are coming to the fancy food shows, and the fancy foods buyers are coming to the natural products shows."

Patrick Timpone, president of Timpone's Fresh Foods, Austin, Texas, expressed his thought that "taste is where it's at these days. Natural foods were not always that way. Now that products are being made with better taste, consumers who accepted high-priced specialty foods as a treat are now looking for less expensive 'healthy foods' and products with good taste. And the stores with broad distribution outlets are looking for products to fill the consumer's wants.

"That hasn't always been the case," he added.

Lauri Jae Sweetland, sales manager of Captain Toady's Tasty Sauces, Mercer Island, Wash., said, "This is a writing show. We didn't write one order in the Fancy Food Show [NASFT Show in San Francisco]. "The people there appeared to be there to buy big names and fancy candy. Here, I've written 10 orders already," she remarked near the end of the second day.