Gifts: Food Outperforms Many Other Categories


In an economic climate that hasn't been kind to many gift categories, consumer food gifts grew by 9.6%, to $14.9 billion, between 2007 and 2009, according to a new "Food Gifting in the U.S." report from Packaged Facts.

In comparison, total consumer gift purchases rose by 7.4%, to $112.9 billion, during the same two-year period. However, total 2009 sales of gift cards slipped 3.4%, and while per-person total gift expenditures rose between 2006 and 2008, spending declined in all gift categories but household supplies, small appliances, transportation and education.

The food-gift trend was the reverse: Per-person spending declined between '06 and '08, but rose substantially last year and is expected to rise again in 2010. Packaged Facts projects that healthy growth across all food-gifting channels will drive sales to more than $21 billion by 2014.



Meanwhile, corporate food gift-giving increased 3.8%, to $2.7 billion, between 2007 and 2009. Total corporate gift-giving, which is a mature market that grows slightly each year, rose just 1.3% (to $8.1 billion) during the period.

Specialty foods -- meaning gift-packaged foods other than chocolate/candy -- are driving food gifting's growth (although gift chocolates sales have also increased, to a lesser degree), according to the report.

"Specialty foods are the main component of food gifts and baskets because people want to give gifts that are unique, personal, indulgent, convenient and fun," as well as likely to be used by the recipient, points out Packaged Facts publisher Don Montuori. "And for many consumers, buying specialty foods during a recession is an affordable luxury that meets their criteria for an 'ideal' gift for others, or even themselves" -- explaining why food gifts have historically done well during tough economic times.

Continuing consumer interest in organic, natural and gourmet foods, as well as more sales of "healthy" gift baskets, are also fueling specialty food gift purchases.

Supporting the market opportunity for quality, healthy food gift items, Packaged Facts consumer research conducted in May/June of this year found that 53% of adults are interested in high-quality foods and 30% say they want healthy products -- both of which represent increases in interest compared with PF's 2007 survey. This suggests that there's a clear market for better and healthier food gift items, the report points out.

Consumers also like the convenience of food gifting. For example, 74% of 2010 survey respondents said that they like being able to purchase specialty food gifts online. However, while online food gift retailers account for about a third of the market last year, brick-and-mortar retailers still had a nearly 50% share (and mass merchandisers have the lion's share among those traditional retailers). Purchases through direct marketers make up the rest of the market.

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