-By Ann Daw

Ann Daw is President of the National Association for the Specialty Food Trade (NASFT), a 2,800-member organization of innovative, entrepreneurial companies in the food and beverage industry. Most recently, she was with Kraft Foods as Senior Vice President of Business and Marketing Development in the International Division and VP of Global Marketing Resources and Initiatives. She previously headed Strategic Planning for Phillip Morris International, and led Marketing and Sales for the Asia Pacific Division of the company out of Hong Kong.

Q. The concern over the value of the U.S. dollar continues to follow specialty food retailers and importers. How do you suggest these groups work together to keep the specialty market growing?
A. It's a simple fact that products from Europe are costing more than they did in the past. But many of these products are unique offerings that have become a part of consumers' lifestyles. Importers and retailers need to promote the distinctive aspects of these products, enforcing the notion to consumers that they are worth the premium price that is necessary for all in the industry to keep selling these products. That can be done with point-of-sale material, staff education and other promotional vehicles that reinforce the differentiation of these products.

The Summer Fancy Food Show, which is the most international of our three shows, is the perfect opportunity for retailers, international manufacturers and importers to talk about what they can do to keep European products selling despite the challenge of the Euro.

Q. With the same concerns of the U.S. dollar, what opportunities do you see for U.S. specialty food producers both domestically and abroad?
A. The weak U.S. dollar presents opportunities for domestic specialty food producers. Some consumers will be looking for alternatives to European products, and the wonderful artisanal products produced in the U.S. are a good alternative. But many domestic producers are facing their own problems, notably higher commodity costs, which are also creating price pressure. Differentiation is key; if you have great differentiation, then your products still should be perceived as "expensive and worth it."

This is a good time for American producers to look at overseas markets to sell their products. NASFT research shows that about 500 of our members, roughly 22 percent of the membership, do export. The NASFT in partnership with Food Export Midwest has developed programs that encourage American producers to export. We have been especially successful in Japan and the United Kingdom.

The burgeoning middle class in Asia, particularly in China and India, are interested in American products and have money to spend on specialty foods. I believe that you will see NASFT members selling more products there in the future.

Q. How can specialty food retailers continue to make their stores attractive shopping experiences for consumers worried about the present economic climate?
A. The key is "the experience." These well-differentiated products -- whether they be artisanal, organic, natural or from local producers -- give an affordable luxury and help consumers escape from the current economic pressures. Specialty food retailers should further enhance their product offerings and experience, because they have a competitive need to do so, maintaining differentiation to get consumers through their doors.

With the ever-increasing price of gas, people will be going out to eat less frequently. That provides a great opportunity for specialty food retailers to sell prepared foods that often equal restaurant quality but can be enjoyed at home.

Q. How would you describe today's specialty food consumer?
A. NASFT research in partnership with Mintel reveals some amazing information about the specialty food consumer. People who buy specialty food are often young; those between the ages of 25 and 44 are the most likely to buy. These people work out a lot, enjoy going to museums and are socially active. Retailers need to merchandise to this younger specialty food consumer to be successful, today and into the future.

Q. What do you see as the most important challenges facing specialty food retailers in the next five years?
A. There will continue to be blurring of retail, especially between natural food stores, supermarkets and the traditional specialty food store. Specialty food retailers need to react to market conditions and become the knowledgeable food source for their customers. As "local" plays more of a role, specialty food retailers will need to champion foods from nearby entrepreneurs. Everyone needs to adapt to stay competitive because the consumer will go to the place that satisfies his or her needs best. This bodes well for specialty, when one thinks of the products that are truly differentiated from the mainstream.

Comments? mmoran@gourmetretailer.com