A hot trend in the food catalog category is offering prepared gourmet meals. But catalogers that sell traditional food gift items ranging from fruits and nuts to cheese and meats are some of the longest standing direct marketing players. Overall, food is a healthy category. A testament to the segment’s strength, total sales by food catalogers are forecast to top $20 billion in three years.
During the first quarter of 2007, according to list brokerage services firm ParadyszMatera, the names of 9.2 million 12-month food buyers were available for rental or exchange. That’s up 1.9%, or 170,000 names, since the first quarter of 2006 and up 4.8%, or 417,000 names, over the past two years.
Individual titles have also seen marked growth since we last looked at the food catalog market in 2005. Gift basket marketer Figi’s, for example, expanded its 12-month buyers file 64% between the third quarter of 2005 and first quarter of 2007, to 1.2 million names. Wine and fine food merchant Dean & Deluca also noted large gains — 54% from the first quarter of 2006 to the same quarter this year, for a total universe of 60,000 customers. While HoneyBaked Ham, which sells not only its namesake meat but other food gifts as well, grew its file more than 15% to 158,000 customers.
Aside from Figi’s, only two other merchants boast more than 1 million names in their 12-month buyer files: Harry & David, whose masterfile contains nearly 1.8 million customers, and Omaha Steaks, whose masterfile includes nearly 1.5 million names.
Fewer food merchants tracked by New York-based ParadyszMatera through the first quarter of 2007 are using incentives than during the past two years — 29% offered an incentive or discount, compared to 36% in 2006.
The decline is most likely a seasonal anomaly, as the majority of food catalogers promote incentives during the busy, gift-giving fourth-quarter. So use of incentives is expected to rise by the close of the year. Free shipping is likely to be a tasty tempter, as 13% of mailers offered it during the first quarter of 2007. For all of last year, 14% of the food marketers offered free shipping as an incentive.
| 1Q 2005 |
2Q 2005 |
3Q 2005 |
4Q 2005 |
1Q 2006 |
2Q 2006 |
3Q 2006 |
4Q 2006 |
1Q 2007 |
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| Total universe | 8.8 | 8.9 | 8.3 | 9.0 | 9.0 | 9.3 | 9.2 | 8.8 | 9.2 |
| Rank | List name | 1Q 200 house file universe | Average order |
|---|---|---|---|
| 1 | Harry & David Mail Order Buyers Masterfile | 1,767,705 | $140 |
| 2 | Omaha Steaks Buyers | 1,455,482 | $95 |
| 3 | Figi’s Fancy Food and Gift Buyers | 1,209,870 | $83 |
| 4 | Swiss Colony Catalog Food and Gift Buyers | 700,689 | $75 |
| 5 | The Popcorn Factory | 390,012 | $55 |
| Source: ParadyszMatera | |||