Vermont specialty foods are an important subset of the state’s overall value-added product market. Food manufacturing is the second-largest manufacturing industry in Vermont, with $3 billion in economic output.1 Specialty foods are considered unique, high-quality food items typically produced in smaller quantities than their mass-market counterparts. As such, they may command a higher price point, though increasingly specialty food providers compete against less-expensive, mass-produced brands.
Many Vermont specialty food companies have grown to be nationally recognized brands. These enterprises create diverse employment opportunities including manufacturing, marketing, distribution, and sales. They are also an avenue for business owners to contribute to the state’s food system—ideally through sourcing local raw ingredients—and economic development. Additionally, specialty food items are an important diversification tool for some farmers, providing a critical year-round revenue stream, either from the sale of ingredients to another producer or from manufacture and sale of their own products.
Vermont specialty foods include pickles, jams, jellies, relishes, sauces, dressings, chocolates, candy, cheese, yogurt, spreads, vinegars, pastes, marinades, crackers, snacks, cookies, and more. Depending on the type of specialty food, production may occur on the farm, by the producer in a commercially licensed kitchen, at a food-manufacturing facility, or through a private-label or co-packing service.
Many Vermont products highlight regional and local flavors and capitalize on place-based branding that in turn supports the state’s many agricultural producers (e.g., Vermont cheeses and dairy farms). Products are sold to consumers via farm stands, as part of community supported agriculture shares, at farmers markets, online via company websites, and at a wide range of retail markets statewide, nationally, and globally.
Direct-to-consumer sales are critical in the early stages of launching a specialty food product. As businesses grow, they may choose to expand to larger geographic markets by either working directly with regional, national, and international retailers and distributors, utilizing support services such as food brokers or marketing/brand-building businesses, or attending trade shows and other business-to-business events.
Specialty food business models vary from small single operators, to cooperative models, to corporate ownership. Although business growth is desired, specialty food businesses that attract acquisition by out-of-state companies risk relocation of their operations. While some manage to stay, several businesses recently bought by larger companies have been moved out of the state, resulting in a loss of valuable jobs and state tax revenue.
Vermont is home to food business incubators and co-packing facilities which support small food producers and farmers to commercially scale their operations. Vermont has regional distributors, which focus exclusively on helping Vermont specialty products reach diverse consumer markets (see Major Metropolitan Markets and Distribution briefs).