Food products for niche markets

Learn more about how to develop a niche food product that will stand out from the rest.

What comes first, the food product or the target consumer? Unlike the chicken and egg, this question actually has an answer, and it is critical to the success of a business. A food business must always begin its journey by finding a specific target audience that has an existing need or want. It is risky and expensive to start with a product and then look for customers to buy it.

Once an existing need or want of a target audience is identified, a new product should be created to fill a specific niche role. This new product can be made by:

  • Improving an existing product
  • Adding value to an existing product
  • Inventing a new product

In considering how to create a niche product, businesses need to consider both demographic and buying trends while deciding upon a target audience to sell to. Demographic trends in America right now include smaller households, an aging population, and increasing Asian and Hispanic populations. Buying trends in America include wellness, indulgence, convenience, value and ethnicity.

Those interested in wellness like pure foods that are local and less harmful to the environment. Highlighting attributes such as “locally made,” “organic,” “natural,” “nutritional” and “made with Michigan products” can get that demographic interested in your product.

Those interested in convenience want it easier. They want to be able to multi-task so they can save time on shopping, they want food easier to prepare and use, and some of this segment is interested in food packaged for single users.

Finally, more and more interest is being shown in ethnic foods with two versions of this trend being most prominent. One group wants authentic ethnic food because they are descendent from that culture. Another segment of the population desires ethnic food to add diversity to their diets but aren’t necessarily from that culture. Examples of ethnic foods include Halal and Kosher foods, as well as Middle Eastern, Thai, Chinese, Mexican, and Italian cuisines.

Small businesses can add value to their products by adding new attributes or highlighting current, appealing attributes. This strategy combined with carefully selecting the package design, label and increasing the product’s convenience can lead to a more marketable product.

The MSU Product Center, in partnership with Michigan State University Extension, provide product development assistance to help Michigan entrepreneurs develop and commercialize high-value, consumer–responsive food products. For more information, visit the MSU Product Center website or call 517-432-8750.

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