Scottish food gift basket

Retailers leverage the selling power of gift baskets

With more than $3 billion in sales, the gift basket industry has come into its own as a way to market and sell specialty items, including gourmet food and upscale housewares.

Many retailers view gift baskets as a growth opportunity for their business, whether the emphasis is on items for individual gift-giving or corporate sales.

Tim Manale, vice president at A Southern Season, Chapel Hill, N.C., said the company now prepares in advance more than 100,000 gift baskets for the fourth quarter alone.

"So we definitely regard our gift baskets as a growth category," he said. This is a big step up from the 100 premade North Carolina-themed baskets the retailer offered in the early '80s, Manale said.

David Porat, owner of Chelsea Market Baskets/Fine Food Marketing, New York, said the mail-order gift basket segment "trends the best" among his suite of businesses, which includes a retail store and an importing arm. Online gift basket sales accounted for 25 percent to 30 percent of his retail gift basket business, he noted.

The winter holidays have traditionally been a big gift basket sales season, and those in the industry said that continues to be the case.

At Andronico's Market, gift baskets are redesigned each year based on consumer buying trends. Custom baskets are also created by the floral department and merchandised throughout the store.

Bill Andronico, president and chief executive officer, noted while gift baskets are sold year-round, peak times are Christmas, Valentine's Day and Easter. During these key periods, the company outsources the production of its baskets, based on a "recipe" created in house. Plus, staff also creates custom baskets per customers' request.

Tracy Chesman, director of sales for iGourmet.com, an online retailer specializing in cheese and other gourmet products, said holiday sales are more than half gift-related, whether it's baskets or single-- gift items.

Although the iGourmet Web site offers a variety of basket options, and they are updated each year before the Christmas season, Chesman said staff will also prepare custom-designed baskets based on a customer's choices.

Either way, Chesman noted, "we only put great products in our baskets; no fillers just to take up space. Ours are about what's inside."

Chesman acknowledged presentation is also important because it leaves an impression with the recipient. Although, she noted, that doesn't necessarily mean using a standard gift basket format.

"I'm not so excited about wicker anymore," Chesman said, adding they've been successful using cheeseboards as the base for the gift items.

Porat is also a strong proponent of using quality items in his baskets.

"Our business is built on picking out things you want to eat," he said. "It goes beyond the surface of the package."

Many of Chelsea Market Baskets offerings feature items Porat imports, such as Scottish shortbread and tea, products from local companies, such as the rugelach he uses, or items under his own label. By using signature products, he said, the gift basket is both unique and an advertisement of sorts for his lines.

Porat agreed that presentation makes a difference. "A gift needs to be full and abundant," he explained, "but what is ultimately in the gift is most important."

Often cheaper containers, he said, wind up in the garage or basement. "It becomes a throw-away product."

To combat that, Porat said he likes to use better baskets and quality containers, such as lidded hampers or boxes.

Manale of A Southern Season said he's also participated in the movement away from standard wicker baskets into more interesting containers. "At first we used mostly plain willow baskets," he said, "but now the offerings are by far more diverse."

"Baskets" might include Asian-style trunks, metal containers or even champagne buckets.

And the contents, Manale said, have trended more upscale. "The consumer is definitely more educated about food these days," Manale said. A Southern Season's baskets use a variety of ready-to-eat products, ranging from sweet and savory snacks to beverages, cheeses and meat.

Andronico's has witnessed good response to its wine gift baskets, which feature special wines and accessories such as corkscrews and wine charms alongwith cheese and crackers.

A housewares item, such as a colander, serves as the base for its pasta basket, which contains ingredients for a complete meal-- pasta, sauce, fresh garlic, breadsticks, olive oil, sun-dried tomatoes, dried porcini mushrooms, utensils, parmesan and a cheese grater.

The key, Andronico said, is to "work with a customer's budget to create the most appealing basket for the money."

While gift baskets may catch a customer's eye when they are in the store, retailers are finding it's also important to let them know about these items in other ways.

Andronico's features its baskets in ads, flyers and on the monitor screens at the register. Each floral department also has a photo album of gift basket selections.

Manale said A Southern Season features its baskets on its Web site and in its mail-order catalog, which it also inserts in the local paper as a selling tool.

Noting its retail store "is definitely a way to endorse the gifts we send," Chelsea Market Baskets' Porat said most of its gift basket business takes place over the phone or on the Internet.

To help this along, the company's Web address "is now printed on everything we do," he said.

This year, Porat added, he also invested the majority of his consumer marketing dollars into a 36-page, full-color retail catalog, which features different gift baskets and their contents.