Retailers must keep pace with evolving palates

DSN Retailing Today,  July 25, 2005  by Debbie Howell

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Ethnic population growth and the increasingly adventurous palate of mainstream consumers have turned the market for ethnic food into a multibillion-dollar opportunity for retailers who can identify new flavor trends and adopt quicker than the competition.

Some ethnic food categories--Chinese, Mexican and Italian--have moved to mainstream status, but additional specific regional ethnic cuisines, ranging from Thai and Caribbean to Mediterranean and Middle Eastern, are now emerging in restaurants and stores. A study by New American Dimensions and About Marketing Solutions predicts demand for ethnic foods will increase 50% over the next decade, driving annual sales to $75 billion.

"The bar has been raised. No more is it about frozen enchiladas," said Teri Soto, president of About Marketing Solutions, of the ethnic food market, explaining that demand for authenticity and trueness of flavor has never been higher, especially among ethnic consumers.

With the Hispanic population in the United States expected to triple in size over the next 50 years, this segment in particular attracts the attention of food marketers--and deservedly so. Food companies ranging from Kraft to Kellogg are pulling out all the stops to reach the Hispanic audience both through advertising and unique food products catering to Latinos.

Exposure to international cuisine through restaurants, in general, is translating down to the retail level, with consumers willing to experiment with new, spicier food products.

"Ethnic items are big drivers for the spice segment because there's so much awareness of worldly cuisines," said Laurie Harrsen, director of public relations for McCormick. "The biggest influences from ethnic cuisine now are Latin American, Asian and Mediterranean."

McCormick's success with new spices such as wasabi powder and chipotle a few years ago have led to increased focus on ethnic flavors including new Latin American spices that debuted this spring. Among the spices are sazon, adobo, completa, whole Mexican oregano, annatto and chili with lime seasoning. Labels on these new spices are bilingual in an effort to target everyone from Spanish-speaking Hispanic to Anglo shoppers.

While many Hispanic consumers prefer to cook from scratch with fresh ingredients, the market is also growing for convenience food items with an ethnic flair. Lipton, for example, has seen strongest growth in its ethnic varieties of noodle and rice mixes, while Epicurean International is seeing significant sales gains as well in both its Simply Asia microwave-ready bowls and Thai Kitchen Noodle Cart entrees targeted to the general population.

"American palates are becoming much more sophisticated," said Thomas Tseng, principal and co-founder of New American Dimensions. "There's an increasing awareness in the broader genres of regional specialties that people are clamoring for."

THE MAINSTREAMING OF ETHNIC FOOD

* Demand for ethnic foods will increase by 50% over the next decade.

* During that time, ethnic food sales will reach $75 billion.

* 1 out of every 7 food dollars will be an ethnic food dollar.

* Robust 4% to 6% ethnic food growth has far outpaced the 2% overall food industry growth rate.

* Three-quarters of ethnic food spending will come from mainstream America, not core ethnic consumers.

Source: PROMAR International

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