Ethnic interests see better slotting - food & consumables

DSN Retailing Today, Jan 5, 2004

The influence of ethnic groups and the sophistication of mainstream shoppers for more restaurant-inspired offerings are transforming fresh departments of food stores. More and more, unique produce items once considered rare and exotic are making their way into supermarkets, while sushi has become a standby offering at many stores.

A desire by food retailers to earn the ethnic food shopper's loyalty is driving much of this shift, especially given significant growth of segments such as the Hispanic population.

Even retailers previously conservative in targeting ethnic groups, such as Meijer, are stepping up to the plate. Many Meijer stores feature an international food aisle, but that is being supplemented in some cases with additional foods being tested, said Larry Zigerelli, senior vp of merchandising.

"We are offering our international aisle, as well as an expanded offering in areas where there's a heavier concentration [of ethnic shoppers], and we're testing, evolving, learning," Zigerelli said.

The same could be said for just about any other food retailer today. Adding exotic fruits or different cuts of meat can be risky, but the payoff can be big if executed properly. Both Wal-Mart and Kmart tailor their fresh food offerings to neighborhood demographics, with Hispanic-heavy stores carrying expanded assortments of produce such as peppers, Mexican cheese and specific cuts of meat preferred by certain Latino groups.

"It is very important to have the correct item selection to meet the needs of the ethnic customer," said Ken Whitmire, merchandise manager of perishables for Kmart SuperCenters, adding that growth opportunities are there if selection and price hit the mark.

Produce may be the department with the most obvious ethnic flair. Part of the reason is that groups such as Hispanics, especially those less acculturated, prefer to cook from scratch. Having the right assortment of fresh fruits and vegetables is therefore critical.

Differing tastes also come into play in meat and seafood departments. Asians, for example, tend to prefer buying live or whole fish, which adds a layer of complexity in targeting that group. And some Hispanic customers, according to Whitmire, buy more thin-sliced beef cuts, beef tripe, pork shoulder cuts and chicken leg quarters. Another overriding factor affecting the transformation of fresh departments is desire by mainstream shoppers to experience new tastes. This has led in some cases to foods once considered ethnic becoming mainstream, such as Mexican and Chinese cuisine.

"Much of what was considered ethnic food 50 years ago is now mainstream," said Alan Hiebert of the International Dairy Deli Bakery Association. "However ethnic is defined, most would agree sales are growing."

Hiebert said a sign that ethnic foods have arrived is when they start taking over freezer cases. This has already begun as brands that include Lean Cuisine begin experimenting with new frozen entree recipes such as Orange Beef and Thai-Style Chicken. Meanwhile, ethnic-labeled frozen departments are becoming common, such as sections labeled kosher and Asian at a Central Market gourmet food store in Plano, Texas.

Among the current high-growth segments in ethnic fresh departments are Hispanic baked goods, Mexican cheese, kosher meat, sushi and Thai and Hispanic produce, noted Marcia Mongelonsky, a senior market analyst with Mintel Consumer Intelligence who has studied ethnic food trends.