Simply look around when
you leave your house going to the grocery store, the mall, a kid’s baseball,
soccer, or basketball game and you might just notice like most people a shift
in the demographic make-up of the people around you according to Steven Johnson
Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Back in the day we call
the U.S.A. a melting-pot of diversity that was driving increased consumption in
everything. Today, an increasingly diverse U.S. shopper
base is creating opportunities and or road blocks for food retailers from
restaurants, convenience stores, grocery stores and bodegas according to
Johnson.
With every new wave of
immigrant there is growing array of multicultural consumers that are helping to
fuel grocery store stronger center-store global foods activity, with ethnic
aisle sales totaling $8.27 billion for the 52 weeks ending June 18, up 13.1%
from the year-earlier period and nearly double the 6.8% increase for total
store sales, reports Circana, a
Chicago-based market research firm. Unit sales reached 2.7 billion, down
0.7%, but significantly below the total store sales decline of 3.2%. Ethnic
aisle sales comprised 0.7% of total store sales. Let’s look in some detail
about current opportunities from the grocery report and see how or what we can
learn to drive menu magic within the grocerant niche, restaurant sector, or the
convenience channels.
Circana found that, “Dollar sales of
Mexican foods totaled $4.35 billion, a 16% increase from the year-earlier
period with unit sales of 1.44 billion, a 0.7% gain. Asian food revenues
reached $1.62 billion, a 14.1% increase, with unit sales of 578 million, up
0.2%.
Victor Paredes, executive
director of cultural strategy at the Collage
Group, stated, “The explosive growth of multicultural populations is
continuously transforming food culture and the American taste palate,” ….
“Global foods are expanding in the center aisles of supermarkets and pushing
out beyond the ethnic food aisle.”
The increase in revenues
is partly due to an increase in multicultural consumers seeking out foods and
brands that help connect and preserve their cultures, as well as a greater
expectation for supermarkets to carry their preferred selections, he said.
Eighty-seven percent of Hispanic Americans in a Collage Group survey, for
instance, indicated that preparing meals from their culture is an important way
to maintain traditions, compared to 61% of non-Hispanics.
To meet such interests,
retailers should analyze the shopper demographics and behaviors in each store
when choosing the appropriate global foods to merchandise, said Andrew Criezis,
senior vice president and general manager, global SMB, for New York-based
consumer intelligence company NielsenIQ.
That includes age, ethnicity, income, habits, preferences, and dietary
restrictions, along with detailed information from a representative sample of
consumers over time to gain insights into purchase patterns and product
feedback, he said.
Do you Want to Build A
Larger Share of Stomach
Offering global selections
that meet the expanding consumer interest in health and wellness is also
essential, Paredes said, noting that Collage Group research found that more
than half of multicultural Americans often or always make a special effort to
purchase food made with high-quality ingredients and which provide excellent
nutritional benefits.
Other important sales
triggers include products with authentic ingredients, and store signage that
communicates product information in the shoppers’ native language, he said,
noting, for instance, that 30% of Hispanics prefer to go to stores that have
signs in Spanish.
Studying the popular
foodservice selections in each area can better enable operators to determine the
pertinent global foods to offer as well, said Scott Love, Circana senior vice
president of retail client service.
For greater product
visibility, supermarkets should situate selections in a designated global or
ethnic section on store shelves, he said, while also providing all the
ingredients for a given dish rather than “a partial meal solution.”
Ensuring that shoppers are
aware of the global foods and can easily locate selections in-store and online
is vital, said Kathleen Blum, vice president of shopper insights for Chicago-based C + R Research. Supermarkets
can address such issues through advertising and in-store signage and displays,
while leveraging shopping apps and retail websites to further highlight new
offerings, she said.
Yet, merchandising a wide
array of global foods can be challenging because of limited shelf space, Blum
said. “Focusing on shopper insights and category management is important in
order to know which products to showcase in-store and how e-commerce can be
used to build upon the in-store assortment as needed,” she said.
Nevertheless, more
supermarkets are expanding their global food offerings in the center aisles as
they become aware of community diversity, cultural nuances, and the buying
power of multicultural shoppers, said Ahmad Barber, chief creative officer and
managing partner of Bold Culture, a Brooklyn, N.Y.-based multicultural
marketing and consulting firm.
“Acknowledging this
diversity requires action,” he said. “America’s fabric is made up of ethnic and
global people and the foods they desire must be available.”
Spurring additional
activity from another potent buyer group — the non-ethnic or non-multicultural
shopper — however, remains a significant challenge, Criezis said. “Some
consumers may be hesitant to explore unfamiliar products due to lack of
exposure or knowledge,” he said. “Retailers need to create awareness and
educate consumers.”
Measures can include
offering cooking tips, recipe suggestions, and competitive pricing to encourage
purchasing, while ensuring there is a diverse range of global selections, he
said.
“Retailers should go
beyond targeting only ethnic or multicultural consumers when promoting global
foods,” Criezis said. “They can attract a wider audience by broadening the
marketing efforts and showcasing the unique flavors, ingredients, and benefits
of these products.”
Operators also must have
the necessary category knowledge and cultural awareness if they are to offer
the most appropriate global foods, Barber said, noting that such selections
“may not be within the supermarket owner’s immediate network, which makes it
difficult to source or import the best quality.”
In response, retailers should team
with global food suppliers and other partners that can provide sourcing
support.
Moving forward, factors
like globalization, the drive for authentic and mission-based foods, the
scientific validation of health benefits, and recognition of the value of
diversity in food will spur greater shopper interest in global selections,
Criezis said.
Demand will further
increase as more consumers experience new cultures, Barber said, adding that
global foods “will continue to be used in traditional and innovative ways by
the new cultures exposed to them.”
It’s at the
intersection of global flavors, your local demographic make-up and your
existing customer base that introducing new menu items will contribute driving
customer trial and migration. Build your
brand better by building it for those living nearby.
Looking for success clues of your own? Foodservice Solutions®
specializes in outsourced food marketing and business development ideations. We
can help you identify, quantify and qualify additional food retail segment
opportunities, technology, or a new menu product segment. Foodservice Solutions®
of Tacoma WA is the global leader in the Grocerant niche visit us on our social
media sites by clicking one of the following links: Facebook, LinkedIn, or Twitter
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