Distributors debate the merits of moving international foods into mainstream aisles
IS IT TIME TO BID ADIEU — ciao, auf wiedersehen, adios, goodbye — to the international aisle?
Suppliers, brokers and distributors have seen how well the integration of the natural/organic category has gone in the conventional U.S. supermarket channel, and are beginning to wonder if moving more ethnic foods into the mainstream aisles might bring the same results.
“It's not every day someone walks into a supermarket and says, ‘Boy, I want a German coffee today.’ They just know they want coffee,” said Kevin Reardon, vice president of supplier development for Kehe Food Distributors, Romeoville, Ill.
Reardon, who until recently was Kehe's director of international foods, says the category shares many parallels with health and wellness products, including their overall popularity. The observation has given rise to the idea that pursuing merchandising tactics similar to those being used with natural/organic foods might be appropriate.
“One of the things we've done on the international foods side is to push integrated-segregated merchandising,” said Reardon. “So in a typical salad dressing set, you'd have the big brands in the main aisle, and right next to that we'll have a 4-foot section of specialty salad dressings.”
Kimberly Wallace, national category director-ethnic at Tree of Life, St. Augustine, Fla., reports that integration has become more common in the natural channel, in part because of space constraints. Smaller stores don't always have the luxury of operating expansive ethnic sections. However, in other channels, she continues to see a majority of retailers stocking their international aisles. It's a strategy she believes larger supermarkets should continue to pursue — provided they take steps to promote it properly to shoppers.
“First, you have to educate the consumer that you have the product available in your store. Tell me, where would you merchandise Poppadums,” she asked, referring to the Indian crisp snack, “if not in the Asian Indian planogram in the international aisle? It's not really a cracker or a chip, so how would you integrate that?
The fact that so many foreign foods defy American classification is one reason Wallace feels these products should receive a bit of special treatment in an aisle devoted to them. Another reason is convenience.
“I feel it is better to have the products grouped together to make it easier for the busy consumer to find,” she said.
Wallace points out that a number of conventional retailers still operate highly successful store-in-store sections for natural/organic, specialty/gourmet or international/ethnic foods precisely because their customers find it easier to locate items they want.
“The next step is to have integrated-segregated, but not too many retailers have built up enough business to do this yet,” said Wallace.
Reardon believes the way to build that business is to reorient unique categories like organic or international more toward the mainstream. In this manner, products are grouped by category, not country.
“There's going to be preserves from every country, there's going to be water from every country, so the consumer can find their way when they want to buy a special water,” he said. “They don't have to go hunting for it in the international section.”
A number of products have broken through the specialty barrier and are already part of the mainstream shopping experience. Asian bowl meals are found in the frozen and shelf-stable entree sets; spice displays are a United Nations of flavor in and of themselves; and many Hispanic products are seen as conventional, Wallace notes.
“In the Southwest, Hispanic-Mexican products have gone from being ‘international' or ‘ethnic' to completely integrated into the mainstream aisles. The same goes for Hispanic-Caribbean — Cuban, Dominican and the like — in South Florida,” she said. “The population dictates that product is integrated into the mainstream aisle vs. being segregated into a destination aisle.”
Not all the talk is about integration, however. In some cases, the international foods category is diversifying in the opposite direction. Depending on the cuisine, retailers are further segregating the category into regions. This is especially apparent in Asian and Hispanic foods.
“The key to understanding the cultures is understanding the differences,” said Wallace. “For instance, cremas are prevalent in both Spanish and Mexican cooking; however, the types, flavors and formulations are very different. The same goes for cheeses, beans and chorizo.”
An independent superstore chain in the Midwest, which pulls product from Kehe, broke its Asian food selection into ingredients (24-28 feet) and prepared meals (8-12 feet), according to Reardon.
“We've had to develop a subset within Asian simply because that segment has exploded over the past couple of years,” he said.
If there is one caveat category experts have regarding integration of ethnic foods, it's to avoid moving only the top-sellers out into the mainstream. Reardon says doing so runs the risk of sabotaging the less-popular products that remain behind.
“The rest of the category only works unless you have your keys items in there too,” he said. “Supermarkets are looking for volumes and turns, and a lot of those items won't make the cut at the end of the day.”
- Stores with integrated organics are likely the best candidates for testing international integration.
- Review sales activity of ethnic products already integrated to establish performance baselines for future efforts.
- If pursuing integration, set up SKU rationalization reviews for all products being mainstreamed.
The demand for “authenticity” in ethnic foods has created an ideal opportunity for manufacturers to highlight clean ingredients on their packaging. Calling out these attributes, in turn, boosts the healthful reputation that many international cuisines inherently enjoy.
“Consumers are realizing that more and more ethnic items are all-natural, with fewer preservatives,” said Kimberly Wallace, national category director-ethnic, at Tree of Life, St. Augustine, Fla. “And as consumers are learning about different cultures, they realize that people eat for health as well as pleasure.”
It has become relatively simple for supermarkets to create destination displays featuring healthful, ethnic fare. Kevin Reardon, vice president of supplier development for Kehe Food Distributors, Romeoville, Ill., says he first noticed the trend several years ago when a merchandising manager suggested doing a program built around clean sets.
“We found the majority of our international foods qualified,” he said. “There weren't many additives in the foods we looked at. They come to the table ‘ready to go' in terms of being healthy and natural.”
Indeed, breaking out the healthy ingredients in prepared-food products has done more to propel ethnic foods into the wellness spotlight than anything else, according to Wallace.
“Various spices and honeys have great medicinal benefits,” she noted. “I just saw a couple of new drink items that had lemongrass, ginger, hibiscus and the like listed on the labels as part of the herbal blends.”
— Robert Vosburgh