Sales success with ethnic prepared food depends on location, location, location, retailers say
Chicken korma may sell wildly in some urban markets, but not so much in western Connecticut or West Texas.
At Morton Williams in New York, where there's a culturally diverse and time-starved population, the recent addition of Indian and Asian fare has boosted prepared food sales significantly.
Most of the 12-unit, Bronx-based independent's stores are in Manhattan.
Aside from having a multicultural population, “New Yorkers are adventurous and like to try new and exciting foods,” Laurie Warner, Morton Williams' director of prepared foods, told SN.
In other parts of the country, where the general population may be more conservative in their tastes, local ethnic groups could potentially support certain prepared foods. But that's not always the case.
“We have a huge Latin American population near our Red Bank, N.J., store, but they like to do their own cooking, and we sell them ingredients,” said chef James Conroy, director of prepared foods at Food Circus Super Markets' Super Foodtown and Foodtown stores.
“But they buy lots of our own kitchen-made classic American and Italian dishes, like our signature fried chicken and chicken parmigiana.”
While several retailers said they haven't done much with ethnic items — defined here as any ethnic food beyond American and Italian — in their deli and foodservice programs, consumer research shows ethnic food sales on an upswing in other parts of the grocery store, and that bodes well for store-prepared food, observers noted.
And the future looks good.
Mintel, a Chicago-based consumer research firm, predicts ethnic food sales at retail in the U.S. will increase 19% from 2010 to 2015, after accounting for inflation. That comes on the heels of 6% growth from 2005 to 2010, a tumultuous period for other categories, Mintel points out. Steady growth for the category has slowed, researchers said, but valuable potential looms ahead.
“The growth of ethnic foods creates tremendous opportunities for supermarkets' prepared foods. Consider the growth of Asian or Indian cuisine,” said Krista Faron, Mintel's director of innovation and insights, U.S. research consultancy.
“If consumers are already buying that kind of cuisine from center-of-store aisles, it follows that they'll look for it in other parts of the store,” Faron told SN. “Prepared foods can really allow ethnic flavors and ingredients to shine, since freshness and quality are at a premium. And they also can expose consumers to types of food like carnitas or kimchi that are simply better enjoyed fresh.”
In that vein, Morton Williams Supermarkets just rolled out a variety of Indian fare to all its Manhattan stores, and followed up two months later with the rollout of a wide range of Asian items. Now those items make up 20% of hot table sales in the chain's Manhattan locations.
The rollout was spurred by the undisputed success of a store Morton Williams opened three years ago in Jersey City, N.J., just across the Hudson River from Manhattan.
There, in a new format dubbed Morton Williams Fresh Marketplace, the company set out to satisfy the needs of the surrounding population, which is more than 50% Asian and Indian, mostly young and upscale, with most family members working outside the home.
Prepared foods, both chilled and ready-to-eat, play a major role there, performing even better than the company had expected, officials said.
“Prepared foods there continue to do extremely well,” said Warner, a graduate of the Culinary Institute of America who joined Morton Williams nearly three years ago.
Warner noted that success in Jersey City was a major factor in deciding to roll out the Indian-Asian menu in Manhattan, but she also said those categories would soon have been added in Manhattan anyway.
“We listen to our customers. They want variety, and we saw a possible niche we could fill. It's working.”
While the stores sell the Indian and Asian items on their self-service hot bar/salad bars at $6.49 a pound, the company also offers some plated-up, chilled Indian dinners with retail prices from $5.99 to $8.99.
Some of the most popular items are tikka masala, samosas and sesame chicken, familiar items on Indian and Chinese restaurant menus.
The chain has made room for the expanded variety by consolidating sandwiches and salads in a smaller area of the service case and self-service case. They just replenish the display more often.
Sushi offerings, too, have been expanded and sushi has been added at stores that didn't have it before.
Sales of prepared foods at Morton Williams stayed steady during the worst part of the economic downturn, and are still in a growth pattern, with ethnic items growing at the fastest pace, Warner said.
While Manhattan houses just about any ethnicity imaginable, in other regions of the country, there's more likely to be a pocket of a particular ethnic group in the supermarket's market area.
Where there are large Hispanic populations, prepared food departments in mainstream supermarkets do offer menu items tailored to what Hispanics want to put on the table. H.E. Butt Grocery's Central Market, for example, makes a big thing of making fresh tortillas and a variety of salsas in right in front of the customer.
But others, like James Conroy at Super Foodtown stores, said their Hispanic customers have taken a liking to American comfort foods like fried chicken, meatloaf and meatballs. For that reason, Conroy said he concentrates on what he and his culinary team make best. “That's ‘classic Americana’ and classic Italian, cooked fresh every day,” he said.
“Because of the region we're in — heavily populated with first-, second- and third-generation Italians — and because we're a family-owned company, we have concentrated a lot of effort on Italian recipes,” Conroy said.
“While we do have Hispanic populations around our stores, I haven't had requests for traditional Mexican or Spanish food.”
Even in Texas, which has is a large Hispanic population, there are areas where there hasn't been a demand for Mexican or any other ethnic food.
“Maybe some of our stores in the Dallas-Fort Worth area, but not here in West Texas,” a United Supermarkets official added.
Maybe that's because Texas has a lot of stores dedicated to the Hispanic population. United's Amigos banner would be an example.
A consultant who travels extensively working with supermarkets added credence to that theory.
“In Texas, we have supermarkets dedicated to the Hispanic market — for example, 50,000 square feet dedicated to Hispanic culture and products,” said Terry Roberts, president of Merchandising By Design/The Design Associates, Carrollton, Texas. “Those stores have fabulous bakeries, juice bars and amazing ethnic prepared foods areas with large picnic table areas for eat-in. These are very dedicated formats,” targeting the ethnic shopper. So there's no need to seek ethnic prepared food in the mainstream markets unless it stands out theatrically like it does at H-E-B's Central Market.
In Simsbury, Conn., Brian Devoe, co-owner of Fitzgerald's Foods, said he has not had any reason to add ethnic foods to his successful prepared food program.
“We're just sticking to good old American comfort food, which we do very well.”
Meanwhile, Mustard Seed Market & Café, based in Akron, Ohio, illustrates what consumer researchers, including those at the Hartman Group, Bellevue, Wash., have told SN — that some consumers seeking to eat a healthier diet relish particular ethnic foods partially because they often feature interestingly prepared vegetables and whole grains and ingredients they know are good for them.
Carol Moore, retail foodservice manager at Mustard Seed, a two-unit natural food market, commented on the combo of taste and healthfulness of ethnic foods as a boon to business, adding that the company will continue to add such items.
“Our challenge is to strike a menu balance between old favorites and those that include some far-flung flavors, some adventuresome extras to capture those ready to take a few chances,” Moore said.
“New and exciting dishes with authentic ingredients are opportunities that await us as we take global flavors beyond basic Mediterranean, Latin and Asian fare.”
Harry Balzer, vice president, NPD Group, Port Washington, N.Y., meanwhile shed light on ethnic food trends in restaurants — often a predictor of what's to come in retail.
While ethnic menu items in mainstream restaurants have seen flat growth over the past 10 years, most important is that ethnic dishes, including Mexican, Italian, Asian and Indian, have become staples, he said.
“Here's what's important,” Balzer said. “Last year, ethnic items accounted for 11% of all orders in all U.S. restaurants, the same percentage as in 2002. In other words, they're here to stay.”
“Just think — one out of every 10 restaurant meals served is ethnic.”