Ethnic aisle revenues totaled $8.84B this year

Grocery shoppers are strengthening their focus on foreign foods.

Ethnic aisle revenues totaled $8.84 billion for the 52 weeks ending June 16, 2024, with unit sales up 0.8% and dollar sales increasing 4.3% versus the year-earlier period, reports Circana, a Chicago-based market research firm.

“Interest in foreign cuisines is high and continues to get higher,” said Jim Wisner, president of Wisner Marketing LLC., a Gurnee, Ill.-based retail consultancy.

In addition to more Americans sampling new recipes when traveling, an increasingly diverse population is seeking foods that connect them with their heritage, analysts said.

“Food is a language of love for many cultures, including Hispanics and Asian Americans, and they need ways in which they can stay connected to their culture and roots,” said Victor Paredes, vice president, cultural strategy, at the Collage Group, a Bethesda, Md.-based consumer research firm. “They want to pass on traditions and celebrate their holidays and occasions.”

Cuisines and products also are becoming mainstream and are not just for first generation individuals, Wisner said, noting that many shoppers are looking for new food experiences. A Wisner Marketing study found that half of all consumers describe themselves as “adventurous eaters,” with the numbers highest among Millennials and Gen Z shoppers.

“Global foods offer robust ethnic flavors and variety at an affordable price,” said Sally Lyons Wyatt, Circana global executive vice president and chief advisor, consumer goods and foodservice insights. She added that selections are enabling consumers to replicate out-of-home eating experiences at home without the excessive cost of dining out.

A plethora of merchandising possibilities

The opportunity for stronger category activity should entice retailers to make global foods merchandising a strategic priority, Wisner said, adding that retailers can turn global foods aisles into shopper destinations by offering unique and popular selections. “Operators must do a competitive assessment to understand what their competition is offering and where they are with those products,” he said. “There are items that people will go out of their way to purchase.”

Such an assessment is important as the Wisner Marketing study reveals that consumers are frequently purchasing global foods at locations other than their primary grocery stores.

“Grocery retailers need to amp up their loyalty and promotion programs to address the leakage to other channels,” Wyatt said. “They should identify and potentially test ways to engage consumers and offer enticing deals that will lure them back into their stores to buy these foods. Deals should cater to both the quick trips that consumers prefer today and the traditional weekly stock-up trips.”

Offering novel and interesting tastes also will drive greater category activity along with merchandising additional health-oriented selections, including all-natural items and products with plant-based ingredients, less sugar, and more protein, said Kathleen Blum, vice president of shopper insights at C R Research, a Chicago-based market research firm.

Retailers can appeal to convenience-oriented customers as well by cross-promoting global foods with other center aisle products, such as sauces and salsas for a Mexican meal, while spotlighting easy-to-prepare recipes, she said.

Merchandisers should learn the principal dishes of each ethnic group, including the foods that shoppers purchase to celebrate key holidays, when determining the optimal global foods to offer in each location and the items to feature, Wisner said.

Product distributors and country trade associations can educate U.S. grocers on options and studying menus at local ethnic restaurants can further enable retailers to detect shopper preferences, he said. “Authenticity is important when it comes to food,” Wisner said. “There is a huge opportunity for retailers to market global foods that is not being scratched.”

Steeper food costs, however, remain an impediment to category growth, Blum said. “When prices are high, shoppers are less likely to be adventurous and try something new, limiting adoption of global foods,” she said.

Because shelf space limitations are making it difficult for merchandisers to expand product arrays, retailers must identify the essential and indulgent items that are most important to shoppers, Blum said. Paredes added, however, that such limitations will lead more merchandisers to situate global foods next to conventional selections in the center store, which will make it easier for consumers to discover the products and generate trial.

“Global foods require education and cultural awareness in order for retailers to select, source, and/or import authentic goods,” said Ahmad Barber, chief creative officer and managing partner at Bold Culture, a Brooklyn, N.Y.-based multicultural communication and management consulting firm. “These goods may not be within the supermarket owner’s immediate network or desire, which makes it difficult to source or import the best quality.”

The future looks bright

Along with seeking partners that can assist them with product selection and cultural education, retailers should school non-global food shoppers on category tastes and experiences, he said. Demand for global foods will increase, Barber said, “as the cultural sharing of global goods expands through digital networks, migration, travel, and more people experiencing new cultures in other ways.”

Global foods’ appeal will further increase as the U.S. becomes more of a melting pot and greater numbers of shoppers seek to explore the world, both physically and virtually, Wyatt said. “The industry must ensure that different cohort groups are aware of these offerings, their benefits, and how affordable they are compared to eating out or traveling abroad,” she said, adding that retailers should include global foods in their promotions and customer communications.

Private label global food selections will become increasingly prominent as well and enable operators to further differentiate their selections, Wisner said, with product options increasing as more foreign suppliers seek to distribute items in the U.S.

“All the growth in private brands is in premium and better-for-you products,” he said. “Consumers will be happy purchasing global foods store brands if the products are authentic and taste good.”