BORDER CROSSING 2006-09-18

BAO ONG

In the world of health and wellness, retailers are finding that ethnic foods can be a real ally.

More than any other category, foods from other countries are not only ambassadors of different cultures and lifestyles. They often represent the essence of a cooking style rooted in tradition, using native ingredients carrying a message of authenticity and health. From hummus to green tea, supermarket retailers are discovering that health and wellness sections can easily look like a United Nations of food.

Suman Lawrence, marketing and education specialist for the Living Well department at United Supermarkets, Lubbock, Texas, has seen the changes first hand. In the past three years, Lawrence said natural and organic product sales have boomed and that wave now includes more ethnic foods than before.

"You wouldn't have seen whole grain cous-cous three years ago. It was always semolina wheat-based," she said. "There are more brown rice mixtures and pizzas with whole-wheat crust."

The retailer, which operates three banners including the Hispanic-oriented United Supermercado, uses integrated-segregated schematics in merchandising products under its Living Well whole health umbrella. Special black shelving is used to differentiate qualifying products throughout the store, including those grocery aisles containing international foods. Besides Hispanic items - focused on Mexico - most stores also offer up to 15 feet of Asian goods.

"We aren't seeing a giant leap, but we are seeing more inquiries. People are a lot more curious," Lawrence said of consumers looking for more healthful options. "They're willing to try it, especially Indian and Thai. Mexican has always been popular in Texas. It's definitely an area we would like to expand."

Expansion is also on the minds of executives at Minyard Food Stores, headquartered in Coppell, Texas. Mario Chavez, the 66-store retailer's vice president of Hispanic merchandising, said the three-banner chain - which includes Carnival, its own Hispanic-focused marquee - is determining how health and wellness can be promoted through the ethnic category.

"Without a doubt we are seeing [health and wellness awareness among Hispanic shoppers], as are the Krafts of the world in coming out with great programs to target the needs of the consumer in terms of lower calories, lower sugar and fresh items," he said. "That's in our sights, and we are working to make sure we do what is right for our consumer."

Currently, consumers seem attuned more to fresh foods, but that could change as manufacturers reformulate, or introduce more healthful versions, of existing grocery products, Chavez added.

"We've been concentrating on fresh departments in having the variety. The second phase would be to add more variety on lower-sugar and lower-calorie products in our stores," he said.

At Caputo's Fresh Market in Elmwood Park, Ill., what started as an Italian ethnic store in 1958 serves a much wider range of consumers today, particularly those of Eastern European and Polish descent, said Dale Ohman, the store's marketing director.

"We've seen the ethnic food selection grow because it's what our customers need and request," Ohman said. "You can either meet the demand or be left behind."

Success in large part simply requires keeping an eye out on neighborhood demographics. Today, a number of service providers exist who can provide demographic breakdowns of any given region, from as small as a ZIP code to an entire county. The insights provided by direct observation and more sophisticated techniques such as population reports have allowed supermarket operators to move beyond the standard, small selection of soy sauce, chow mein noodles and cans of bamboo shoots. It's not unusual for canned juicy plum tomatoes imported from Italy and passion fruit to show up at a consumer's local retailer.

Consumers themselves will also speak up and make their demands known.

Ohman received a call from a Muslim woman asking Caputo's to carry halal meat - proteins that are permissible under Islamic law. The customer said about 600 to 800 families in the Naperville, Ill.-area would buy the meat. Responding to this consumer's demand, Caputo's decided to test frozen halal meat but sales weren't as brisk as expected, Ohman said.

"People's tastes are always changing and evolving," Ohman said. "We're in an international market. You have to find out what people want and give it to them."

What's fueling the ethnic-health crossover? A number of factors are at work, according to industry observers. In some cases, it's the ingredients used. Individual components of Asian cuisine, like ginger, are being broken out on their own and touted for their healthfulness.

"All of these ingredients are getting their health benefits highlighted now, more than before," Lawrence said. "People are asking, 'I don't know what to do with ginger.'"

In other cases, its a matter of authenticity. The emphasis on freshness, the care taken to prepare a meal and the attention to detail all run counter-culture to American consumer demands for quick foods and convenience.

"It's exotic. It's exciting," said Jay Jacobowitz, president of Brattleboro, Vt.-based Retail Insights, retail consulting firm. "This is all about a pursuit of an experience, not just an eating occasion."

However, eating occasions certainly figure into the healthful-ethnic equation. Travel and restaurant visits are primary motivators for consumers to purchase ethnic food items for home consumption. Many restaurants have lightened their fare or have been emphasizing the healthful qualities of certain cuisines to attract patrons. Consumers bring this approach back to the supermarket when they go food shopping, experts said. As sushi rolls, burrito-inspired wraps and other ethnic foods become more ubiquitous, retailers are finding that these items are more integrated with their mainstream counterparts.

"We're trying to expand it throughout the whole store in offering people smarter solutions and better choices," United's Lawrence said. "Maybe we can suggest a little better frozen pizza than your regular brand. We're trying to open their minds up a little with different offerings and education."

America's changing demographics are also helping retailers add products that tip their hat to ethnic origin and health. Mike Byars, appointed president and chief executive officer of Minyard Food Stores in June, said it's important for retailers in regions with high numbers of foreigners to study what they are buying, and to see how that might affect the conventional SKU mix down the road.

"They are buying much more fresh produce and fresh meats and those types of items than the regular customer," he said of Carnival's primarily Hispanic customer base. "They also are preparing things from scratch more as well. In a sense, they have a healthier approach in their eating habits [than us]."

Manufacturers interested in growing healthful ethnic food sales will have to find ways to satisfy America's desire for convenience. The challenge for the retailer is determining which products are right for their customers. Right now, it's still a work in progress. United has been using its monthly Living Well newsletter to promote healthful recipes and food promotions centered on various world cuisines. Although it's still in the planning stages, January 2007's theme will tie in Asian food with New Year's resolutions.

"Everybody in January is going on a diet, so we thought to give them healthy Asian food as the answer," Lawrence said. "That's how we're trying to approach it, subtly saying these recipes we're including are low in fat, but full of flavor."

Good Advice

Use whole health umbrella programs to highlight particular products.

Overcome two consumer fears at once by hosting healthful ethnic food demos.

Encourage healthful ethnic ingredient sales by including them in meal recipes.

Include healthful ethnic options in circulars and in-store promotions.