Ethnic foods heating up

With consumer awareness on the rise, the refrigerated/frozen ethnic foods category is gaining ground at retail. For once, grocers may want to thank the restaurant industry—in this case ethnic restaurants ranging from Indian to Asian to Mexican and Middle Eastern—for the growing sales of refrigerated/frozen ethnic foods at their stores in recent years. As more ethnic restaurants open across the country—helping more consumers become aware and accustomed to these types of foods—shoppers are looking to grocery stores to offer an alternative to outside dining. Many manufacturers have noticed the trend. They are releasing items by the boatload in the category, giving consumers the option of going to the food store to purchase ethnic items that can be quickly prepared and purchased for a fraction of the cost of going out to dinner. The result has been a steady double-digit increase in sales of refrigerated/frozen ethnic sales at grocery stores. Industry observers say new items are continually flooding the marketplace, featuring better quality and more authentic tastes. “From the top-line view, the ethnic marketplace is still on the rise,” says Mike Ryan, vice president of sales and marketing for Deep Foods/Tandoor Chef, based in Union, N.J. “Indian cuisine, in particular, is yielding double-digit increase year over year. Though Indian cuisine may be a smaller face than some of the other ethnic categories such as Latin, it is growing by leaps and bounds because there is an acceptance and a wider popularity of the cuisine in general. Consumers are more familiar with it through restaurants.” While Asian and Mexican foods are generally the most popular cuisines, the growth in the category is coming from many exotic types of foods. This includes products from such locales as southeastern Asia, Lebanon and Egypt and South America. “For us, we’ve worked hard to introduce America to traditional Indian spices and flavors,” says Ryan. “By introducing our own line of Naan Pizzas three years ago, we brought a familiar item into America’s homes, and in doing so, introduced Indian flavors. America knows and loves pizza. We simply gave it an ethnic twist, knowing that consumers were more likely to branch out and try new cuisine if it was fused with a food choice that they already loved. We found consumers are familiar with the word pizza, but unfamiliar, at least initially, with the crust that we use—the authentic Naan. The seasonings and topping that we’re putting on our pizzas are distinctly Indian.” While an increasing assortment of merchandise has drawn some consumers to the refrigerated and frozen cases for ethnic products, better quality merchandise has played the largest role in the growth of the segment. “A decade ago, there was Goya in the ingredients aisle and very little else,” says one retailer. “There were only a few items in our cold cases and what was there was certainly not the best quality product around. I guess you could say that not many people paid attention to this category in the past.” Goya officials say it is extremely important that retailers work with suppliers to match product assortment with shopping patterns and demographics. “The goal is to ensure that the right product is there for the marketplace,” says an official for the Secaucus, N.J.-based company. “Retailers need to use the information resources we have to improve space planning and tap into our marketing initiatives to develop consumer interest.” Jack Acree, executive vice president for Saffron Foods, a division of the American Halal Co., based in Stamford, Conn., says ethnic foods are driving a significant amount of the sales in the frozen aisle, with growth of about 25%. “The items that are performing best are those that excite consumers with new cuisines and flavors and also incorporate the natural and healthy attributes today’s upscale consumer is looking for,” he says. Observers say the consumer’s more harried lifestyle will also help build sales. A recent study by Cornell University shows that moms with full-time jobs spend about 3.5 fewer hours per week on household chores than stay-at-home moms. “That study further stipulates that these findings are consistent across socioeconomic class measured by the mothers’ education, family income, race and ethnicity,” says Rachel Cullen, president and CEO of Dinuba, Calif.-based Ruiz Foods. “Therefore, the study further shows that working moms are significantly more likely to spend time purchasing prepared foods, takeout from a restaurant or prepackaged ready-to-eat meals from grocery stores.” She adds that these same consumers still want to enjoy their ethnic favorites at home. “All multicultural groups typically over-index in the consumption of their own ethnic cuisine when eating and preparing food at home,” she says. “What’s noteworthy is that Hispanics are estimated to make up 17.2% of the domestic population and forecast to increase by another 12% by 2018, making this group the fastest-growing ethnic group, according to the U.S. Census Bureau.” Ryan thinks that products in the cold cases at supermarkets give some shoppers the opportunity to experiment with new cuisines without much risk. “This is how people are exposing themselves to Indian cuisine without really getting too adventurous,” he says. “Additionally, there’s a lot of buzz in consumer channels right now including media and television. With the Cooking Channel having an entire show dedicated to Indian cuisine and mainstream articles about how to make Indian food at home, Indian cuisine today is widespread.” Retailers need to get more aggressive with the category if they want to maximize sales. Observers say that retailers have to add a wide assortment of products to satisfy changing palates. They also stress that quality is paramount and consumers are looking more at satisfaction than price points when it comes to these products. “The only limiting factor right now is getting the appropriate space in the freezer case,” adds Ryan. “There’s only so much room in each freezer case in grocery stores to reach the consumers. However some retailers are getting tuned into the trend and adopting best practices for the ethnic side, creating a four-door or two-door case for our products so that it’s easier for a consumer to find them.” Dinning on diversity Retailer and suppliers understand that consumers are looking for something new and unique that replicates what they are eating at restaurants or even food trucks for lunch, says Acree, adding that it is also important that packaging be relatively simple as not to turn shoppers off to the product. Goya Foods has a wide assortment of products in the category. The company offers frozen products in the Mexican and Latino cuisine areas, as well as plantains, fruit pulps and vegetables. Goya officials say they continue to expand the product line based on demographics, improved formulation of existing items, new packaging and convenience in preparation. These initiatives are supported by in-store demonstrations to increase trial and product awareness. Cullen says that Ruiz’ signature El Monterey brand is selling very well, with the line grabbing seven of the top 10 SKUs in the frozen Mexican market, according to Nielsen figures through March 23. The line includes family-pack burritos and chimichangas as well as chicken and steak flour taquitos. The company is also reintroducing its entire Taquito line, converting it from the existing bag to a more convenient box. The flavors include: chicken and cheese flour, steak and cheese flour, beef steak corn and chicken corn. Tandoor Chef has added to its line of pizzas with the Jalapeño Naan Pizza. “With the success of our other four varieties, we wanted to introduce a spicier flavor profile to consumers while still continuing the familiarity of pizza,” says Ryan. “There are traditional offerings such as margherita and cilantro pesto and with the jalapeño product we are eager to bring in additional consumers searching for a frozen pizza that addresses their spicier palate. Additionally, we recently introduced Malai Kofta, a delicious and savory vegetarian entrée in a rich, mildly spiced sauce."