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Retailers Face a Multicultural Future

The future will be multicultural, impacting supermarket operations as well as retailers’ go-to-market strategies, said Terry Soto, who heads About Marketing Solutions, a consulting firm specializing in the U.S. Hispanic market, and a panelist during the SPEAKS presentation of Food Marketing Institute’s 2010 Show this week.

Soto’s vision of the future anticipates the next big shift in demographics. In 2042, it’s projected ethnic minorities will become the majority.

This will not only change the shopper base but also the workforce. In health care, it has the potential to further strain the system with many minorities falling in the uninsured and lower income brackets. It also presents a challenge to mainstream supermarkets attempting to capture greater share of ethnic shopper spending on health care products.

This was Thomas Tseng’s topic during a workshop on “Building Health and Wellness Through Ethnic Marketing Programs,” during FMI’s Health & Wellness program. Tseng is a principal and co-founder, New American Dimensions, a market research and consulting firm that specializes in understanding the ethnic market.

Understanding and connecting to the many subsegments of an ethnic group, particularly Asian Americans, is a big challenge for a mainstream supermarket chain, Tseng told FMI attendees.

He showed a slide of TS Emporium, a Los Angeles market that sells exotic herbs and medicinal cures such as star fish and deer antlers. Signs posted in English that most customers can’t read or choose to ignore are required to be displayed warning shoppers that Chinese herbs contain chemicals known to cause cancer or reproductive toxicity.

Tseng said the best way for mainstream food retailers to reach out to ethnic populations in the health and wellness field is obviously not to compete with such specialty retailers but to focus in a on what supermarkets do best.

“If supermarkets were to completely renovate their product assortments and formats to tailor completely to an ethnic consumer segment — competing with botanicas, herbal stores, and the like — they sacrifice something else.”

The challenge will be to maintain a delicate balance, he said.

The second generation is showing the fastest growth among ethnic populations. Acculturation is at work assimilating this group into the American way of life. However, most second generation members still cling to old family traditions. “Ethnic consumers continue to transfer through two worlds,” Tseng noted.