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Merchandising a wide array of global foods can be challenging because of limited shelf space.

Demographic changes enhance demand for global foods

Growing Hispanic and Asian shopper segments are helping to boost category revenue growth

An increasingly diverse U.S. shopper base is creating opportunities — and obstacles — for supermarkets seeking to cash in on the greater interest in global foods.

The growing array of multicultural consumers is helping to fuel stronger center-store global foods activity, with ethnic aisle sales totaling $8.27 billion for the 52 weeks ending June 18, up 13.1% from the year-earlier period and nearly double the 6.8% increase for total store sales, reports Circana, a Chicago-based market research firm. Unit sales reached 2.7 billion, down 0.7%, but significantly below the total store sales decline of 3.2%. Ethnic aisle sales comprised 0.7% of total store sales.

Dollar sales of Mexican foods totaled $4.35 billion, a 16% increase from the year-earlier period with unit sales of 1.44 billion, a 0.7% gain. Asian food revenues reached $1.62 billion, a 14.1% increase, with unit sales of 578 million, up 0.2%.

“The explosive growth of multicultural populations is continuously transforming food culture and the American taste palate,” said Victor Paredes, executive director of cultural strategy at the Collage Group, a Bethesda, Md.-based consumer research firm. “Global foods are expanding in the center aisles of supermarkets and pushing out beyond the ethnic food aisle.”

The increase in revenues is partly due to an increase in multicultural consumers seeking out foods and brands that help connect and preserve their cultures, as well as a greater expectation for supermarkets to carry their preferred selections, he said. Eighty-seven percent of Hispanic Americans in a Collage Group survey, for instance, indicated that preparing meals from their culture is an important way to maintain traditions, compared to 61% of non-Hispanics.

To meet such interests, retailers should analyze the shopper demographics and behaviors in each store when choosing the appropriate global foods to merchandise, said Andrew Criezis, senior vice president and general manager, global SMB, for New York-based consumer intelligence company NielsenIQ. That includes age, ethnicity, income, habits, preferences, and dietary restrictions, along with detailed information from a representative sample of consumers over time to gain insights into purchase patterns and product feedback, he said.

Offering global selections that meet the expanding consumer interest in health and wellness is also essential, Paredes said, noting that Collage Group research found that more than half of multicultural Americans often or always make a special effort to purchase food made with high-quality ingredients and which provide excellent nutritional benefits.

Other important sales triggers include products with authentic ingredients, and store signage that communicates product information in the shoppers’ native language, he said, noting, for instance, that 30% of Hispanics prefer to go to stores that have signs in Spanish.

Studying the popular foodservice selections in each area can better enable operators to determine the pertinent global foods to offer as well, said Scott Love, Circana senior vice president of retail client service.

For greater product visibility, supermarkets should situate selections in a designated global or ethnic section on store shelves, he said, while also providing all the ingredients for a given dish rather than “a partial meal solution.”

Ensuring that shoppers are aware of the global foods and can easily locate selections in-store and online is vital, said Kathleen Blum, vice president of shopper insights for Chicago-based C + R Research. Supermarkets can address such issues through advertising and in-store signage and displays, while leveraging shopping apps and retail websites to further highlight new offerings, she said.

Yet, merchandising a wide array of global foods can be challenging because of limited shelf space, Blum said. “Focusing on shopper insights and category management is important in order to know which products to showcase in-store and how e-commerce can be used to build upon the in-store assortment as needed,” she said.

Nevertheless, more supermarkets are expanding their global food offerings in the center aisles as they become aware of community diversity, cultural nuances, and the buying power of multicultural shoppers, said Ahmad Barber, chief creative officer and managing partner of Bold Culture, a Brooklyn, N.Y.-based multicultural marketing and consulting firm.

“Acknowledging this diversity requires action,” he said. “America’s fabric is made up of ethnic and global people and the foods they desire must be available.”

Spurring additional activity from another potent buyer group — the non-ethnic or non-multicultural shopper — however, remains a significant challenge, Criezis said. “Some consumers may be hesitant to explore unfamiliar products due to lack of exposure or knowledge,” he said. “Retailers need to create awareness and educate consumers.”

Measures can include offering cooking tips, recipe suggestions, and competitive pricing to encourage purchasing, while ensuring there is a diverse range of global selections, he said.

“Retailers should go beyond targeting only ethnic or multicultural consumers when promoting global foods,” Criezis said. “They can attract a wider audience by broadening the marketing efforts and showcasing the unique flavors, ingredients, and benefits of these products.”

Operators also must have the necessary category knowledge and cultural awareness if they are to offer the most appropriate global foods, Barber said, noting that such selections “may not be within the supermarket owner’s immediate network, which makes it difficult to source or import the best quality.” 

In response, retailers should team with global food suppliers and other partners that can provide sourcing support.

Moving forward, factors like globalization, the drive for authentic and mission-based foods, the scientific validation of health benefits, and recognition of the value of diversity in food will spur greater shopper interest in global selections, Criezis said.

Demand will further increase as more consumers experience new cultures, Barber said, adding that global foods “will continue to be used in traditional and innovative ways by the new cultures exposed to them.”


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