The Multicultural Marketing Opportunity

by Susan Craig

The world is discovering what hot and spicy foods aficionados have known for a long time: great-tasting food comes from many cultures. The cuisine of dozens of regions is finding its way to an ever-growing market: from Korean to Cajun, from South African to southern New Mexican, people just can’t get enough of it. Most folks in the business of marketing ethnic foods are saying it’s a trend, not a fad, and most likely a keeper.

The rush to multicultural food has to do with the widening of horizons. People are traveling more, seeing more new products via television and the Internet, trying out recipes from a hugely growing list of ethnic cookbooks, and taking cooking classes in every cuisine imaginable including Mediterranean, Southeast Asian, Pacific Rim, Portuguese, Jamaican and Indian. People looking for healthful and convenient foods are finding that many of these foods fit the bill. Everyone’s jumping on this bandwagon: supermarkets, Big Brands, and the Mexican or Asian corner market. At the same time that mainstream consumers are gobbling up ethnic foods in record numbers, the populations of ethnic groups in the United States are growing rapidly, creating larger target markets for enterprising food developers and purveyors. The market research firm Packaged Facts, as quoted by the Associated Press, predicts that retail sales of ethnic foods in the U.S. may reach $383 million by 2001, up from $208.9 million in 1992.

Lewis Wu is a man who looks at his markets and knows what to do. Owner and president of Foodmart International in Jersey City, New Jersey, he turned a 138,000-square-foot building into a store serving the area’s three primary ethnicities of Hispanic, Asian and Caucasian. The market offers five aisles of Hispanic foods and seven aisles of Asian foods including Philippine, Korean, Taiwanese, Japanese and Cantonese, along with foods of Mexico and a number of South American countries.

"Within a ten-minute drive of the store is a large Hispanic and Philippine community. Fifty-five percent of my customers are Hispanic," says Wu. Yet he does not ignore his Asian customers. "If you go into a typical supermarket," he says, "you’ll find maybe a 12-foot Asian section. I have a sixty-four-foot soy sauce section, and sixty-four feet of Asian noodles. If we get frequent requests for products, we find those products and bring them in." Though a large portion of the store is given over to American foods, Wu says that non-ethnic consumers "walk the whole store, buying regularly throughout. People who love to cook love this store. Some are following recipes in cookbooks and are looking for every little thing."

Wu’s primary advertising vehicle is the distribution of door-to-door flyers to about 300,000 potential customers within a 10-mile radius of the store. Foodmart also is advertised on Hispanic and Asian radio and through newspaper inserts. Inside the store, customers expand their palates by means of demos, tastings and an eclectic deli menu. "This is a stable market, not a fad," says Wu.

The specialty of the 99 Ranch chain of ethnic supermarkets, based in Buena Park, California, is Asian food. The chain consists of twenty stores in direct ownership and five licensed stores doing over $200 million a year in sales, situated mostly in California. "Our primary customers are Asian," owner Roger Chen says, as the stores are located in areas with large Asian immigrant populations. He doesn’t see "much of a growing trend in Caucasian buying" in his stores at present, but he does believe that in ten years there will be a healthy mix of Asian and Western products that reflect the future mix of population.

Multicultural Buying Power

Chen points out that until fairly recently, traditional supermarkets did not cater greatly to Asian, or any other, markets. But today supermarkets recognize the buying power of multicultural markets. A study developed by New America Strategies Group and DemoGraph Corporation, as reported in the December 1998 American Demographics, found that expenditures in multicultural households exceeded those of Caucasian households in five areas including groceries.

The Hispanic market is of particular interest. Figures released by the Bureau of Labor Statistics (U.S. Department of Labor) project enormous gains in the U.S. Hispanic population. Thirty-seven percent of the nation’s population growth from 1995 to 2000 will be Hispanic, increasing to 44 percent between 2000-2020. In 1994-95, Hispanics spent 17.5 percent of their total budget on food, compared with 13.7 percent spent by non-Hispanics. A report by the Food Marketing Institute, Profile of the U.S. Hispanic Grocery Shopper, cites fifty U.S. markets with a minimum of 20,000 Hispanic households who have buying power of at least $500 million per year and a total buying power in 1998 of over $273 billion. Teresa A. Zubizarreta, in the July 1998 Gourmet News, lists that buying power at over $348 billion, adding that Hispanics spend $102.60 per week on groceries. Ninety-two percent of Hispanics, she says, prefer cooking at home, and more than 50 percent host guests or family members for meals at least once a week. Their penchant for cooking translates into a need for specialty products and ingredients.

In some areas, the rise of Asian and Southeast Asian populations has spurred a similar close look at buying power and food habits. Large cities in the U.S. like Los Angeles, San Francisco, Miami, Chicago and New York are some of the most viable areas for Hispanic or Asian populations. Ethnic growth is expected to remain primarily in urban areas, but certain pockets of ethnic growth can be found throughout the country. Urban areas are also home to the greatest concentration of Spanish-and Asian-language television viewing, which affords opportunities for advertising to ethnic markets. Cable and satellite television are the most successful, like cable station KMEX in Los Angeles (Spanish) or the satellite broadcasts via KTSF in San Francisco (Chinese).

With ethnic growth figures in mind, it’s easy to see why supermarkets would want to concentrate on this market. A company that has taken both traditional and creative approaches to the Hispanic market is Furr’s Supermarkets, Inc., a chain of seventy stores throughout New Mexico and Texas.

"We want to cater to our Hispanics," says Furr’s president Buzz Doyle. "We’re carrying more hot foods, peppers, cheeses. We’re trying to do a better job of sourcing the products, and we’ve begun to send our people out to shows such as a large trade show in Europe last fall. There are amazing numbers of products around the world, a very rich assortment." But Furr’s hasn’t stopped there. They’re going where the market is, and buying stores along the southern border of the state with their new La Feria division.

The original La Feria was started in 1938 by Macario Baca, father of current La Feria General Manager Adrian Baca who has leased his store to Furr’s. "It’s an old-fashioned type of grocery store that works today in this technical age," he says. "Furr’s is offering four stores with extensive lines of Hispanic products in addition to regular goods (two currently in operation). In our Anthony (Texas) La Feria we have a tortilleria that brings customers from as far away as twenty miles, where most groceries have a customer radius of one and a half to three miles."

Hooking the Adventuresome

Much activity in the ethnic foods marketing arena concerns the growth in "adventure" eating and cooking, more directly defined as people’s desire to try new and different tastes. San Luis Obispo, California, mail-order company Mo Hotta-Mo Betta turned this trend into an opportunity beginning in 1995.

"We have hundreds of ethnic provisions," says owner Tim Eidson. "We added them because there are so many hard-to-find ingredients that go with hot and spicy recipes." Currently the provisions represent about 5 percent of the total business.

So how do they decide what ingredients to offer?

"Originally we got out twenty Asian cookbooks and looked at the ingredients, went to the grocery store to see what was available and then put together those that were difficult to get," Eidson says. "Then we did the same for other categories. For example, for Caribbean cooking we offer burnt sugar, pepper sherry and sorrel." As the list of ingredients expanded, Mo Hotta-Mo Betta decided to limit the selections to really excellent basic ingredients like Mexican chipotle, pumpkins seeds, vanilla, or staple Indian ingredients.

Markets feed markets. "In the last few years, supermarkets are getting much better at this (selling ethnic foods), creating more competition," says Eidson. "Ten years ago you’d be hard-pressed to buy a good salsa in a grocery store; now you have a choice of ten. This is educating people about eating foods and so it helps our business."

The Adriana’s Caravan catalog takes the generous approach, as the 1,500 items that owner Rochelle Zabarkes maintains are the ingredients for every recipe in the world, for both the new and the experienced cook. "This movement is going to keep growing," she says. "Food magazines are distributed all over the world, educating the public. People are buying cookbooks." Cooking classes are gaining in popularity as well, creating a demand for the necessary ingredients. Though many specialty foods stores sell the products needed for the ethnic cuisine classes taught in their stores, most cooks prefer to shop on their own.

Zabarkes also offers catering, much of which is based on ethnic foods such as Jamaican, Indian, Thai, Moroccan and Chinese. "People are expanding their flavors," she says. "They eat ethnic food in restaurants and love it, and don’t want to be limited to what they can make at home. Ethnic caterers are THE big thing in the New York press right now." Rather than targeting the market directly, most of the Adriana’s Caravan advertising is based on press coverage.

As the ethnic foods field becomes more crowded with players, those players become more creative about both cuisines and markets. It’s all in finding a niche, which Sea Moe of Kalifornia has done. They sell to, among others, the gift basket industry, and lately they’re selling natural foods from South Africa. General manager Sean Randle says, "When we researched the market we found no typical African food, so we saw it as something unique and thought this condiment line would fill a niche in the gift basket industry. It’s been well-received by gift basket makers, corporate gifters, specialty stores, and mail-order people."

Sea Moe, started in 1992, has turned their eyes not only to Africa but also to Brazil, Thailand, Malaysia and China. Their "Africa Deli" products, which include mustards, flavored vinegars, salad dressing sauces, chile relishes and sauces, and salad and stir fry oils, are handmade by the Rainbow people of South Africa. These products are typical of the new ethnic foods, such as prepared sauces and dressings, that make adventuresome cooking easy for the home chef. "We feel these products from Africa will stay around, like Thai, Vietnamese and Indian curry foods," says Randle. "Everybody wants it because it’s really been made in Africa." Products are selling well in both African-American and Caucasian markets in Los Angeles, San Francisco, Chicago and cities on the east coast.

To Your Health...and Taste

The nutrition of many ethnic foods appeals to a health-conscious America, and to the consumer’s desire for non-chemically-prepared products. Because people see information regarding nutrition in magazine articles, books and cookbooks, product advertising, and on television and the Internet, they are smarter about diet today. Centuries-old diets of grains, vegetables, fruits, healthful plants, and foods of the sea form the basis of many ethnic food products. For example, faro, a grain long used in the Mediterranean, has been successfully introduced to the customers of Broder’s Cucina Italiana in Minneapolis. At the same time, an emphasis on low-fat cooking has led consumers to the spice rack, especially the hot spice rack, and to ethnic products based on substances hot and flavorful to the taste buds.

Health, convenience, taste, adventure, a longing for the foods of one’s native country, a burgeoning multicultural market--all of these are the cornerstones of the marketing of ethnic foods. Opportunity is ripe for the savvy food producer or marketer to pursue it successfully.

Susan Craig is an Albuquerque freelance writer and business consultant. In addition to writing regularly for Fiery Foods Magazine, she writes for a number of local, regional and national publications and publishes several business and trade guides each year.

Sources:

Adriana’s Caravan Rochelle Zabarkes, owner 409 Vanderbilt Street |Brooklyn, NY 11219 PH: (718) 436-8565; FAX: (718) 436-8565, #96 Email: adricara@aol.com Foodmart International Lewis Wu, president 100 14th Street Jersey City, NJ PH: (201) 656-6950; FAX: (201) 656-1895 No e-mail Furr’s Supermarkets, Inc. and La Feria Buzz Doyle, president (Furr's) Becky Kinney, Marketing 1730 Montaño Road NW Albuquerque, NM 87107 PH: (505) 344-6525   Adrian Baca, general manager, La Feria, Anthony, TX PH: (915) 886-2136

Mo Hotta-Mo Betta Tim Eidson, owner P.O. Box 4136 San Luis Obispo, CA 93403 PH: (800) 462-3220; FAX: (323) 938-5056 Email: motta@mohotta.com Sea Moe of Kalifornia |Sean Randle, general manager 8306 Wilshire Blvd. #1204 Beverly Hills, CA 90211 PH: (323) 954-7365; FAX: (323) 938-5056 Email: giftss@pacbell.net 99 Ranch Market Roger Chen, president 6281 Regio Avenue Buena Park, CA 90620 FAX: (714) 521-3366 Email: rogerchen@99Ranch.com

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