Competition among retailers heats up as consumers seek more diverse, ethnic products

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Consumer demand for products that are authentic and ethnic is not only prompting brand manufacturers to innovate it is also raising the competitive bar at retailers, according to industry experts.

Research from Nielsen found multicultural consumers drove 94% of the US population growth between 2000 and 2014, and within the next few decades they will dominate the country’s population.  In addition, these shoppers tend to buy groceries more often than mainstream shoppers and spend more – making them a demographic that many retailers are eager to court.

One way Canadian retailers, such as T&T, are doing this is by importing a greater variety of brands that first and second generation immigrants want from their homeland. In turn, the authenticity and uniqueness of these brands also is attracting mainstream consumers seeking more adventuresome products.

“What you find is it is cross-sectional. So, as much as it appeals to the Asians, as you go through the store, you see the unique brands, all the fresh seafood, you see items that you wouldn’t see any place else,” Joe Turner, a business development consultant with the Ontario Ministry of Agriculture & Rural Affairs, explained to FoodNavigator-USA at the grocery store T&T in Toronto, Canada.

He added this unique product portfolio also attracts a cross section of people because mainstream shoppers, in general, also are much more willing to experiment and they come to the store looking for authentic flavors and products.

Elevating the shopping experience attracts more diverse consumers

Retailers that target multicultural customers also are elevating the shopping experience to attract a larger consumer base.

Turner explained that 10-15 years ago many international stores were smaller, more tightly packed, tended to be darker and had lower standards for displays and cleanliness than mainstream or conventional stores. Now, however, they are larger, more well-lit, have newer assets and offer specialty services such as prepared foods and a broader selection of fresh foods.

“They have really upped their game,” to attract more affluent, diverse and mainstream shoppers, he added.

Conventional stores adjust to compete

Mainstream stores also are increasing their selection of ethnic foods and changing how they stock them to help increase the exposure of authentic brands to mainstream shoppers as well as drive foot traffic of multicultural consumers throughout the store in an effort to increase their basket size.

“Within each major retailer in Canada, some will have a dedicated ethnic section, and they will put it in-line or they will designate a separate section, but what we find more and more ow is it is integrated. So, if you have an authentic Mexican salsa, you would put that beside the Old El Paso,” Turner said.

He explained, “The thought process behind that is consumers are shopping all those aisles anyway, but there are other items they can pick and choose from. … So, I think that to integrate it, you get exposure to other items, but it gives also mainline shoppers exposure to those items too.”

In addition, he noted, the old-school method of partitioning off ethnic food in a certain aisle “kind of alienates that area as ethnic, and I don’t think we really want to do that. You know, it is all for one and one for all. … It makes sense.”

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