What is Salad Bowl Branding? Briefings on America's shifting markets, changing tastes and growth opportunities in the foods and beverages sector.
|
Over the next decade alone the demand for authentic ethnic specialty foods is slated to increase by a staggering 50%.
Today’s opportunities reside in creating brands that are tailored to the intricate tastes of cultural segments, not mass audiences. Understanding the nuances of these emerging trends can help brand managers employ methods to capitalize on them.
Salad Bowl Branding was created to share positioning insight, discuss clever marketing strategies and to report on the facts and figures shaping America’s new cultural tastemakers. We hope our food and beverage insights will be useful for developing a more effective product positioning strategy.
 At Salad Bowl Branding we keep looking for the next food trend on the menu. While we see patterns emerging in the Mexican, Indian and Asian, there is a new flavor capturing America’s tastemakers, Moroccan.
As dining out for ethnic foods is slowly improving, we are noticing that food outlets who provide more exotic products and restaurants with more adventurous menus are showing strong growth, especially with young adults who have become the most adventurous in trying global cuisines.
This market often identify themselves as ‘cooking enthusiasts’ and are eager to experiment with new recipes, tastes and flavors – stirring the demand for what was once considered exotic specialty foods.
While this niche market may be small, they are also more affluent and are spending more on healthy foods both in the supermarket and in home meal preparation, which continues to be a strong economic trend.
According to a report in PR Newswire, “Young adults are driving the interest in ethnic foods in the USA and their adventurous eating is introducing foods from around the world to their family and friends”.
Even in a recovering economy, ethnic foods set a record at $2.2 billion in sales {see NASFT State of Industry Report}. While Indian and Asian foods continue their rapid growth, expect to see interest in the African and South American international foods category to grow as well.
Rich spiced sauces in Indian and Thai foods are winning consumers’ palates. Moroccan cuisine, which compliments this category nicely, is sure to be one of the hotest exotic culinary experiences in the coming months.
 There is a new cultural identity emerging that represents almost 26% of the entire US Hispanic market, the Nueva Latina. With a market size of about 4 million, this new sub-segment differs from the traditional and/or non-assimilated Hispanic woman.
While this group often embody qualities and personality characteristics that can be considered docile, compliant and unassertive in a traditional Hispanic society, they are changing rapidly and making new demands on the specialty food and beverage sector.
Still maintaining the characteristics of their Latina culture, the Nueva Latina is adopting many American cultural values such as being more self-reliant, impervious and driven – and more likely defines herself as being from a blended culture.
Considered as a second-generation Hispanic who is an educated career woman, she is open to change, yet still prefers to to communicate in Spanish (45%) vs English (31%), according to a recent MediaPost article. However, her media consumption skews towards English and other content that is culturally relevant, such as her food choices and lifestyle.
The challenge for specialty food and beverage brand marketers is how to attract this dynamic new audience. While it is clear that having a deep understanding of her culture can help, uncovering her needs, desires and wants through research is the best way to connect to her purchasing behavior. Benefit Testing and other methods to evaluate consumers have been instrumental in gaining market share from this new Hispanic sub-group.
As brands change based on the cultural demands of niche segments, the Nueva Latina is a driving force in the market today.
To reduce risk to market, savvy ethnic and specialty food importers need to gain an understanding of the different information gathering tools that are helpful in determining consumer wants, needs and desires to help them develop more effective brand packaging strategies.
Quite honestly, many specialty food companies test their packaging in the aisle. They go with their gut, create a marketable product, leap into stocking fees and pray that the product sells. Now for a start up that may be a bit insane. Especially with the cost of shelf space, how quickly a store pulls under-performing items, and the sheer volume of competitors these days. But for established companies like Cento, Victoria, World Finer and Pastene, they have learned how to make calculated risks good business.
Case studies are fascinating. Especially in packaging. In my recent seminar at the Fancy Food Show I shared the stories behind some of the brands you may already know, analyzed the challenges they faced, discussed the research that was conducted and reviewed the results of their brand packaging strategies. For example, take Bellino, a line that got lost over years of tweaking by different vendors. Bland photography was used across the entire line and the only consistent identifying thing was the gold background. Testing revealed that consumers thought the product was dated and that the contents weren’t fresh. Which was really a shame, because they imported some of the best quality items I’ve ever tasted. Consumers also couldn’t recall the brand name, even after 10 minutes.
 Their packaging strategy included adding a “Product of Italy” phrase across the entire line to justify a higher price point. New product photography was the heart behind this redesign. Food stylists experienced in confectionary items were brought in to add decadence and sophistication to the shots. The old typeface was replaced with a prominent brand logo using a stylized version of the original ribbon. The gold background was maintained and foil stamping and varnishes helped the package shine on the shelf. Sales grew exponentially.
Now I’m not saying with research you can become the next Whole Foods leader. But with research you can make the opportunity to achieve that goal more likely. To that end, here are the seven ways to help evaluate your products branding and packaging:
- Benefit testing
- Focus groups
- Package testing
- Online surveys
- Consumer intercepts
- Research tools
- Social media
Using all or some of these help us to uncover the “AS IS” – where the brand is at right now. I have used some of these tools more than others due to the often tight budgets of the ethnic and specialty foods industry. But each one is a proven research methods that either myself or my colleagues have managed.
If you would like to learn more about each method, drop me a note or download the presentation outline.
 Ready to move ahead with your business? Check out the Summer Fancy Food Show education programs for 2010.
Beginning on Friday, two days before the trade show floor opens, NASFT proudly offers 23 quality sessions including tours, a tasting, roundtables, two value-priced packages of sessions aimed at start-ups and specialty food entrepreneurs and our latest series called Bite Sized Classes.
With the NEW Bite Size Classes, you’ll be able to take up to two of these 45 minute classes before the show floor even opens on both Sunday and Monday!
In addition to all of this, you’ll find information here about our prestigious sofi™ Awards Ceremony on Monday night!
Please note that classes are not included in the price of an exhibitor/attendee badge. For questions on classes, please contact education@nasft.org
The specialty food industry struggled in 2009 but still grew by 2.7%* with much of that growth coming in the fourth quarter.
As a consumer packaged goods marketer I keep an eye on specialty food sales, from the local retailers through natural food stores and supermarkets. For over 20 years I have spent the majority of my time working on ways to help specialty food products sell.
The data I have analyzed reveals a culturally authentic industry that continues to grow despite a daunting global economic recession. In fact, sales of specialty foods last year topped $65 billion, commanding over 13 percent of retail food sales. That’s great news.
KnoorReadytoServe
Better yet, if you sell refrigerated sauces, salsas and dips, you were (and still are) in great demand. Even if you don’t sell Yogurt or Kefir, the fastest growing specialty foods category, the primary question all entrepreneurial brand owners still have to ask is “how do I make sure my product attracts the right buyer?”
That’s where I come in. And on June 26th, if you register for my seminar at the Fancy Food Show, you’ll gain that answer, learn a few tactics and uncover ways to help your products sell better too.
Want some more great news? Come see me at the show.
7 Ways to Evaluate Your Product’s Branding and Packaging to Respond to Changing Markets
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
 Fancy Food Show
Saturday, June 26
10:30 AM-12:00 PM
Javits Center, NYC
Register today
One day only!
[* State of the Specialty Food Industry 2010]
 Ethnic food sales will reach a record $2.2 billion this year, and advance by another 20% between 2010 and 2014 (Mintel).
Population growth has been growing steady for specialty foods since 2004, the global research supplier reports. Since 2005 more than 1 million foreigners have become permanent legal U.S. residents each year.
Mexican/Hispanic foods still dominate, holding a 62% of ethnic foods’ share. In fact, nearly six in 10 consumers now report that they cooked Mexican food within the past month. Clearly Hispanic foods have become so mainstream that they are “hardly considered ethnic anymore”.
Sushikid But the real growth-drivers in the Specialty Foods category are Asian and Indian foods, which showed 11% and 35% growth, respectively, between 2006 and 2008.
Wealth and youth are two of the strongest predictors of ethnic food cooking, with 92% of households with incomes of $150,000 or higher and 91% of consumers 18 to 24 reporting that they have engaged in such cooking within the past month.
Cooking shows, product innovations and more international travel have contributed to more Americans considering themselves cooking enthusiasts and experimenting with global cuisines and new foods/ flavors.
Two-thirds of respondents prefer to cook ethnic meals from scratch, but the remaining third prefer foods that require less time and preparation. Food manufacturers are encouraging the cooking trend by providing ethnic sauces and seasonings to add to home-prepared meats and vegetables, “or taking it a step further with meal solutions and pre-made meal kits,” notes MediaPost.
 If the industry needs more proof that specialty foods is THE sector of growth in food and beverage, validation can be found through the vast array of niches that the sector is penetrating. Be it low-cost convenience or high-end luxury, specialty foods are gaining steam…
According to Time Magazine (April 3, 2008) “The specialty-food sector is growing as pantry goods that used to be basic commodities are being repackaged as upscale luxuries. Even as some people worry about being able to put any kind of food on the table, the sales of specialty foods are up 17% over the past two years (compared with 4% for overall food sales).
‘The financial situation hasn’t hurt us,’ says Andy Arons, CEO of New York City’s Gourmet Garage stores. ‘I don’t think that people necessarily skimp on eating well in hard times. Maybe 10 years ago, splurging on food seemed foreign, but when you are in a world where people pay $4 a day for a Starbucks coffee, an expensive butter doesn’t seem that extravagant.’
On the other end of the scale, even low-end convenience stores are using specialty foods to entice more palates, and more profits. Even 7-Eleven is hip to the profit potential of such comestibles.
As Rocky Mountain News reports, “Even 7-Eleven is going local. The ubiquitous convenience store is cooking up specialty foods for Colorado palates – such items as carnitas pita sandwiches, beef and green chili burritos and sugar cinnamon twist pastries.
The regional creations were on display for the annual ‘University of 7-Eleven’ gathering at the Colorado Convention Center on Wednesday, a traveling food and beverage show that gives 750 store managers and franchisees a sneak peek of new products and services.
“When I came to Colorado, the first thing I heard people talk about was the green chili,” said Jason Yada, a fresh food manager with 7-Eleven. “We wanted to make our burritos really authentic.”
The Colorado specialties are the latest way for 7-Eleven, once known primarily as a pit stop for sodas and smokes, to continue to expand into fresh foods such as sandwiches, salads and fruits. The Dallas-based chain, which has 220 stores in Colorado, last year posted nearly $47 billion in sales. ‘What customers see at a grocery store, they want to see here,” said Raj Singh, merchandising manager for 7-Eleven, pointing to a 24-pack of bottled water.”
When foods migrate from restaurants to low-end convenience stores and high-end luxury stores, the question is not if they’ll continue to move mainstream–it’s how fast and furiously they’ll continue to do so.
An article in AdvertisingAge by Tommy Thompson sheds some much-needed light on today's cultural markets in the U.S–most especially on the fact that while they may be of the same ethnic backgrounds, that is where many of their similarities end.
But, as Thompson points out, many of today's marketers are the last to know. Arguing that targeting as large a group as the 45 million Hispanics currently in the U.S., he explains that profiles based solely– and far too simply –on benchmarks like "Hispanic Adults ages 18-49" doesn't adequately reflect these groups' wants, needs, views or preferences.
And while Thompson's piece focuses on the Hispanic market, with the surging growth rates across multiple cultures and ethnicities, his counsel provides a cautionary tale across all market segments.
According to Thompson:
"The reality is that the Hispanic consumer is not a homogeneous group and
therefore these types of broad statements won't work for most brands in
today's changing environment. In order to effectively connect with
today's Hispanic consumer, we must understand that there are
sub-segments united by common interests that make the whole. Let's say
there are niches within the niche.
There are in many ways vast differences between the
consumer of Mexican decent in San Antonio vs. one in Sacramento vs. one
in Dallas or one in New York (yes, there are Mexicans in New York).
Most importantly, there are differences in the strategies and tactics
that a brand should use to reach them and engage them.
The reality is there are many factors that our Hispanic consumers are exposed to that
shape who they are, what they like, what sports they play or watch,
what they consider entertainment, what brands they buy and the list
goes on, but you get the point.
Our job as marketers is to find the common thread that unites as many
consumers as possible so that we can be effective and efficient with
our client's dollars."
In this era of mass-market fragmentation, when marketers start digging deeper to better understand the various (and highly varied) new niches of consumers, their intelligence will pay off in both profits and competitive advantages. Innovating in specialty foods is an especially ripe opportunity due to two key reasons: first, it's clear these micro niches need to be better understood and, thusly, better served. And, second, specialty foods are not only being enjoyed by their niche of origin, but by mainstream audiences. Given that sales of specialty foods are up 17% over the last two years, compared with only 4% for overall food sales, we're already seeing success resulting from better targeting and branding.
Indeed markets are changing– as are the micro-markets within them –which begs the question for today's marketers…is your branding changing, too?
 An article from The Wall Street Journal (May 1st) titled Surge in U.S. Hispanic Population Driven by Births, Not Immigration, illuminates just how profoundly the U.S. demographic shifts that are currently taking place will forever change the nation — and the breakneck speeds at which those changes are occurring.
The 45.5 million Hispanics currently in the U.S. are up from 35.7 million in 2000, with the growth among Hispanics responsible for half of the U.S. population gains between 2000 and 2007. While that increase is nothing short of astronomical, what is most surprising is how it’s happened. According the article:
“Hispanics now account for more than 15% of the U.S. population, and their surge is largely the result of births among people already in the country–not immigration. In the 1990s, a flood of Hispanic immigrants explained most of the group’s population rise. That has changed in recent years. Between 2006 and 2007, about 62% of the increase in Hispanics came from births.”
Hispanic families tend to have more children, while white families are having less. But what is also increasing is Hispanics’ purchasing power. As the article states:
“Growth in spending by Hispanics is likely to outstrip that of the general population in coming years. Hispanics control more disposable income than any other minority group. The figure stands at $860 billion a year and is expected to hit $1.3 trillion by 2012, according to Jeffrey Humphreys, who monitors Hispanic demographic and economic trends at the University of Georgia’s Selig Center.
Between their numbers and disposable income, Hispanics are already a vital market for politicians and marketers. But these numbers point to how they’ll only become more so. And while Hispanics are quickly redefining mainstream America, they’re also fragmenting into many micro-niches who seek products that align with their cultural heritage as well as the country they now call home.
That only leaves the door open for more innovations across many industries including television programs, music, fashion and, most notably, specialty foods. After all, our markets are changing, so too must our branding. Watch a three-minute video by The Wall Street Journal on the Hispanic market’s dramatic growth and its implications.
 While news of the economic downturn is blazing the nation’s headlines the fact is, it’s only part of the current story. After all, the economy is not the only entity in America experiencing dramatic shifts.
With one-third of the U.S. population currently of minority status—a figure forecast to soar to half the population by 2050—a far larger story of change is occurring. And with sales of specialty foods rising 17 percent over the last two years (compared to only 4 percent of overall food growth), these long-term marketplace changes hold near-term implications for the specialty foods and beverages industry.
A look at many of the current trends tells the broader story—which includes opportunity, not just economic challenge:
- Purchasing power increases. Minority market segments are not only growing in size but in spending power—and that power is pegged to fervently rise by 30 percent, to $1.9 trillion, within only three years. These markets are essential to the overall economy, and a key driver within our own sector.
- The new “tastemakers” wield wide-ranging influence. With sales of specialty foods slated to grow by an astonishing 50 percent over the next decade, the real phenomenon is that 75% of sales generated for specialty foods are from mainstream customers, not the niche cultural segments originating the foods. Indeed, American palates are now influenced by an entirely new set of tastemakers.
- Home-based dining poised for growth. Consumers don’t stop eating during a downturn, but they do adjust where they have their meals. This is good news for food producers as home-based food preparation is undoubtedly poised for an upswing. Moreover, consumers will seek more variety in their home-based diets since they will not be frequenting specialty and ethnic restaurants at the rates of the past few years.
A Look Back Gives Future Insight
As history has proven time and again, the economy will turn back around–just as the stock market took some steps toward recovery this week. But as history has also taught us, the chance to gain a strong foothold into emerging markets is time-sensitive, too.
Opportunities with new markets of this magnitude—that are influencing the purchasing decisions of much larger markets—come and go quickly…which begs the ultimate question: In this economy, is your company’s growth strategy reactionary or truly visionary?
Want to sign-up for our bi-monthly Briefings?
Sent via email, the briefings cover America’s shifting markets, changing tastes and growth opportunities in the specialty foods and beverages sector. Just send us an email here to receive the briefings.
Want to learn more about Salad Bowl Branding: just go here
For market forecasts: please click here
|
|
