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One size does not fit all: marketers must dig deeper to connect with cultural markets

An article in AdvertisingAge by Tommy Thompson (April 22nd) 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?

America's Multiculturals: new market, new opportunities

An April 6th article in the New York Times illuminates the growth--and growing prominence--of America's multicultural markets (Americans that are of two or more races). While marketers have long demographically segmented according to one location, one age range and one set of race, that is quickly having to change.

Because our markets are changing.

According to the article: "Of the seven million Americans--approximately 3% of the population--who identified themselves as mixed-race in the 2000 census (the first in which it was possible to do so), nearly half were under the age of 18. Almost 5 percent of Californians now identify themselves as mixed-race; by comparison, fewer than 7 percent are African-American."

As the author points out, "Because we are trying to raise our daughter as bi-cultural, much in our family is up for grabs, from the food we eat — and what we say before and after eating it."

This is an exemplary opportunity for marketers to develop offerings that speak to the various heritages that these consumers identify with, as they certainly don't identify with just one (as previously assumed). There is already a solid trend afoot in fusion foods--the blending of flavors and ideas from different cultures and ethnicities to develop brand new dishes (e.g. Taco Pizza, Mango Green Tea), even new food categories (e.g. Tex-Mex, Pan-Asian).

The possibilities in serving these new markets? Between the levels of choice and authenticity that today's consumers are demanding, the innovations are near endless. Moreover, as foods that are of rooted in the histories of one culture continue to migrate to the palates of other cultures, and into the mainstream (see previous posts on that phenomenon here and here), the profit potential provides a solid business case for more experimentation. Not less.

That said, the first step will be for marketers to better understand these marketers and how to effectively market to them. Hitting home this point, Monique Tapie, communications director for Global Advertising Strategies, explained in a July 2007 Washington Post article, "Multicultural Marketing 101 does not understand such nuances, just as it does not understand the animus of many middle-class and upper-income blacks against advertising campaigns that seem to portray all black people as hip-hop artists or sports figures. It seems to think that all Asians are from Japan, China or Korea, and all Spanish-speaking people are from Mexico, and all Mexicans are alike.

Ethnic marketing is not a matter of cynically exploiting racial, ethnic, class or other differences for profit, it's simply a recognition that differences exist, that America is composed of many cultures and that if you plan to sell to those cultures, you'd better try to do a better job of understanding them."

Also, very much worth watching is this terrific video segment on today's multicultural youth, and how they're working to understand and communicate their rich and varied identities. Let's make it our job to listen to them--and leverage these opportunities to better serve them.

After all, today's dynamic changes in America's demographics are unprecedented and those specialty foods companies that ignore the demands of these rich and varied audiences will do so at the price of market share for many years ahead.

Non-Kosher Americans Bolster Kosher Sector

We've been covering the trends of Americans favoring more choice and a wider array of specialty foods from ethnic markets whose populations are growing. But it's also a trend in cultural populations with rates that are remaining stagnant.

Take the recent article in the New York Times covering the demand for Kosher foods, a market that is seeing astronomical growth...due to non-Jewish demand.

According to the piece: "Newark does not instantly evoke images of Kosher Central, but a warehouse district on the city’s outskirts has been the home of Manischewitz’s core production since it consolidated three plants into one in 2006. And all those seemingly nontraditional products reflect the way kosher food has become a growth area in a country whose Jewish population is more or less stagnant.

The company says there are now 86,000 kosher-certified products, the market is growing between 10 and 15 percent annually, and more than 14,000 new kosher products have been introduced in the United States and Canada over the last five years."

While those keeping Kosher are pleased with a wider variety, the irony is that the market's fastest-growing segment is non-Jews. Yet this irony is becoming less so, as the article explains: "If Americans increasingly want variety in food, why not more matzo ball soup and that Concord grape matzo (if not quite the gefilte fish) along with the Thai peanut sauce and Cajun wings?"

As Rabbi Yaakov Y. Horowitz notes, “People drink more Irish ale, they’re more likely to eat a chicken burrito. Why shouldn’t it spill over to kosher food as well?” Clearly, American palates want more variety and, just as the Rabbi explains, its spilling over into every type of specialty food.

Full article located here.

Markets are Changing...Is Your Branding? (video segment)

While we'll continue to provide written resources for readers on how markets are changing--and therefore, so too must U.S. specialty foods brands--we also want to provide information through a video experience. After all, just as new markets are forming, so too are these new media!

The following ten-minute presentation, which has been given at industry conferences and to brand marketers at their corporate offices, walks you through a primer of the unprecedented pace of demographic change in the U.S., and the unparalleled opportunities for new tastes and new brands.

More to the point, the information illuminates how market disruption fuels opportunity...which spurs innovation...and, ultimately, profits. RSS and email subscribers, please click through to the blog to view the presentation.

In the case you want more information, our article on how these demographic shifts set specialty foods ablaze is right here.

Whether luxury purchase or low-end convenience, specialty foods continue to gain steam

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 (April 10, 2008) 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.

For more validation on changing markets and the astronomical demand for specialty foods, please go here.

Image: courtesy of Time