ECONOMY CHANGES EATING HABITS

People don't stop eating during a recession.  Instead, they adjust what they eat and where they have their meals.  As a N.Y. branding and packaging agency that specializes in tracking trends in food purchasing preferences, it is quite visible to us here at Arcanna.

Home-based dining and food preparation is on an upswing, which can bode well for supermarkets and other food retailers.  It also has encouraging implications for makers of specialty foods, as people look to substitute the dining variety they would get from eating at ethnic restaurants with experimenting with new foods at home.

When it comes to food preferences, the U.S. isn't a melting pot and hasn't been for years. Instead, it's more like a salad bowl of diverse ethnicities, with ingredients that get tossed together but retain their individuality, influencing everything else.

The growing immigrant population has put new flavors and products on the map, from yellow rice to Wasabi Peas to San Marzano Tomatoes.  The mainstream American population, already familiar with concepts like Tex-Mex and Pan-Asian, have been eager to try them, to the extent that ethnic and specialty foods now account for one out of every seven grocery dollars, and 73 percent of consumers reported purchasing specialty foods in 2007, compared to 64 percent in 2006.

Despite price hikes in retail foods, the grocery store is still less expensive than eating in a restaurant.  Food marketers have helped to fuel the upswing in specialty food sales by getting recipes out via food magazines and on packaging, with ideas for using leftovers and how to increase serving sizes, as well as more creative ways to use packaged products with different seasonings and spices.

Even lower-end convenience stores are using specialty foods to entice more food purchases and bring more profits.  C-store chains are catering to local palates, with items ranging from carnitas pita sandwiches to beef and green chili burritos and sugar cinnamon twist pastries.

The Piscataway, N.J.-based makers of Buenos Dias, a line of imported bakery products, recently adjusted its packaging and positioning to appeal to the Spanish market but found that a majority of its sales were from mainstream consumers seeking authentic Spanish products.

Foodtown, a Woodbridge, N.J.-based chain of supermarkets in New Jersey, New York and Long Island, has been increasing its sales in basic staple commodity items such as cheese, pasta, eggs, coffee and peanut butter, not only because of price increases but because consumers are cooking more at home - as much as a 35% increase in home cooking. 

Private brand sales have increased and will continue to grow as consumers seek better cost value in their food purchase.  "The trend toward organic, prepared and natural products has slowed as shoppers become more price sensitive," said Foodtown Vice President of Center Stores Gus Lebiak.

As interest in and acceptance of ethnic foods by mainstream America will continue, we expect tough economic times will accelerate this trend.