In the $75 billion-dollar specialty foods market, forecast to grow by 50% over the next decade while other food sectors remain relatively flat, an insightful new report has just been released. And for food and beverage companies, there’s A LOT to like about it.
Today’s Specialty Food Consumer 2008, developed by the National Association for the Specialty Food Trade (NASFT) and Mintel International, cites that 56% of American consumers are currently purchasing specialty foods and beverages—offerings the report defines as “distinctive” in taste, such as premium and ethnic products.
With the average specialty foods consumer now spending $115.50 weekly (an 8% increase from 2006 figures) and allocating nearly 23% of their food dollars for specialty products, the findings illuminate a set of lucrative new trends, including:
Youth Segment Drives Demand
The report found that people between 18 and 34 are the most likely buyers of specialty foods. While head-of-household mothers are a prime target for food retailers (and are well represented in this age demographic), brand managers have long held the youth demographic of 18-24 as the “holy grail” of markets for building brand loyalty.
Moreover, the youth market is especially primed to become “brand evangelists” who discuss new food preferences over the water cooler at work as well as through “online water coolers” like blogs, social networks and Twitter. This pays brands back in spades since this market can act as a veritable sales force.
Americans Want New Tastes… But Tradition Runs Deep
A key finding from respondents was that 86% of specialty foods consumers like to experiment with new recipes; yet 80% said that family food traditions are important to them (with nearly 25% of purchases being imported brands).
This is consistent with the key premise of Salad Bowl Branding that consumers who adopt the traits of American culture do not lose the ties to their heritages, but keep them very much alive through their foods. Moreover, both of these figures signal huge opportunities for brands that leverage innovation as well as those that honor tradition.
Home-based Foods Purchasing On the Upswing
The report also cites that 6 out of 10 specialty food purchases by consumers are for “everyday meals at home.” Combine that with a weak economy pressing consumers to return to home-based food preparation that is 2/3 less costly than dining out–and we see consumers yearning for more variety that they can create at home.
And while respondents noted “taste and quality” have the most influence on their specialty foods purchases, consumers are no doubt also looking for competitively priced products, too.
So, what does this mean for YOUR brand’s packaging strategy?
In short, specialty foods have achieved mainstream status. No longer only bought by cultural and ethnic markets, specialty offerings are now purchased, adopted and anticipated by wide-spanning segments. In fact, according to Agri-Food, 75% of the sales generated by ethnic foods already come from mainstream customers.
What these new set of statistics prove is just how vast the opportunities are—in nearly every cultural origin and at nearly every price point—with innovative and traditional food offerings alike. And when we couple these figures with the explosive growth in America’s populations, we find that there’s never been a stronger time for specialty foods and beverages companies to make their mark.
Yet in the average supermarket, housing between 40,000 and 50,000 brands, packaging is your single best shot at grabbing this market’s hearts, minds and market share. But branding doesn’t take luck, it takes a thoughtful strategy.
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.
Looking back at history we now realize that America's various ethnic groups have not evolved
into the great "melting pot" that we learned of as early as our grade school years.Instead of one unified culture, America is a rich mix of many cultural groups.
These market segments share a common bond through their set of
values — like freedom, equality and prosperity — but remain separated by
their diverse heritages.
Just as they have not assimilated, neither
have their brand preferences, with food representing a key way to honor
their history and maintain their cultural identities.
Watch our short video and see how the nation more aptly resembles a "salad bowl" of diverse cultural influences (or distinct
"ingredients") that complement one another without losing their core
flavors.
In fact, our different heritages not only make this country unique — they make America the lively, diverse and passionate nation that it is, with citizens forever open to new ideas, ways, styles and products. And we're a nation open to new trends and new tastes — as proven by the many cultural markets that not only influence the
trends and tastes of their own cultural groups, but of many other
groups, as well as mainstream audiences.
With a new set of influential "tastemakers" to
serve, marketers must do their homework so as to reap the potential
rewards. This is the foundation of what we call "Salad Bowl Branding." In this age it's the savviest, not necessarily the strongest, of specialty foods companies that will win… and in this age, daring to be different signals far less risk than remaining the same.
Covering these dynamic markets — and the unprecedented opportunities for today's marketers of specialty foods and beverages — is why we've launched this "Salad Bowl Branding" blog.
We look forward to sharing our opinions, getting your feedback, engaging in dialog and bringing you the most recent statistics, forecasts and developments in this ever-changing and always exciting industry.
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.
[Source: US Census Bureau March 2002] This report presents data on the demographic, social, and economic characteristics of the Black population in the United States, based on the Annual Demographic Supplement to the March 2002 Current Population Survey (CPS). The topics covered are geographic distribution; age, sex, and marital status distribution; family type and family size; educational attainment; labor force participation and unemployment; occupation; family income; and poverty status. Data for these characteristics are compared with those of the non-Hispanic White population.
GEOGRAPHIC DISTRIBUTION
Blacks continue to be concentrated in the South.
In March 2002, 36.0 million people in the United States, or 13 percent of the civilian non-institutionalized population, were Black. The majority of Blacks lived in the South (55 percent), a similar proportion (18 percent) lived in the Northeast and the Midwest, and 9 percent lived in the West.Blackregions
Over one-half (52 percent) of all Blacks lived in a central city within a metropolitan area, compared with 21 percent of non-Hispanic Whites. In contrast, 57 percent of non-Hispanic Whites lived outside the central city but within the metropolitan area, compared with 36 percent of Blacks. Only 13 percent of Blacks and 22 percent of non-Hispanic Whites lived in non-metropolitan areas.
AGE, SEX, AND MARITAL STATUS DISTRIBUTION
The Black population is younger than the non-Hispanic White population.
In 2002, 33 percent of all Blacks were under 18, compared with 23 percent of non-Hispanic Whites. Only 8 percent of Blacks were 65 and older, compared with 14 percent of non-Hispanic Whites.
A larger proportion of Black males than non-Hispanic White males were under 18 (36 percent compared with 24 percent). In contrast, 7 percent of Black males and 12 percent of non-Hispanic White males were 65 and over. A greater percentage of Black females (30 percent) than non-Hispanic White females (22 percent) were under age 18, while 9 percent of Black females and 16 percent of non-Hispanic White females were 65 and over.
Blacks are less likely to be married than non-Hispanic Whites.
Among the 26.2 million Blacks and the 158.3 million non-Hispanic Whites 15 and older, 10 percent of each were divorced and about 6 percent of each were widowed, but 43 percent of Blacks had never married, compared with 25 percent of non-Hispanic Whites. Blacks were less likely than their non-Hispanic White counterparts to be currently married (35 percent and 57 percent, respectively).
The marital distributions of Blacks and non-Hispanic Whites varied by sex. In 2002, in both groups, women were more likely than men to be widowed, separated, or divorced, and less likely to be never married or currently married. Black men were more likely than their non-Hispanic White counterparts to be never married: 45 percent and 28 percent, respectively. The comparable figures for women were 42 percent and 21 percent.
FAMILY TYPE AND FAMILY SIZE
Fewer Black families are married-couple families.
In 2002, there were 8.8 million Black families and 53.6 million non-Hispanic White families in the United States. Nearly 43 percent of Black families were maintained by women with no spouse present, and 9 percent were maintained by Black men with no spouse present.
EDUCATIONAL ATTAINMENT
More Black women than Black men aged 25 and over have earned at least a bachelor’s degree.
Of the 20.4 million Blacks and 133. 4 million non-Hispanic Whites 25 and older, a lower percentage of Blacks had earned at least a high school diploma (79 percent and 89 percent, respectively). The proportion of all non-Hispanic Whites with at least a bachelor’s degree (29 percent) was higher than that of all Blacks (17 percent).Blackeducation
More Black women than Black men had earned at least a bachelor’s degree (18 percent compared with 16 percent, while among non-Hispanic Whites, a higher proportion of men than women had earned at least a bachelor’s degree (32 percent and 27 percent, respectively).
LABOR FORCE PARTICIPATION AND UNEMPLOYMENT
Blacks participate in the labor force at a lower rate than non-Hispanic Whites.
Among the 216.8 million members of the civilian population aged 16 and over in 2002, 25.4 million (12 percent) were Black and
155.1 million (72 percent) were non-Hispanic White. Non-Hispanic White men had a higher civilian labor force participation rate than Black men (73 percent compared with 68 percent), and for both groups, men had higher rates than women.9 However, the rate for Black women (62 percent) was higher than that for non-Hispanic White women (60 percent).
Unemployment is higher among Blacks than non-Hispanic Whites.
In March 2002, the unemployment rate for Blacks was twice that for non-Hispanic Whites (11 percent and 5 percent, respectively). This finding was consistent for both men (12 percent compared with 6 percent) and women (10 percent compared with 4 percent).
POVERTY STATUS
Blacks accounted for about one quarter of the population in poverty in 2001.
An estimated 8.1 million Blacks lived below the poverty level in 2001. The poverty rate, which was 12 percent for the total population, was 23 percent for Blacks and 8 percent for non-Hispanic Whites. Among all children under age 18, the poverty rate was 16 percent, but it was three times as high for Black children (30 percent) as for non-Hispanic White children (10 percent).
Blackpoverty About 10 percent of all men were below the official poverty line in 2001, but the rate for Black men (20 percent) was nearly three times that for non-Hispanic White men (7 percent). Among men 65 and over, the rate for Blacks was three times as high (16 percent) as the rate for non-Hispanic Whites (5 percent). In 2001, the poverty rate for Black women (25 percent) was more than twice that for non-Hispanic White women (9 percent); for women 65 and older, the rates were 26 percent and 10 percent,respectively.
Families maintained by women with no spouse present have higher poverty rates overall.
In 2001, 1.8 million Black families and 3.1 million were non-Hispanic White. However, a greater percentage of Black families than of non-Hispanic White families were poor: 21 percent compared with 6 percent. A larger proportion of Black married-couple families (8 percent) than of non-Hispanic White families (3 percent) were poor. Poverty was highest in families maintained by women with no spouse present: 35 percent for Black families compared with 19 percent for non-Hispanic White families. Black families maintained by men with no spouse present were more likely to live in poverty (19 percent) than comparable non-Hispanic White families (10 percent).
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.
In the case you want more information, our article on how these demographic shifts set specialty foods ablaze is right here.
Just a little walk in the city of New York or Chicago, for
example,
would make any foreigner realize the presence of people of various
races
walking down the street: probably Caucasians, blacks, Hispanics,
African
Americans, Hispanics, Asians, and so on. Or for another example, on
school
campuses in America, both the faculty and the student body are usually
composed
of people from a number of countries rather than only one. Almost
anywhere in
America, the possibility is encountering a mix of people. Thus, America
is a
land of plural races and ethnicities, with a multicultural context.
Indeed, the variety of ethnicities in America is often claimed
to be the
best mix in the world. Leonard Dinnerstein and David M. Reimers
introduce their
book, Ethnic Americans: A History of Immigration and Assimilation,
by
stating, “Never before – and in no other country – have as many varied
ethnic
groups congregated and amalgamated as they have in the United States” . With
such reputation, here is exactly where the famous term “melting pot”
arises.
This conception has traditionally been perceived as the best expression
to
describe the multi-ethnicity of America. Its basic idea presents the
whole
nation as one large pot. Anyone who enters the United States is
automatically
thrown into this “pot” where, for the following years, a process of
assimilation into the American belief systems is taken place. All
the cultural
aspects that one brings into are blended together, or melted, to form a
new
culture. The outcome of this massive procedure is the “melted” version
of a
culture, which is described as characteristically “American.” It is
notable
that in this assimilation, the identities of each original culture are
extinguished to bring out a complete new mixture.
Along
with this perspective, however, there is another expression
that describes the diversity of people in America. It tends to be
interpreted
in the same way as the “melting pot,” but actually has a slightly
different
meaning with a different way of approaching and explaining American
society. In
comparison with the “melting pot” theory, there is the “salad bowl”
theory. This idea demonstrates a complete separate perspective that the
newcomers bring
different cultures, where each of these cultures is kept as an
essential part
to make up the whole. Every distinctive culture or belief is considered
to be
one of the tastes or ingredients that contributes in forming the whole;
therefore its original shape and characteristics are maintained.
Whether to apply the term “melting pot” or the term “salad bowl”
to the
American multiethnic conditions brings about a large discussion and
controversy. In a way, both serve as an effective and successful
metaphor,
despite their slight difference. Anyone who is accustomed to an
extremely
homogeneous society would be simply astonished after recognizing many
faces
with different physical features in America, and might praise the
country by
employing those two terms in topic. The ideas of the “melting pot” and
the “salad
bowl” in America both connote somewhat of an ideal to many people and
are often
admired. Having a close look at the reality of the country, such as the
existing ethnic segregation, the fact of the white population fleeing
away from
the minority poverty, and the trend of the minority group forming an
enclave,
however, one can see that the “melting pot” theory is merely a myth,
and
despite its long fame, it is rather more suitable to label America as a
“salad
bowl.”
Camarota,
Steven A. “Immigrants in the United
States – 2000.” Spectrum 74(2): 1-5.
Chock,
Phyllis Pease. “The Landscape of
Enchantment: Redaction in a Theory of Ethnicity.” Cultural
Anthropology
4(2): 163-181.
Dinnerstein,
Leonard and David M. Reimers. Ethnic
Americans: A History of Immigration and Assimilation. New York:
Dodd, Mead
& Company, 1975.
Glazer,
Nathan. “American Diversity and the 2000
Census.” Public Interest 144(Summer 2001): 3-18.
Glazer,
Nathan and Daniel Patrick Moynihan. Beyond
the Melting Pot, Second Edition. Cambridge, London: The M.I.T.
Press, 1970.
Harrigan
John J. and Ronald K. Vogel. Political
Change in the Metropolis. New York: Longman, 2003.
Moffat,
Michael. “The Discourse of The Dorm:
Race, Friendship, and “Culture” among College Youth.” Symbolizing
America.
Ed. Herve Verrene. Nebraska: University of
Nebraska Press, 1986.
Morganthau,
Tom. “America: Still a Melting Pot?” Newsweek 9 Aug. 2003: 16-25.
Robinson,
Linda. “America’s New Melting Pot.” U.S.
News & World Report 120(29 Apr. 1996): 30-35.
Rosaldo,
Renato. “Cultural Citizenship and
Educational Democracy.” Cultural Anthropology 9(3): 402-411.
Singer,
Milton. “The Melting Pot: Symbolic
Ritual or Total Social Fact?” Symbolizing America. Ed. Herve
Verrene.
Nebraska: University of Nebraska Press, 1986.
Spiro,
Melford. “The Acculturation of American
Ethnic Groups.” American Anthropologist 57(6): 1240-1252.
“Stirring
the Melting Pot.” U.S. News &
World Report 119(11 September 1995): 8.
“The
Melting Pot Survives.” The Economist
352(3 Jul. 1999): 24.
White,
Shane. “A Question of Style: Blacks in
and around New York City in the Late 18th Century.” The Journal of
American
Folklore 102(403): 23-44.
By now, all Americans are aware of the stunning 2000 Census data citing that minorities—groups spanning Hispanics, African-Americans and Asians—currently represent 1 in 3 Americans and will grow to constitute 50% of the U.S. population by 2050.
But what many companies may not yet know is that in much of the country these forecasts are already a reality… 4 decades ahead of schedule.
Recent Census data heralds that a new “majority-minority” has arrived in 1 out of every 10 of the nation’s 3,000+ counties. In other words, 303 of the nation’s counties already have more than 50% minority-status residents, with cities like Los Angeles already totaling over 70%.
In explaining the sheer gravity of these shifts, Census Bureau Director Louis Kincannon drew this comparison, “To put this into perspective, there are more minorities in this country today than there were people in the United States in 1910. In fact, the minority population in the U.S. is larger than the total population of all but 11 countries.”
Indeed, markets are changing at remarkable clips, and well ahead of
schedule. As brands struggle in this economy, the good news is that the
cultural markets that are sweeping the nation are opening a host of new
opportunities for today’s food and beverage marketers.
Just look at the
other trends fueling more demand for specialty and ethnic offerings…
For over 100 years the Ferrara brand restaurant/store in New York City’s Little Italy has been an icon offering pastries and imported confections.The store did so well that it began packaging and marketing many of its products outside to a broad market.
As the brand grew it had a very unorganized identity because so many different people influenced it over the years. Finally, a new sales distributor company purchased the brand and began to unify the image into a cohesive brand and set a solid marketing direction.
Italian specialty foods have been an influence on main stream consumer tastemakers for years. Internal brand research showed that the brand was known primarily as a confectionery brand but it did not have a very competitive identity. Poor photography, confusing logo, and uneven print quality contributed to the low cost identity.
The Problem
Ferrara Before
Other brands of lesser quality looked more upscale and had better shelf impact. Line was old looking and lacked appetite appeal. Stock or poor photography detracted taste perceptions. Hard to read type with busy graphics – standard fare for production artists. Sales were down and front line brokers and buyers were unmotivated with line.
The solution
It was decided by management and supported by consumer research that the brand needed to compete at a higher level for to gain buyer and consumer attention. It was determined that the brand name had significant recognition but the packaging was not taking advantage of this benefit
Ferrara After
The brand packaging design agency, Arcanna was hired to enhance the value of the product line by strengthening the brand name on the packages.
A new logo was created, new product photography was taken and a complete new packaging identity using appealing bright blue colors with a subtle motif in the background to add to the upscale value of the brand.
The brand now is positioned to appeal to those consumers looking for a high quality imported Italian specialty product. The shelf impact has been greatly improved and brand name significantly strengthened.
“It’s just what the brand needed, a new look, and an upscale identity for a quality imported product. Consumers now recognize the brand and our sales force is positive and confident when they market the Ferrara brand.” Rick Ciccotelli, President, AlanRic Distributors.
Offering an extensive line of sauces, seasonings, beans and shells, el Rio’s product line needed to be upgraded in order to reflect the company’s strategic initiatives to improve quality and provide “all natural appeal” due to newly added ingredients.
At the same time, the product line needed to be positioned more aggressively against challenger brands–like Old El Paso and Ortega—that were winning the lion’s share of mainstream dollars.
Findings and challenges:
Through internal brand research, Arcanna found the el Rio brand lacked any efforts at pushing the product through the sales cycle, with a tired look, lack of marketing programs and promotional budget resulting in flat sales. Further, the brand was suffering from a limited following and mainly being purchased by consumers looking for an inexpensive product not an appealing brand.
Most importantly, with Spanish foods a now-favorite and frequent purchase by mainstream audiences, el Rio management was not taking advantage of the dramatic increase in demand for ethnic foods by mainstream audiences. Solutions:
Reinvigorating brand image. The brand name el Rio (which translates to “the river” in Spanish) was featured more prominently on all product packaging to improve its recognition to consumers. Additionally, a new brand logo was created to reflect the name’s meaning with the use of warm colors to enhance the Southwestern appeal, and improve perception of the product line’s quality.
Marketing the end-product benefit. The goal was to expand the audience and increase sales to consumers by making the category item more “appetite appealing” by developing a brand package that placed focus on the delicious end-product dishes that the products are pivotal in creating. Therefore, emphasis was placed on product photography and imagery than product name.
Positioning product as inexpensive but still appealing to variety.el Rio has been repositioned to target mainstream audiences with ever-expanding interests in Spanish products who are open to trying alternative brands due to their curiosity in ethnic offerings, desire for more variety in their diet and the product delivering quality at a reasonable price point.
Note: image at top left reflects brand packaging before brand and positioning enhancements, with image at center right reflecting work done by Arcanna.
———————————————————————————-
Moreover, the youth market is especially primed to become “brand evangelists” who discuss new food preferences over the water cooler at work as well as through “online water coolers” like blogs, social networks and Twitter. This pays brands back in spades since this market can act as a veritable sales force.
What these new set of statistics prove is just how vast the opportunities are—in nearly every cultural origin and at nearly every price point—with innovative and traditional food offerings alike. And when we couple these figures with the explosive growth in America’s populations, we find that there’s never been a stronger time for specialty foods and beverages companies to make their mark.
