A Matter Of Sabor

Hispanic flavors lead the pack of global cuisines having a major impact in the States.

It's no secret that international food products and recipes are growing ever more popular with Americans, but one group of cultures in particular is proving a particular standout, by virtue of sheer numbers.

Hispanics now comprise 16 percent of the U.S. population, and the U.S. Census indicates the country's Hispanic population is expected to grow 34 percent by 2020, according to a recent study from The NPD Group. That naturally leads to the conclusion that this growth, coupled with Latinos' adherence to dining traditions, is beginning to influence overall U.S. consumption patterns.

"There's no doubt about it — Hispanics are a large and quickly growing group, and they will likely move the needle on national consumption trends over the next 10 years," says Darren Seifer, food and beverage industry analyst for Port Washington, N.Y.-based NPD, whose NET (National Eating Trends) Hispanic report plots in-home and away-from-home food and beverage consumption habits of U.S. Hispanics by level of acculturation. "Marketers who wish to stay ahead of this growth should invest in understanding not only U.S. Hispanics' behaviors, but also the traditions they honor at the dining table."

Shelf Appeal

Such studies make obvious the value of courting Hispanic shoppers, as well as consumers already enamored of the various Latino cuisines, or curious about them. Many retailers and manufacturers are already doing just that through targeted product selections.

Among mainstream supermarket operators, Pathmark, a banner of the Montvale, N.J.-based Atlantic & Pacific Tea Co., recently held a grand reopening of a 55,000-square-foot store in downtown Weehawken, N.J., a community that's 60 percent Hispanic. The refurbished supermarket now offers 1,400 new products aimed squarely at that demographic.

Ed Ambrose, director of ethnic merchandising, tells PG contributing editor Debby Garbato that Pathmark's 100-plus Northeastern stores have always tailored offerings around local communities, but that the Weehawken location needed to do a better job, and had become rundown as well. Among key merchandising changes, a value-priced pallet display area at the front of the store now features Hispanic staples like Goya canned beans and nectars, 20- and 50-pound bags of rice, large stock pots, and corn flour.

More than 15 companies, including Goya, Kellogg, Tropical, Thuman's, La Fe and Del Maximo, also provided food samples and entertainment at the grand reopening, with Kellogg's Tony the Tiger character putting in an appearance. Many of the suppliers are local. "We spoke to vendors we've been dealing with for 40 years to find out what customers are looking for," says Ambrose.

Pathmark carefully studied the community — which historically has been largely Cuban — and also its stores, says Ambrose, noting the evolving diversity of the neighborhood that now finds Dominicans and Guatemalans, along with some Mexicans and Puerto Ricans, also living there. Unlike some Hispanic neighborhoods, however, income and acculturation levels vary tremendously.

During the renovation, Ambrose says no departments were eliminated; rather, slow-turning and redundant SKUs were discontinued. A few Hispanic vendors, such as tortilla maker Mi Pueblito, were added. Other changes included improving offerings in the international food aisle and installing 15 doors of frozen Hispanic foods.

Pathmark also adjusted its employee mix to better reflect the community: Today, 60 percent of associates speak Spanish and wear tags to indicate this. The store, notes Ambrose, now employees 130 people, 20 percent more than before.

Even other channels are responding to the grocery needs of Hispanic shoppers. Miami-based Navarro Discount Pharmacy, the largest Hispanic-owned pharmacy chain in the United States, opened a store last November within the Homestead Pavilion Shopping Center in Homestead, Fla., with an extensive grocery offering for the surrounding Latino community. Items include Jumex nectars; an extensive variety of chili peppers; Goya, Gamesa and La Fe foods; and Café La Llave Espresso coffee. Further, Navarro's Vida Mia private label products, featuring bilingual labels, are also on the store's shelves.

Everybody's Trying It

"Non-Hispanic consumers have developed an increased interest in all kinds of Hispanic foods," affirms John Hernandez, director of sales at Secaucus, N.J.-based Goya Foods, the largest Hispanic-owned food company in the United States. "Also, they have become more discerning and sophisticated. There is a better understanding now that Tex-Mex and authentic Latino are different types of cuisines."

According to Hernandez, sales of Goya products have been strong across the board, but the best-performing segments have been those featuring better-for-you items or authentically convenient products. Last year, Goya continued to roll out reduced-sodium product extensions in such key categories as refried beans, as well as relaunching its tortilla line in packaging designed to appeal more to mainstream consumers.

Goya opts to tailor its merchandising approach to its various target shoppers. "We have traditionally expanded our product offerings based on consumers," explains Hernandez. "This has translated not solely to trends (i.e., healthy, organic, etc.), but also in particular to ethnicities. We merchandise our sections based on this 'customized' approach to the end consumer. We also look for secondary locations on crossover items such as olive oil, rice mixes and baked beans."

Last year, the company celebrated its 75th anniversary with a range of consumer activities and events, including the "Goya Match Your Birthday!" promotion, which consisted of an on-pack game on 200 million Goya items, an online game and a mail-in sweepstakes; the online Goya's 75th Birthday Bash featuring Goya's Greatest Fan contest, party food recipes, games and more; and a six-city concert series starring Latin music artists Marc Anthony, Ana Gabriel and Marco Antonio Solis, with tickets awarded to consumers through partnerships with local retailers in each market.

When asked what the industry's most effective Hispanic food strategies ought to be, Hernandez replies: "Manufacturers and retailers should keep abreast of changes in the composition of the Hispanic population (by country of origin and level of acculturation) at a national and local level, since it would have an impact on the product assortment they should offer in any particular market. Latinos are not only growing in numbers, but they are also moving within the U.S."

Drink to Food

When it comes to tantalizing the palates of Hispanics — or non-Hispanics intrigued by various Latino cuisines' unique flavors — even beverages are getting in on the act. PepsiCo soft-drink brand Sierra Mist Natural has joined forces with Aarón Sánchez, chef, restaurateur and star of Food Network's "Chopped" and "Heat Seekers" shows, for "Comer Juntos: Una Tradición Natural," a promotion with the aim of encouraging families to share Latino-inspired food and drinks ("Comer Juntos" is Spanish for "Eating Together").

"There's real joy in instilling the practice of a family meal, not only on special occasions, but any night of the week," says Sánchez. "Some of my favorite memories bring me back to cooking in the kitchen with my mom; it inspired me to become a chef, and that's a testament to the power of food and family."

The program includes 10 original recipes by Sánchez that deliver authentic Latino flavors without a lot of work in the kitchen, enabling meal preparers to spend more time with friends and family. Recipes include Slow Cooked Roasted Fiesta Pork, Slow Cooked Roasted Chipotle Chicken and even a dessert, Mojito Pound Cake. Seven inaugural videos provide step-by-step preparation instructions in both English and Spanish, with new recipes unveiled every week. A downloadable recipe booklet will feature three extra recipes. The videos and recipes are available at www.facebook.com/sierramist.

"Ultimately, our collaboration with Chef Aarón is a celebration of family and the bonds created around the dinner table," notes Brett O'Brien, VP of marketing for Sierra Mist Natural at Purchase, N.Y.-based PepsiCo, adding that the brand would "share his culinary creativity with families from all backgrounds through this exciting and engaging Web series."

Just Add Sauce

Of course, it's not just Hispanic-inspired foods that are making a major impression in the United States. Asian cuisines continue to make inroads on American taste buds as well, thanks to greater exposure to other cultures through travel and education, as well as a growing desire to bring the restaurant experience home.

"Consumers … want to eat ethnic foods but do not want to spend hours standing over a stove," notes Heather lafrate of the Westport, Conn.-based Green Seed Group, which in March introduced a line of Chinese cooking sauces under the well-established Sharwood's brand in Sweet + Sour, Sweet Chili, Kung Po and Black Bean varieties, at an SRP of $4.99 per bottle. "Sharwood's sauces cooked with a lean protein or vegetable create an authentic, complete meal in under 20 minutes."

Adds lafrate: "We've seen robust growth within Asian foods — the category has flourished by offering innovative food choices that are convenient to prepare and affordable — so consumers can bring their taste experience to a new level."

To promote the new product line, the brand "recently ran a successful program with News America utilizing in-aisle coupon machines and shelf talkers," says lafrate. "We saw a respectable uplift in sales. Promotions help move product off shelf but also support the retailer-vendor alliance." Additionally, "coupons, in conjunction with in-store sampling, will be key," she observes. "Our aim is to give the consumer an opportunity to try something new and delicious, and provide an immediate discount and the coupon to encourage repeat purchases."

This last point is especially important, as "often, consumers are reluctant to try or taste something new and will not always make a dollar commitment, even if the item is competitively priced," explains lafrate. "Sampling eliminates risk for the consumer by giving them a taste of what they'll get at home."

Her additional advice in marketing to the mainstream shopper: "Average consumers are not interested in ethnic foods that are too spicy. Make sure the flavor is made for the American palate. Today's ethnic food should be innovative, delicious, and convenient enough to prepare for the entire family — that's what Sharwood's is all about."

What's in Store

Despite bumps in the economy, formats and products geared toward Hispanic and Asian consumers are poised to be bigger than ever, concludes a report on the ethnic supermarket industry from Santa Monica, Calif.-based IBISWorld, highlights of which find:

• Demand for the industry's products is driven by the growing Hispanic and Asian populations in the United States; together, these markets represent a whopping 98.3 percent of industry sales.
• Over the five years to 2011, industry revenue has grown at an average annual rate of 2.1 percent to $26.0 billion.
• Despite the industry's growing market base, ethnic supermarkets were still adversely affected by the recession. In 2008, when consumer sentiment plunged by 25.5 percent, industry revenue edged up just 1.0 percent.
• The economy has been slow to recover, but a rise in per capita disposable income is expected to help industry revenue grow 3.5 percent in 2011.
• As Asian and Hispanic populations continue to grow domestically, demand for cultural foods will increase further. This trend, along with yearly per capita disposable income growth of 1.5 percent, will boost industry revenue at an average annual rate of 3.7 percent to $31.2 billion over the five years to 2016.

For more information, visit www.IBISWorld.com.