- MARKET INSIGHTS
A recent study from Iowa State University (ISU) found that ethnic foods account for $1 out of every $7 being spent on groceries. Overall, Mintel estimates ethnic food sales in the U.S. exceeded $2.2 billion in 2009 and predicts the trend will increase sales by 20% into 2014.
The largest segment of the ethnic foods market, Mexican/Hispanic foods, is responsible for 62% of sales. While Hispanics are by no means the sole purchasers of these foods, it should be noted the buying power of the Hispanic demographic is growing at a steady clip: the Selig Center for Economic Growth at the University of Georgia estimates the group’s buying power stood at $978 billion in 2009 and projects it to rise to $1.3 trillion by 2014.
In fact, according to Latinum Network, the Hispanic population in the U.S. accounted for more than 50% of real growth between 2005-2008; that group’s $52 billion of new inflation-adjusted spending far outpaced the new spending of non-Hispanics. Primarily due to an increase in the number of Hispanic households in the U.S., the growth also stemmed from increased spending among U.S. Hispanics, so much that it offset most (84%) of the real decline in demand across the $1 trillion food, beverage and restaurant sector.
Latinum found Hispanics created over $9 billion of new value in such “otherwise dormant” categories as fish and seafood, fresh fruit juice and dairy products. It further noted, “In particular, Hispanics are increasingly likely to eat out during the work day, driving new sales in fast-food breakfasts and full-service lunches.”
Out of One, Many
That said, the source of the growth of Hispanic flavors in the U.S. cannot be solely attributed to that demographic. Indeed, the overall U.S. food market has undergone a “Hispanic-ization,” notes Juan Tornoe, founder of HispanicTrending.org, to the point that salsa outsells ketchup, and tortillas outsell white bread. A rise in international travel and a desire to replicate those flavor experiences at home has led to a burgeoning popularity of flavorful dishes, both in the home and in restaurants. This is reflected somewhat in the unique items found on experimental menus in major U.S. population centers. New York Magazine has cited the popularity of cuitlacoche (a purplish fungus that grows on corn and is widely referred to as “corn smut”), parboiled grasshoppers and jumiles (beetles) commonly served with guacamole. However, the most telling sign of the popularity of Hispanic cuisine may simply be the fact that it is popular across the country, from major urban centers to small towns, thanks in no small part to the emergence of quick-service restaurants with Mexican fare as a focus, a trend which shows no signs of stopping--or even slowing.
Mucho Burrito is a fresh Mexican grill concept that opened its all-natural take on Mexican foods in Seattle this month. Featuring a menu quite similar to Chipotle’s, the chain got its start in Canada and promises a “focus on health,” with three different sizes of burritos. This is an effort to avoid the “overfull” feeling numerous consumers equate with some Mexican fast food, notes Alex Rechichi, the company’s founder.
Also this month, Pure Tacos took the all-natural Mexican concept to another level, when it debuted its gluten-free menu to visitors on the boardwalk in Ocean City, N.J. Pure Tacos’ fusion-inspired menu items include chicken & bacon ranch nachos and cheeseburger tacos, while its authentic menu boasts a street-food inspiration and ingredients, such as citrus guacamole, tomato-chipotle salsa and citrus-chile de pasila salsa--all served with roasted corn tortillas or freshly made corn tortilla chips.
The ethnic foods market in the U.S. does have a variety of offerings, and Mintel finds the popularity of ethnic foods is being driven by the Asian and Indian food segments, growing 11 and 35%, respectively. Similar to the market for Mexican foods, the former segment has benefited strongly from a surge in quick-service options, though retail options for Asian foods have also propelled some of the growth. While Indian food has yet to meet the high expectations afforded to it, and one Chicago entrepreneur is betting strongly on it.
Chutney Joe’s is a Chipotle-style Indian food franchise hoping to lure “Main Street America,” its founder, Vijay Puniani, envisions. Similar to Chipotle, the menu is simple: a $5.99 price for one of four meat, or four vegetarian entrées, and either rice or naan, the thin flatbread. The menu does adhere to certain preferences of American consumers: its samosas (dumplings) are baked instead of deep-fried, and cream and butter/ghee (hallmarks of Indian cuisine) are not to be found. Certainly, Indian food has room to grow; of the estimated $2.2 billion ethnic food market in the U.S., Mintel puts Indian cuisine’s share at only $40 million.
This article first appeared in Prepared Foods’ E-dition electronic newsletter. To subscribe, visit www.PreparedFoods.com/enews. pf
http://bit.ly/afUVSM -- “Ethnic on the Menu” from Prepared Foods
www.latinumnetwork.com/release4.php -- “U.S. Hispanics Propel Real Growth in Food”
www.HispanicTrending.org -- Latino Marketing and Advertising Consulting and Trends