Recreating the restaurant experience at home. Exciting new dishes. Diwali and Ramadan. Many factors are boosting sales in the booming world cuisine sector, says Simon Creasey
World food suppliers have never had it so good.
With the downturn encouraging more people to 'staycation' or dine in, and second and third-generation ethnic groups looking for more convenient foods, sales of ethnic cuisine are booming.
And it's not just the obvious cuisines generating world-class sales this year has already seen a raft of Caribbean products hitting the chiller aisles, alongside African ready meals, while products from new and emerging markets, such as Lebanese and Nepalese, are also starting to filter through.
This strong showing hasn't been lost on the multiples, as many of them have bolstered their world food ranges over the past few years.
Tesco sells world food products in almost 300 stores, generating about £85m a year in sales. Tesco is so excited by the category's potential it has even rolled out its World Food offer to city centre Tesco Express stores.
"There is a lot of innovation in the ethnic category and the multiples' world food sections are growing fast, so they want to see new stuff coming onstream," says Saj Noray, sales and buying manager at ethnic, halal and Asian frozen food manufacturer World Foods Frozen & Chilled. "They are very supportive of suppliers and give you opportunities to grow your business."
The multiples have become more assertive in their search for new world foods categories in recent years, adds George Phillips, commercial director at Enco Products, the UK's largest supplier of Caribbean food and drink.
"In the three years, I have been with Enco, Tesco has gone from 50 stores stocking Caribbean products to 270 stores, and you will see similar growth from other retailers."
Tesco's latest focus is on developing ranges for South American, West African and South African consumers. In the meantime, it's been developing exclusive, branded, world food partnerships to differentiate its proposition.
Earlier this year the retailer worked with Kerry Foods to develop a Levi Roots-branded range of Caribbean ready meals.
This followed last year's hugely successful launch of a new Ken Hom range of Chinese ready meals, also developed by Kerry Foods, which has helped Tesco's share of the chilled ready meals market to grow faster than any of its rivals, up 13.3% [Kantar Worldpanel 52 w/e 8/08/10].
Asda is also ramping up its world food offer. In the past year, the company has introduced more than 600 new world food products, with 3,000 world food lines now stocked in 200 stores across the UK, which has delivered year-on-year growth of 25.7%, it reports.
"We do this by speaking to customers in and around the communities we are based in, to ensure we have exactly the right product," explains Asda's ethnic food buyer Noor Ali.
The chain holds regular listening groups with its ethnic minority customers to make sure it is stocking the right products at the right prices, while linking trading activity to key events and festivals.
Asda has received plaudits for a number of firsts: becoming the first UK supermarket to stock Bollywood movies; being the first chain to introduce an off-the-peg Asian clothes range for women and girls; and creating Polish deli counters and halal butchers.
Earlier this month, Asda even launched its first World Food store, in Hounslow, with as much as one fifth of the lines catering to ethnic communities such as Polish, Asian, Caribbean and Mediterranean tastes, as well as Irish.
Not to be outdone, however, Sainsbury's which has a product range of around 250 lines generating £25m of sales per year has grown sales of world food products by 150% over the past five years, and the chain aims to double sales again by 2011, according to the chain's world food buyer Warren Denness.
"We are using our category knowledge and expertise to develop product ranges that cater to the specific requirements, demands and traditions such as events and festivals of key ethnic communities," he says. Cashing in on ethnic events is felt to be key, with most supermarkets running promotions around festivals, such as Diwali (Indian), Ramadan (Muslim), Notting Hill Carnival (Caribbean) and Chinese New Year Asda even sells greetings cards for Polish Mother's Day.
But a great deal of care and attention is being paid to day-to-day range segmentation. "We have created a collection of ethnic sub-ranges identified by ethnicity, religious group, product type and size (number of SKUs). Ranges and events are then allocated to stores based on local demographics and retail feedback, supported by localised marketing and channels," says Denness.
As the range develops and demand increases, Denness adds that "a potential exists to integrate traditional ethnic products into parent categories". And Asda's Ali says that "certain ethnic lines with wider appeal are becoming national".
This offers a ray of light for ethnic food suppliers, many of whom have to be content with their products sitting in world food sections, in a limited number of stores, instead of being stocked nationwide with similar mainstream products.
It's a frustration familiar to Noray. World Foods Frozen & Chilled deals with a number of multiples, in addition to cash and carries and Asian grocery stores, but despite numerous listings in the frozen food aisles, getting listed alongside mainstream products is a much bigger ask.
"Sometimes the mainstream buyers stick with the same suppliers month in month out, whereas ethnic buyers in the multiple retailers give ethnic manufacturers the chance to put their products forward," he says.
"Take curry. I could come up with a fantastic-tasting curry that's much better than the multiple's own label and retails at a similar price or is maybe a little bit more expensive.
"However, it would take me months and even years to get it in front of a mainstream buyer. Yet it could be launched very quickly in the world food aisles."
That's not to say products can't make the leap from the world food aisle to sit alongside equivalent mainstream products, as Levi Roots has proved. Of course, his Reggae Reggae sauce was in no small part aided by heavy PR exposure off the back of the popular television programme Dragons' Den. With big marketing budgets rarely available, a brand such as Ken Hom is also powerful.
The key, says Kerry Foods innovation director David Hamilton, is to think mainstream in the first place. "Levi Roots is in reality a great curry with a twist: chilli, cream, coconut, rice not forgetting the power that Levi brings to the offer through consumer trust.
"Weird and wonderful does not always deliver in supermarkets. If you look at recipes that are working, it is clear that on most occasions, consumers want to be taken gently into a new category, so risk has to be managed. A Japanese ready meal with miso and wasabi might work in a restaurant, yet struggle on a ready meal aisle. You need to put the consumer mindset first and recipe second for the biggest wins.
"Ready meals have changed out of all recognition in the past 20 years, but the top 10 bestselling lines are still the same. The key is to deliver consumer favourites but with fresher, more modern cues, which might be an ethnic recipe, but it might also be a change in packaging or a recognisable name or brand."
But there is no substitute for stellar sales, and smaller niche products can still achieve this, believes Noray.
"We identified a gap with our halal peri-peri chicken and tandoori burger range and the buyers liked the idea. Since we launched the burgers they have sold well and as a result we're now knocking on the mainstream buyer's door."
Yet with shelf space increasingly squeezed by non-food products, even standout sales may not be enough, says Ben Johnson, marketing director at All About Food, which takes restaurant-branded products into retail.
"Wagamama is 25% up year-on-year but it's performing out of a speciality ingredients area in retailers like Tesco, for example, where it is among brands like Yutaka that haven't found their way on to the main fixture yet," says Johnson. "A product has got to be able to hold its own on the main fixture but unless you take a leap of faith, and put it there, it never can."
In making the jump from world food to mainstream aisles, suppliers may also expose themselves to the threat of retailers launching a rival own-label product, however, and this is enough to dissuade some world food producers from engaging with the multiple retailers in the first place, says Ian McAllister, founder of gourmet curry paste company Coriando (see p42).
"If multiples are going to support and increase the range of world foods, they need to source and support independent suppliers and manufacturers of world foods rather than producing more supermarket own-brand versions," says McAllister.
"I would like to see more original, local, gourmet, independent world foods stocked by multiples and less of the own-brand factory-produced attempts at world foods."
And despite the huge progress of the multiples, there is still considerable room for improvement, many believe. "Retailers are open generally to ethnic products and markets and suppliers welcome this, but the shelves could be better laid out and signage needs to be improved," says Sally Campbell, category manager at Geeta's Foods. "It's not always easy to tell what is where. Better merchandising is definitely needed."
Phillips at Enco agrees: "I don't think the supermarkets have got the hang of communicating with the ethnic consumer and certainly not in relatively new categories. What they should be saying is 'While you're in the supermarket buying your soap powder, toilet roll, cornflakes and ketchup, why not nip down the world food aisle you will be amazed at what we sell'."
Indeed the entire approach to marketing by the major multiples is flawed, says Saad Saraf, chief executive of advertising agency Media Reach.
"Supermarkets are slowly beginning to appreciate the value of the ethnic pound, but the little marketing they do seems ad hoc and lacking in a strategic approach." They are failing, Saraf says, by "assuming that ethnic buying habits are the same as those of the 'mainstream' consumer, while believing that the same advertising will work with all communities."
Nor have they cottoned on to the buying habits of the ethnic community. "South Asian families, for example, tend to have large multi-generational households and extended families, so they prefer to buy in bulk," he says.
And few, if any, retailers have capitalised on the lucrative Asian wedding season, when spending on food can triple. According to Saraf, large retailers lack the insights that are needed to effectively market halal or kosher or ethnic vegetarian ranges.
Kate Waddell, managing director of consumer brands at brand agency Dragon Rouge, agrees. It's all about authenticity, she says. "Retailers do not appreciate the level of authenticity required by the ethnic consumer".
Supermarkets are relying, she adds, on poor-quality presentation dependent on Westernised views of ethnic cuisine. This tends to attract the British ethnic food lover, rather than the ethnic community.
However, one supermarket getting it right, says Waddell, is Asda. The chain shows a good level of proximity to the ethnic community, and a much clearer idea than its competitors of how ethnic consumers cook and shop.
And its success was recognised last month when Asda was voted Best National Retailer at the World Food Awards in London. Other winners included a lifetime achievement award for Wing Yip, while London-based Loon Fung was voted best independent retailer, Vita Coco took the best new product award, and Patak's won the best marketing campaign for 'Why Britain Loves Curry'.
The growing number of non-ethnic consumers buying into the world food category has clearly played a part in the recent sales growth, too.
Says Philips: "We're seeing a lot more mainstream acceptance of Caribbean spices, sauces and drinks and that's beginning to drive growth. If you put these products in front of people, the more adventurous consumers will buy." But just as great an opportunity comes from the UK's shifting demographic make-up.
The latest figures released by the Office for National Statistics show that the Muslim population in Britain multiplied 10 times faster than the rest of society over the period from 2004-2008, representing a huge potential audience of future consumers.
The continued rapid population growth of these ethnic groups in Britain, coupled with second and third-generation immigrants becoming more affluent and moving further up the economic food chain, will also provide a rich seam of affluent, middle-class ethnic consumers looking for more exotic food products.
"The diverse ethnic population of the UK has made it a highly receptive market to exotic flavours and food trends," explains Sara Jones, trade marketing executive at RH Amar, a distributor of ethnic food brands such as Geeta's and Wing Yip.
"This cultural backdrop has created a proliferation of restaurant types with representation of cuisines from around the globe," she adds.
"Stroll around London streets and you can find Caribbean, Creole, North African, Malaysian and even Sudanese restaurants. It's this very diversity which has brought about a dynamic, symbiotic relationship between restaurant culture and supermarket food fixture."
Lebanese and Nepalese products are also starting to make the transition from restaurant to retail, with other world cuisine hot on their tails, she adds.
So what's next? Which corner of the globe will be next to come into fashion. What about a ready-meal version of the Afghan national dish, kabuli pulao, or frozen Iraqi masgouf fish in the freezer aisles?
Unearthed's Simon Day is convinced the 'next big thing' in the world cuisine arena, will be an extension of Mediterranean foods "from the Italian, Greek and Spanish we are used to, to North African, Turkish and Middle Eastern".
Few of these are novel within the restaurant world, but Day believes they would bring something new to retail, while Latin American cuisine is "the dark horse".
But the challenge for suppliers, adds Day, is not just to spot the next world cuisine trends, however. It is introducing them in a way that retailers and their shoppers will buy into. And keep buying into.
Caribbean: Roots finds favour with mainstream
A growing interest in Caribbean food, fuelled largely by cookery programmes such as Rhodes in the Caribbean, has seen the Afro-Caribbean food and drink category grow at 15.4% year-on-year [IRI unit sales MAT 52 w/e 4 September].
This growth stems primarily from the introduction of new products, such as Levi Roots' Caribbean ready meals range, which rolled into Tesco in May. Andy Bolton, Tesco category manager at Kerry Foods, producer of the ready meal range, claims the performance of the new products has exceeded expectations, finding favour with slightly more affluent mainstream shoppers.
The brand is now worth around £30m a year, thanks in large part to its presence in multiple categories, including chilled ready meals, ambient and even food to go. In addition to a greater in-store presence, the company has invested heavily in marketing this year, with its biggest-ever on-pack promotion and food sponsorship of the MOBO Awards.
According to AB World Foods senior brand manager Shah Khan, 2011 will be just as busy on the marketing front, building up to sponsorship of UK comedy Anuvahood, to be released in March, and August's Notting Hill Carnival. Rival Enco Products, which has launched four new sauces, marked 2010 with its biggest-ever national sampling pack campaign and sponsorship of English Heritage's summer-long series of Picnic Concerts.
Non-Caribbean consumers will be key to the brand's future success, says Enco Commercial director George Phillips. "Growing a market that's already quite a good size in a relatively narrow consumer base is difficult unless we take share from our competitors, so for us it's all about recruiting non-Caribbean consumers," he says.
"When we start to see own-label jerk seasoning on the shelf it will provide a good indication of how mature the category is. I don't think that we are too far away from seeing supermarket own-label Caribbean products."
Mexican & USA: Milder means more geared to families
The skies have clouded over in Tex-Mex border country. Sales of chilled American and Mexican ready meals have taken a bit of a beating, down 10.7% and 1.8% respectively in value terms, according to Kantar Worldpanel data [52 w/e 8 August].
This contrasts with last year's World Cuisine Focus On, which saw US-style ready meals, such as spare ribs and chicken drumsticks in sauce, leap 16.1% in value and 10.5% in volume [Kantar Worldpanel 52w/e 6 September 2009] and their Mexican equivalents grow by 11.4% in value and 19.6% in volume.
Despite the slump in ready meals, Mexican meal kits continue to perform well, with the past 12 months seeing the leading meal kit manufacturers introduce milder variations of their core products to make them more family-friendly.
"A contributing factor in the spike in popularity of Mexican foods is that the accessible, meal-kit formula is marketed to the whole family, in contrast to some of the spicier ethnic cuisines that are too overbearing for a child's palate," says Sara Jones, trade marketing executive at ethnic food importer RH Amar.
General Mills UK sales director Andy Foweather agrees. "Our focus behind the launch of Old El Paso Extra Mild, Super Tasty is to draw a whole new group of consumers to the category. "Lovers of taste but perhaps not so much spice are now able to experience Mexican flavours through Old El Paso for the first time and perhaps as they grow in confidence they will move into other products."
Bev Taylor, regional marketing manager of rival outfit Discovery Foods, believes that Discovery and Old El Paso have a major role to play in educating consumers about how quick and easy it is to create great tasting Mexican food, with both brands capable of fuelling strong growth if they work together.
"With penetration of just 40%, there's a huge part of the population who are not buying Mexican yet," she says.
Chinese/Oriental: New year to see category rebirth
Just because a sector is mature doesn't mean it is running out of ideas. In the Chinese/Oriental category, a number of leading brands are about to unveil radical overhauls as the supermarkets and notably Tesco, with its stunning success in launching a Ken Hom range up their game.
Aimed at tackling poor consumer perceptions of Chinese ready meals, in its first seven months the new range prompted a 14% increase in sales of Tesco's Chinese ready meals. Oriental food giant Blue Dragon is set to undertake a £6m relaunch, with new logo and design, to coincide with Chinese New Year.
The ABF-owned player will also enter the cooking sauce category with six flavours, and the Oriental oven cook sector with a range of sticky sauces, available in four variants. Five new Stir Fry Shots are to debut, along with four new paste variants.
At rival Amoy, plans are also afoot to boost the portfolio. The brand is committed to listening to what consumers want, says senior brand manager Caroline Grimshaw.
"In the last three months alone we have invested £220,000 on consumer insight and spoken to nearly 2,500 consumers." Uncle Ben's, meanwhile, has big plans for 2011 with a £1.2m TV-led Chinese New Year campaign. "Consumers will also see an on-pack competition with a chance to win £10,000, in-store hot sampling and recipe leaflets," explains Mars Food UK's customer marketing manager Wendy Wing.
And it's not just Chinese New Year that is being celebrated with a refresh, with Thai Taste about to undergo a major rebranding. The range, which includes pastes, sauces and coconut milk, is now widely available across the multiples and the company has persuaded retailers to celebrate Thai New Year in April.
"Supermarkets are on the lookout for innovative, healthy ethnic products and Thai green curry has become a mainstream flavour widely accepted by the British," says supplier Bespoke Foods.
Indian: NPD key to hotter sales of indian fare
Is the nation's love affair with curry waning? While sales of chilled Indian ready meals posted a strong showing, with value up 5.6% and volume up 4.7% [Kantar], the performance was overshadowed by volume and value sales of English, Italian and French chilled ready meals.
Brits are not tired of curry but the fixtures are lacklustre at the moment, says Sally Campbell, category manager at Geeta's Food.
"There is excessive duplication with too many kormas, tikka masalas and so on. Shelves could do with some new products and formats." AB World Foods consumer and trade marketing controller Tracy Hughes adds that suppliers also need to show consumers that Indian food is a convenient and tasty meal solution.
They should do this, she says, at point of purchase, via strategic in-store fixture signage, as well as on-pack. New product development is also key to the future health of the Indian category and Hughes says that Patak's has played its part, with the launch of its Easy Onion Bhaji for Two (see Innovations panel) and its Original Bengal Pickle.
It's not the only company busy on the NPD front. Tilda has added two new recipes, Wholegrain Pilau and Sweet Chilli & Lime, to its microwaveable steamed basmati pouches, while Uncle Ben's has added tandoori and mixed pepper flavours to its ready-to-heat rice range. Innovation is also booming in the frozen ethnic snacks category, which enjoyed value growth of 12.9% from September 2008 to September 2010 and volume growth of 7.5% [Kantar Worldpanel 5 September].
This has been largely driven by the explosion of party food ranges in the multiples and the emergence of mini ethnic snacks. To cash in on this upward trend, manufacturers have been busy revising and improving their oriental and Indian snack ranges, in Daloon's case with the addition of onion bhaji dippers and a dim sum selection.
Spanish: Chorizo spices up spanish ready meals
Forget curry and pasta. The best performer in the chilled ready meal category is Spain, with the percentage of households buying into the category growing from 4.8% to 7.4% [Kantar].
This helped value grow by 56%, and volume by 57%. Despite such a stellar improvement, the nation is still a small fish in a large pond, with a market worth £20m (Italian food stands at £342m). But, hey, progress is progress.
The major change over the past 12 months has been the introduction of a greater range of Spanish ready meal options, says Simon Day, founder of Continental food company Unearthed.
"A few of the supermarkets now offer a chicken and chorizo casserole as well as more light options rather than the usual paella," explains Day. The nation's growing love affair with chorizo has also provided impetus for the Spanish food sector, he adds.
"Chorizo is slightly spicy and has a flavour profile that British people like. Its use has become much more prevalent thanks to TV chefs giving consumers more ideas about how to cook it. It has a really punchy flavour, so you can jazz up a lot of foods by adding it to the pot."
Looking ahead, Day expects a greater range of tapas ready meal products to emerge, even in unfamiliar territory. "Frozen tapas are definitely in the pipeline and something we would consider looking at," he adds.
Focus On World Cuisine