Tesco doubled the size of its world foods range last year, while one Asda devotes 20% of shelf space to ethnic lines. Catering to ethnic shoppers and world cuisine fans has never been bigger business, says Nick Hughes
Not so long ago, if you fancied a Polish sausage for your dinner you would have had to journey to Warsaw. Nowadays, a trip to a local Tesco will do the job.
Supermarket world foods sections are fast catching up with the independent sector as they adapt to Britain’s changing demographic make-up. Tesco doubled the size of its world foods range to 3,000 products in 2010 and is in the process of launching seven new ethnic lines, with Turkish, Sri Lankan, Filipino, African, South African and Greek-Cypriot ranges joining its existing Asian, Oriental, Afro-Caribbean, kosher, Polish and halal selections.
Brands that make their debut as niche, ethnic products in the world foods aisle can find their way into the mainstream.
Encona, the range of Caribbean chilli sauces sold by Grace Foods, has done just this. A world food staple for the past 25 years, the range gained mainstream distribution in 2007 and now sits in the same aisle as tomato ketchup in Asda, Tesco, Sainsbury’s and Morrisons.
Although Encona was developed in the UK specifically for the Caribbean expat community and has traditionally not been sold in the Caribbean itself Grace Foods has decided to begin exporting it there from the UK.
Another product that has made the move from the world food aisle is fruit juice brand Rubicon, which now sits in the main soft drinks fixture. And supplier Kohinoor Foods has made the transition from the independent channel into mainstream retail with its Trophy rice brand, which delivered 37% value growth in 2010 on the back of listings with Tesco, Asda and Sainsbury’s.
In 2009, Asda opened a flagship world foods store in Hounslow, West London, where a fifth of shelf space is given over to specialist foods for Asian, Irish, Mediterranean and Polish consumers.
Asian foods became an established part of supermarkets’ offerings a long time ago, but the removal of national boundaries through membership of the European Union has created new opportunities.
According to the Office of National Statistics, the Polish-born population of the UK increased from 75,000 to 515,000 between December 2003 and March 2010 though experts estimate the real figure could be much higher. With the sudden influx of Polish expats came the opportunity to sell them the foods of their homeland.
Dimark, which started out importing Mediterranean food to the UK, sensed an opportunity after Poland joined the EU in 2004. “We saw there would be a large number of Poles coming over here, so began bringing meat and fruit juice across,” says general manager Ibrahim Yucesoy.
What started off as one or two pallets has turned into lorry-loads of Polish brands. In 2009, Dimark was ranked 50th in The Sunday Times Fast Track 100 list of the fastest-growing companies in Britain.
Opportunistic importers may have pioneered expat food, but supermarkets have wasted little time in jumping on the bandwagon. In just four years, sales of ethnic foods at Asda have increased 70%, with year-on-year growth of 23.5% in the past 12 months alone. The focus for Asda is to ensure the right range goes into the right store, says Mehul Patel, the retailer’s buying manager for emerging markets. Demographic awareness is key. “We’ve got a store in Farnborough that has a large population of Gurkhas, so we’ve tailored a range that is appropriate to that area. That’s mirrored around the country,” he says.
Understanding the local population is one thing, but choosing which products to stock requires more detailed research. Patel and his team recently returned from a trip to India, where they visited a Walmart Bharti store. “We went for an inspirational trip to see what the Asian customers were buying into what brands, what pack sizes and what products,” he says.
Research is key, agrees Warren Denness, Sainsbury’s buyer for ethnic. Working closely with Sainsbury’s supply base is crucial when dealing with ethnic brands, he stresses, as it is important to “pick up on the heritage, tradition and differences in ways of life”.
As for future trends, Polish foods remain a key focus even though the number of Polish-born people in the UK has declined slightly in recent years. One reason for continued demand is the growing number of Brits getting a taste for Eastern European delicacies, claims Dimark’s Yucesoy.
The admittance of other Eastern European states into the EU is giving supermarket buyers new avenues to explore. “We’re looking at brands from Romania, Bulgaria and Lithuania, but we’re not just going to put those brands in for the sake of putting them in,” says Asda’s Patel. “We need first to identify if there’s a demand in the catchment of that store.”
Although the number of Romanians living in the UK has trebled since 2007, there is a limited range of native products on the market. This is largely down to legal barriers, according to Yucesoy. “The issue with Romanian suppliers is getting them to comply with EU legislation on things such as labelling,” he says. Fortunately, Romanian and Polish diets are broadly similar, so expat Romanians are substituting Polish brands for their own.
And it’s not just niche brands that are embracing the opportunities in the Polish market. In 2007, Nestlé launched its Polish Winiary ingredients brand in the UK to meet the demands of the Polish population. The brand is now managed by Nestlé subsidiary Osem, which also supplies ethnic communities in the UK with kosher, halal, Asian and Afro-Caribbean foods.
In a clear indication of its continued confidence in the market, Nestlé UK is rolling out the first retail product of another Polish favourite Maggi to supermarkets. The launch of Maggi So Juicy spice mix has “great potential” in the UK, says Bernard Paternot, managing director for food and beverages at Nestlé UK & Ireland.
But despite such confidence, exporting brands to the UK doesn’t always work.
Heinz introduced its Polish Pudliszki range to the UK in 2007 but withdrew it a year later, claiming it was no longer viable for Heinz to sell it directly given the strength of the Polish zloty to the pound and the decline in the size of the Polish population in the UK. The brand is now supplied to the UK through third-party distributor Gima.
The halal market also offers great opportunities for growth in the UK, believes Yucesoy. “There are six million non-Muslim consumers in the UK who buy halal products because of the perception of quality and health, and this is a big opportunity for us,” he says.
The ultimate aim for the likes of Denness and Patel is to make their supermarket a one-stop shop for every ethnic consumer as independent ethnic supermarkets are only too aware.
Patel concedes they’re not there yet. “There are some areas, especially in things such as fruit and veg, that are very specialist, which is where the independent shops come into their own.”
Patel, however, claims that “for a second-generation Indian like me, Asda already is a one-stop shop”.
In an era where second and third-generation ethnic consumers have grown up with supermarket hegemony as the norm, Patel is far from alone.
Retailers, buyers and importers are scouring the four corners of the globe to try and deliver the next big thing in world foods.
Here are five exciting products experts predict could make it big in the UK.
This Turkish pasta brand is made from 100% hard durum wheat. It is already exported to about 80 countries worldwide, with experts describing it as offering “Italian quality and excellent value at the same time”.
Sainsbury’s buyer Warren Denness believes this traditional Indian snack has the capability to move from the world foods aisle to the crisps, nuts and snacks fixture. The range includes Bombay Mix and Chakri Sticks.
A Swiss brand popular in Germany and the Baltics, Nestlé-owned Maggi includes soups, stocks, sauces and seasonings. Recipe mix Maggi So Juicy started rolling out to UK retailers last month, backed by a £6.2m marketing spend.
A Turkish halal brand that includes traditional sausages as well as salamis. “We brought this product into the UK about three months ago, and the growth rate is 40% month-on-month already,” says Dimark.
Already available in Tesco and Asda, these small, flat Asian breads are traditionally eaten with curries but can be served with ice cream. Asda’s Asian Bread Week from 21 March will be tailored around them.