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Going Global: What grocers need to know to meet growing consumer demand

With global foods going mainstream in Canada, what do grocers need to do to meet consumer needs?

Grocery Business columnist Mike Ljubicic, NIQ’s managing director for Canada, stated it best in a column in the August/September 2023 issue: “Canada’s multicultural landscape has contributed to a rich tapestry of ethnic diversity, shaping the nation’s social fabric and consumer market. Understanding and catering to the needs and preferences of ethnic consumers has become essential for businesses . . . Exploring the intricacies of ethnic consumer behaviour opens doors to significant opportunities . . .”

What’s interesting about this category is that growth is coming from two distinct areas: new Canadians who seek out foods from their cultural cuisines and Canadian-born (many from second and third-generation ethnic groups) consumers who crave foods from different parts of the world.

And research on this latter point supports it. A 2019 Mintel study found that more than half of Canadians say they’re more open to eating international foods than they were a few years ago. And more than three-quarters of consumers (77%) also view international foods as being more mainstream.

Whatever the international food offering, consumers want it to be authentic, says Frank Jaja, director, category management and ethnic for Metro and Food Basics. He says there’s a demand for “authentic quality foods, brands and flavours our customers know and trust, to be able to create authentic dishes at home. With this comes the need for authentic ingredients across all grocery categories. We’re also seeing a move to easy meal solutions such as ready-to-eat meal kits and frozen entrees, snacks and sides.”

B.K. Sethi, an ethnic foods marketing specialist, says second-generation “ethnic millennials” (born in Canada and having at least one parent born outside of the country) represent 17.6% of Canada’s population, and that figure is expected to grow.

“This group has assimilated into Canadian mainstream culture, but they also maintain their cultural traditions. They are more tech savvy, more educated and more health-conscious, and spend on average about $2,700 per year on food.”

One group of new immigrants influencing international food offerings, adds Jaja, is students. “They don’t have parents to depend on, which has led to the emergence of easy meal solutions within the international category. These consumers are looking for meal kits and frozen items that allow them to have their authentic flavours with little or no prep time. Of course, made-from-scratch cuisine will remain the largest segment within this market, but this new trend has opened the door to some new and exciting products.”

Robert Pereira, vice president of procurement for AI Premium, a multi-cultural grocer (Southeast Asian and European foods) with three stores in Ontario and retail partnerships operating fresh and grocery offerings across the Greater Toronto Area and B.C., says customers in the ethnic food space look for value, freshness and availability, just like shoppers in conventional categories, “but many of them come from cultures where food, specifically scratch cooking and fresh foods, are part of their identity, and they continue to purchase grocery ingredients most important to them. Large-format items in rice and flour, as an example, remain in high demand, as they’re staples for households.”

What’s changed in recent years is customers looking for “a more curated offering.” Pereira says he’s seen significant growth in this area with more retailers entering the ethnic food market. The category has evolved and grown in large part because there are now more points of distribution and more brands. “While supply chains have been under pressure in the last few years, access to foods from around the world continues to grow, reducing challenges with seasonality and supply.”

Sethi adds that when it comes specifically to ethnic millennials, retailers need to adjust their offerings to ensure they meet buying and consumption habits. “They read labels. They’re not price conscious, but at the same time, they want value. They like authentic flavours and prefer ready-to-cook or ready-to-eat food. And they also prefer authentic foods and are more willing to try foods from different ethnicities that they perceive as healthy and nutritional.”

For Jaja, what’s important when listing is authenticity of products and brands “as well as the incrementality of the SKU so we can expand our overall offering and have representation across all key categories. The largest growth opportunity is within the South Asian market. However, it is also important to maintain our strong assortment offering within all ethnicities and continue to look for opportunities to grow these segments as well.”

Merchandising matters

For AI Premium Food Mart, key to any merchandising strategy for international foods is to create a destination where shoppers can find all their international food offerings, says Pereira. “You need to be intentional, meaningful and relevant to the markets your stores are in. It should be a market-by-market, store-by-store exercise, and is most successful when you engage directly with customers in each market.”

For example, if the Southeast Asian population is your target market, you need to ensure you offer rice varieties, Ghee (clarified butter), and cuts of proteins like pork belly and beef shank, he advises. “And some conventional items like homogenized milk play a much larger role in South Asian households, as it is used as an ingredient in traditional recipes for curries and paneer.”

Metro and Food Basics takes a hybrid approach, says Jaja. “We still maintain the international aisle for ease of shopping, but we have also integrated international and non-international products for some key commodity categories, such as rice, oil, tomatoes and others, as these are products used by everyone across many cuisines. The biggest expansion in recent years is within the dairy and frozen, allowing consumers to do a full shop within our stores.”

Jaja adds that Metro and Food Basics promote foods for all ethnicities through campaigns such as “Kitchens of the World,” and support this with weekly overlays and promotional campaigns for all major high holidays. “Although these programs target specific holidays and ethnicities, if we continue to focus on authentic flavours and brands and represent these programs in-store, these will continue to appeal to a much larger audience.”

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