Trade Events
United States

New Product Opportunities Identified
for Ethnic Foods

at the Winter Fancy Food Show, San Francisco, 2003

Prepared by:
Leona Reynolds-Zayak, MBA
Market Analyst
Alberta Agriculture, Food and Rural Development

Currently the ethnic food market is worth $800 million. This includes Mexican, Italian, Chinese, Japanese, Thai, Caribbean and various parts of the Middle East, and Northern African.

To identify the newest ethnic food trends watch the restaurant trade as food trends usually start in the restaurant industry and then filter down to the retail market. In California the food trends demonstrate a mixture of the cultures that dominate the state. This ethnic influence continues to increase with immigration and create new opportunities. Chefs blend a variety of ethnic food ingredients and spices to create new and unique flavors. This trend, known as fusion cuisine, can be seen in San Francisco's Chinatown. Restaurants feature a blend of Asian foods, which are known as Pan Asian.

The Mintel International Group's report "The U.S. Emerging Ethnic Food Market" states that easy to prepare ethnic product sales increased 41% between 1996 and 2001. This report also cautions retailers and manufacturers that six out of every 10 consumers think that the ethnic food products purchased at supermarkets are inferior to the same dish bought in a restaurant. As a result, there is an opportunity for processors to provide a high quality ethnic easy to prepare or ready meal.

The Fancy Food Trade Show had numerous exhibitors who featured ready-made Chinese, Thai and Kosher dishes as part of their product line. These dishes ranged from minimal preparation to heat and serve. For example

• Thai Kitchen featured Rice Noodle Bowls and Instant Rice Noodle Soup, which were prepared by adding water and heating.
• Indian Harvest offered Thai Cooking kits, which were an assortment of sauces, traditional curry pastes, noodles, rice, and a cookbook.
• La Briute processes kosher shelf-stable/self-heating meals. These meals included the food entrée, food heater, fork, salt, pepper, napkin and 2ounce water pouch. Although La Briute meals take 14 minutes to heat it uses a very interesting technology. Poring the two-ounce package of water on it activates a heater, located on the bottom of the container. This allows the consumer not to be dependent on a microwave, stove or boiling water. La Bruite's brochure is attached.

Kosher foods were well represented and for the first time, the tradeshow featured a kosher section. The tradeshow directory lists 222 exhibitors with certified kosher products but not all of the companies were located in the kosher section. The foods present at the trade show ranged from beef jerky to biscotti and from sun dried tomatoes to surimi.

All major certifying agencies were represented: Organized Kashruth Laboratories (OK Labs), Union of Orthodox Jewish Congregations, KOF-K Kosher S and Star-K Kosher Certification.

The "Kosher Today" publication, which was handed out at the tradeshow, states that the 2002 US kosher market was worth $6.65 billion and had a consumer base of 10.5 billion. The Jewish community is not the only consumers of kosher products. Muslims, Seventh-Day Adventists, Jehovah's Witness, vegetarians and people who are lactose-intolerant also find kosher foods acceptable.

The Kosher Today publication also identifies that U.S. kosher foods processors have significant and unrealized potential to serve the Canadian kosher market. A recent USDA Foreign Agriculture Services Study revealed that the Canadian kosher food sales increased from $480 million in 2000 to $575 million in 2001. This is a 19.7% increase. The report identifies the following four reasons for the growth:

• Increased religiosity among Jews
• Concern about food safety by other Canadians
• Increased interest by Muslim, Seventh Day Adventists, Jehovah Witnesses, vegetarian and people who are lactose intolerant
• Increasing availability of kosher products.

With a population of 360,000 Canada is the sixth largest center for Jews. The largest Jewish communities are Toronto, Montreal and Vancouver. Supermarkets have become major players in the kosher market. Approximately 40% of Loblaw's stores have kosher departments year round and Thornhill, Ontario the Sobey's tripled is kosher department from 5000 to 15,000 square feet.

The USDA report outlines the following food product opportunities: home meal replacements, soy foods and beverages, snacks, organic foods, beef, bottled waterfruit juices, fish, functional foods and candy. Although more research is needed, perhaps there is an opportunity for Canadian/Alberta processor to serves this market rather than U.S. processors.

Initially I felt the Hispanic market was not represented at the tradeshow. However, further research into Hispanic food consumption revealed that several products could be considered part of the Hispanic cuisine. Cheese products such as Queso Fresco, Queso Blanco (Mozzarella Company), hot sauces (El Mexicano Sliced Jalapeno Pickled Pepers), tortilla wraps (Tumaro's Gourmet Tortillas) and salsa (Xochitl) are all part of Hispanic cuisine.

I only recognized two booths featuring East Indian food products. One was curry powder, the other a combination of wild rice dishes, soups and sauces (Indian Harvest). I was surprised that the East Indian market so poorly represented, as, I understood California (especially L.A.) to have a high Middle East population. Also, Tree of Life identified it as one of the top five trends. However, the Mintel International Group report states that interested in Indian Foods has decreased.

Other ethnic trends I observed were:

• The Japanese flavor Wasabi was very popular. It was found in sauces (raspberry wasabi dipping mustard)-, ready meals and snack foods such as Wasabi peas.
• Numerous Thai products
• Several ethnic drinks i.e. chai