Market Information
United States

US Ethnic Food Market

July 2005

The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report, nor does it necessarily endorse the organizations listed herein. Readers should independently verify the accuracy and reliability of the information. This report is intended as a concise overview of the market for those interested in its potential and is not intended to provide in-depth analysis which may be required by the individual exporter.

The ethnic makeup of the US is changing rapidly. This cultural diversity mirrors the demand for menu globalization which is occurring in many US states. Currently over 30% of the people residing in the US are considered ethnic, the largest ethnic group being Hispanics, followed by African Americans, and Asian Americans. The Ethnic food market currently generates about US$75 billion dollars a year, and accounts for $1 out of every $7 spent on groceries. The expanding ethnic food market is due as much to the influx of new immigrants as to the diversifying tastes of Americans in general. In fact, 75% of ethnic food consumption comes from mainstream customers. Many non-ethnic consumers have acquired tastes for ethnic foods, due to the influences of local ethnic communities and international travel.

Size of the Ethnic food Market

The US ethnic food market is growing rapidly, with an expected increase by 50% over the next decade. The US$75 billion ethnic food market has grown from $53 billion in 2002, and US$37 billion in 1997. Ethnic shoppers account for 37% of all supermarket sales, a number expected to increase as more retailers are allocating more space for ethnic foods.

Food services drives the sales in this sector and is also responsible for many new product introductions and trends. The food service industry enjoys 65% of all sales in the ethnic market, while retailers account for 35% of the sales. Most supermarkets and stores in the US are branching out into ethnic markets, with increased product lines and more shelf space designated to ethnic products. Ethnic supermarkets have also become popular as consumers find it convenient to stock up on ethnic products and national brands at the same time.

Although a majority of ethnic foods are not yet as mainstream as pizza or tacos, there is an increase in demand for ethnic concepts, with demand growing faster than restaurant supply. As manufactures recognize the potential for profit they are introducing new products, since 2003 more then 2000 new ethnic products were introduced.

The fastest growing segment of the US ethnic food market is emerging ethnic cuisines, which includes both retail and food service. Ethnic cuisines are facing high demands from both ethnic and mainstream consumers, concepts classified as ethnic, accounted for 25% of total industry traffic last year.

Consumer Market

Many ethnic foods are breaching mainstream status, as their popularity increases, and more people adopt the different foods of the world. Chinese, Japanese and Thai foods especially have gained wide acceptance, and other Asian foods are not far behind. Recent trends have also shown that Caribbean, African, Mediterranean food, halal, and kosher markets have an increasing consumer base.

• Future trends point to Australian, Hawaiian, Brazilian, and Malaysian foods becoming increasingly popular with non-ethnic consumers.
• Ethnic foods have a wider consumer base in more affluent areas
• Television food shows, the internet, and new restaurant chains are key contributors to the ethnic influence on consumers.

Hispanic Market

Hispanics are the fastest growing, and largest growing ethnic minority in the US, making up approximately 13% of the US population, and as such they represent the largest ethnic food market. By 2012, it is estimated that this segment will account for nearly 1 out of every five Americans, with an estimated 50 million Hispanics living in the US.

The Hispanics consumer segment is as unique as there are 2 distinct groups of Hispanics with differing consumer patterns. The two groups are, native born Hispanics who have lived exclusively in the US, and immigrant Hispanics. Native born Hispanics, usually speak fluent English, and tend to identify more with American culture, and their consumer patterns are similar to mainstream consumers. While immigrant Hispanics, are attracted to Spanish language media, and their shopping habits are reflective of their

heritage. These 2 groups are further broken down by country origin, while a majority of Hispanic Americans are of Mexican origin the Hispanic population is comprised of people from South Central America, as well as the Caribbean. All of these groups enjoy a variety of different meal inputs.

• By 2008 it is expected that Hispanic Americans will have a purchasing power of US$1 trillion
• Hispanic spending has increased from US$504 billion in 2000, to over US$750 billion in 2005
• The top ten Hispanic markets in the US include: California, the largest Hispanic market valued at US$189 billion, followed by Texas at US$113 billion; Florida, US$81 billion; New York, $55 billion; Illinois, US$30 billion; New Jersey, US$25 billion; Arizona, US$20 billion; Colorado, US$14 million; New Mexico, US$13 billion; and Georgia worth US$10 billion.
• 1/3 of Hispanic population is under 18 years old
• 67% of Hispanics are Mexican, 14% are South American, 9% are Puerto Rican, 4% are Cuban, and 7% from elsewhere.
• Hispanic consumers are not more brand loyal then the average American consumer.
• Most Hispanics identify themselves by their country of origin, as opposed to "Latino" or "Hispanic."
• Hispanic families are larger then the national average, and they prefer to prepare and serve food at home.
• Hispanics go shopping twice as often as the average American.
• Hispanic families spend approximately 7% more than the average American family on food and apparel annually.
• Recent research has dispelled many misconceptions regarding the Hispanic consumer base. Today the majority of Hispanic Americans are college-educated and upwardly mobile.
• Freshness and authenticity of fruits and vegetables is extremely important to the Hispanic consumer.
• Hispanics are attracted to bilingual packaging, and Hispanic influenced promotional efforts
• Hispanics spend approximately US$55 billion on food annually.

African American Market

The African American Consumer market has the highest level of purchasing power among ethnic groups in the US, and is a significant consumer force in the mainstream economy. Their purchasing power in 2002, was over US$645 billion.

Recent trends show that the average African American household have been experiencing rising income, and thus represent a very real business opportunity. African Americans were the largest ethnic minority in the US, until being surpassed by Hispanic Americans in 2004, they currently make up 12% of the US population. African Americans are one of the oldest ethic populations in the US. However this segment is under going some significant changes. This consumer segment is made up of several sub groups which include, native born population, and new immigrants from a variety of Caribbean and African countries.

• African Americans are highly brand loyal.
• African Americans spend 27% more on cooking ingredients then the average American consumer.
• African American cooking styles and flavours tend to be a blend of the Southern states, Caribbean foods, and foods of African origin.
• Hot food promotions have proven to be effective in appealing to the African American consumer.

Asian American Market

Asian Americans currently account for 4.2% of the US population, with 12 million people a figure expected to increase to 35 million by 2050. Similar to the Hispanic market, the Asian market can be broken down into several sub groups as the term "Asian American" includes people from many countries such as, China, Philippines, Vietnam, Korea, India, and Japan, each with different preferences and consumer patterns. Asian consumers buying power experienced an exponential growth rate of 128% between 1991 and 2002, and is showing no signs of slowing down. The Asian food market is currently worth US$837 million.

Asian American influence can be seen throughout the US, as Asian food is breaching the status of a mainstream category. Dishes such as chow mien, and sushi, are very popular amongst the average American consumers.

• Indians are the fastest growing Asian nationality, and have experienced a 49% growth in population since 1990.
• Asian prefer fresh food, and generally shop 4-5 times a week
• Over 50% of Asian Americans reside in California, New York, and Texas.
• Majority of Asian Americans are foreign born.
• Asian consumers are attracted to media in their native language.
• Most Asians with the exception of Indians consume more than the average amount of fish.
• Staple foods include rice, noodles and vegetables.

Fusion Cuisine

A new emerging trend called "Fusion food" is becoming increasingly popular and has proven to be an excellent avenue for introducing new flavours and products to the general population. Fusion food involves blending flavours and ideas from different cultures and ethnicities to develop a brand new dish. The popularity of fusion foods is leading people to use exotic flavours and ingredients in everyday foods. The blending of different ethnic spices is becoming so popular that manufacturers are beginning to incorporate different flavours in their pre-packaged foods.

Types of Fusion foods change depending on the influence of the ethnicity in the region. For example Texas has long enjoyed a large presence of Mexican-American foods known as "TEX-MEX" with combinations such as cumin infused beef gravy, while in San Francisco you will find more combinations of different Asian cultural foods, also referred to as "Pan-Asian" food.

Conclusion

Currently people of ethnic background make up 20% of the US population and all signs point to the ethnic segment making up an increasingly large percentage of the total population in years to come. The US ethnic food market is a multi-billion dollar market that caters to people of ethnic background and to the diversifying tastes of the general population. Because of it’s size and diverse makeup, the US ethnic food market presents an excellent opportunity for Canadian agri-food producers to take advantage of the wide variety of foods and products demanded.

Agri-food trade services website has a variety of reports available which give detailed information of the consumer markets in different regions of the US. Please visit ats.agr.gc.ca/general/home-e.htm for more information.