October 11, 2006
R&FF Retailer: Asian Invasion or Evasion?
By Denise Leathers
Through special arrangement, what follows is an excerpt of a current article from Refrigerated & Frozen Foods Retailer magazine, presented here
for discussion.
From popular chains like P.F. Chang’s and Panda Express to the mom and pop take-out joints popping up in towns across America, Asian restaurants are almost as ubiquitous as McDonald’s. And slowly but surely that awareness is translating into growing sales of Asian foods at retail.
Figures provided by ACNielsen indicate dollar sales of Oriental frozen dinners and entrees in U.S. food, drug and mass merchandise outlets (excluding Wal-Mart) expanded 3.1 percent over the 13 weeks ending June 17, while sales of Oriental frozen meal starters/stir fry kits jumped 5.3 percent.
“Asian is such a popular flavor profile right now,” said Gary Barnett, vp of marketing and sales at Amy Food. “But it’s underrepresented (at retail). It’s not even close to what it should be.”
Part of the problem, said Barnett, is a misconception over who purchases refrigerated and frozen Asian foods. “Buyers often say, ‘Well, we don’t have a large Asian population here.’ And I say, ‘That’s great, because that’s not who we’re selling to.’ We’re selling to everyone else, the people who can’t prepare Asian themselves at home.”
According to manufacturers, Asian foods are already so well established that consumers are now looking for new ways to consume them.
“We see a ton of innovations coming down the pike in terms of both delivery systems and flavor profiles,” said Tim Tsao, vp of sales and marketing at Kahiki Foods.
With regard to the former, Asian-style wraps are particularly hot right now because they tap into on-the-run consumers’ need for portability. Best described as “eggroll meets entrée,” wraps often contain the same ingredients as traditional Asian entrées – rice, protein and vegetables – but it’s all wrapped up in a wonton skin so it’s more convenient.
When it comes to flavors, traditional choices like teriyaki, sweet ‘n sour, General Tso’s and orange still rank as favorites, Joe Zalke, partner/managing member at InnovAsian Cuisine, said, “flavors such as kung pao, Mongolian, spicy orange, lemon, Thai peanut and lemon grass are achieving greater notice.”
The question of how and where to merchandise Asian foods seems to depend on the product in question. For example, manufacturers of Asian snacks and appetizers want to see them sold alongside other frozen snacks and appetizers, whether Asian, Italian or Mexican – not with other Asian foods.
Integration makes sense in frozen snacks and appetizers since two-thirds of the category is represented by “ethnic” varieties. But manufacturers of other frozen and refrigerated Asian foods prefer to display them together.
“In center store,” said Mr Tsao, “retailers often use signs to designate different ethnic food sections – Italian, Mexican, British, etc. Why not implement a similar set-up in frozens?”
Regardless of which approach retailers take, manufacturers also stress the importance of cross merchandising Asian foods with popular “go-withs” in other parts of the store such as rice, sauce, fresh and frozen vegetables, protein. “Asian food is still, in many instances, an impulse purchase,” said InnovAsian Cuisine’s Zalke.
“Any retailer can become a destination for Asian foods,” he said. “They just need to make a stronger commitment to giving Asian a prominent place in their merchandising calendars, schematics and menus.”
Discussion Questions: How is it that various Asian cuisines such as Chinese, Japanese, Indian, Thai, Vietnamese etc. are so popular in foodservice but
have not done as well on the retail side of the business? Do retailers have a handle on which of their consumers are interested in frozen and refrigerated Asian foods?
We knew a local Indian restaurant would become our favorite the moment we walked into it about five years ago because of the number of Indians seated at tables.
Manufacturers may not have to come up with products that are exactly what is found in individual Asian countries to be successful but the claims made by some about “authenticity”
are downright laughable. – George Anderson
BrainTrust
Recent Discussions
Discussion Questions
Poll
In the complete absence of any data on this, everything I know about Asian cuisine depends on Fresh and Fast – fresh ingredients cooked very quickly (e.g. stirfry). Packaging this type of food goes against the Fresh and Fast mantra. Maybe that’s why it doesn’t play as well at retail.
Steven is right about “fast and fresh” being key to authentic quality. One barrier to “scratch cooking” is knowledge, of course. But another can be the high cost of entry to make many of the most popular dishes. This is not due to the raw materials per se, but rather that many of the sauces are relatively complex blends of the traditional stuff we buy like soy sauce. So in order to make that first dish, you have to buy five or six bottles of stuff you may seldom use. Maybe making really good, authentic “Kung Pao sauce” available in an easy entry form could go a long way to opening this market?
Vanessa and David both make excellent points. One, all “Asian” food is not the same in the same way not all “Hispanic” food is the same. For that matter not all Chinese or Mexican food is the same. There are profound and critical regional differences. That said, David is right. All we need to think about are those (often franchised) fresh sushi operations popping up even in stores with a small Asian customer base like the Bethel Food Center in Bethel, CT. The trick is fresh and authentic. For the customers who don’t like authentic, the canned and frozen stuff will be fine.
Asian cuisine should be viewed as its individual parts, not as whole. Japanese, Thai, Vietnamese, Korean, Chinese, Indian, Filipine, Mongolian, Taiwanese…the list goes on. Although there is some overlap in ingredients – fresh or not- the smallest difference in flavor or preparation alters the dish’s region (not just country) of origin. As retailers, we would fail our customers (and the people who gave us these wonderful flavors) if we present Asian food products as a whole. It is an art for a retailer to identify products customers are comfortable with including on their grocery list as well as keep tabs on the American palate for newer flavors. And of course, consider every other behavior of the customer just as we do now for milk and eggs.
To get in on the retail side, many stores have put in Asian take-out counters. This is generally a bit more expensive than what the mom and pop Asian take-out restaurants charge. As for selling the items from the grocery shelves, there doesn’t seem to be a cost advantage. Where I live, for about $5-6 you can get a complete meal to go from one of the mom and pops. In the grocery store, it’s too expensive because of all the distribution channels, packaging, and advertising. Plus it isn’t fresh. For the consumer, why pay extra for something that isn’t fresh or you have to prepare yourself?
As I expect most of you know, Asian food of all types is extremely popular in the UK. There are the usual (often laughable) claims of authenticity by manufacturers but they aren’t really relevant. What is important is whether or not consumers like the way they taste. Every cuisine has its invented dishes – including chow mein in the US and chicken tikka masala in the UK – which have never been seen on a table in their alleged country of origin. Food evolves and tastes change as people move from one country to another, taking their cuisine with them but modifying it according to available ingredients and the preferences of the people they meet wherever they settle. Methods of mass production further change it because you simply cannot reproduce in bulk what has been cooked in a domestic kitchen no matter how hard you try. What counts is whether consumers like it or not. Promoting it as related to a particular country is a good but limited exercise. Any retailer wanting to increase sales of Asian or any other “new” type of food must convince customers that they will enjoy it otherwise no promotion ever devised will get them to buy it more than once.
Asian food, for the most part, is cheap, fast and tasty. It is typically cooked to order, so it doesn’t endure the trial by freezer and microwave. It has been slow to catch on at retail because there is a Chinese restaurant adjacent to almost every grocery store where you can buy food freshly prepared cheaper than you can buy it frozen or refrigerated in the grocery store. Who would buy frozen for $5 when you can get fresh for $4?
However some people may not like Kung Pao sauce, they may prefer Hoisin or Satay (my personal favorite). Bottom line for this type of ethnic food is it is too expensive to buy the “right” fresh ingredients at retail, takes a Wok to prepare and doesn’t really fill up the family for dinner. Kids will need to snack later. So fast food lunch is basically the boom.
Traditional Asian cuisine is meant to be freshly prepared and eaten immediately after. I don’t think it holds particularly well in a frozen state. This is why people opt for foodservice.
This is not to say it can’t be done. It just requires the right formulations and ingredients — especially fresh spices that are so important to Asian cuisines.
Wegmans has an outstanding Oriental foods bar and Whole Foods has done an outstanding job with freshly prepared Indian delicacies. Again, the watchword here is fresh, fresh, fresh! And please don’t give me the old BS about “fresh frozen.” It’s not the same.
It’s hard for a grocery supplier to decide: should the ethnic dish be “dumbed down” or authentic? Some people buy canned chow mein, while others laugh at it. One great advantage the grocery business has over many other businesses: consumer research can be done quickly at very low cost. If enough people like the taste, you have a chance, authentic or not. Grocery products are not subject to the “tyranny of or.” You can sell the authentic versions as well as the opposite. Just use a different brand name.
I am an Asian and have worked in the food industry for years. My experience includes food marketing, supermarket operations along with Asian food product development, processing and food services. I see there are three main reasons why Asian food is underperforming in retail. 1) The lack of understanding of Asian food as a category in general has led to many misconceptions as to what Asian foods are, how they are processed, and what they can offer to mainstream consumers; 2) Not enough studies are done about consumer demand for Asian food that can help retailers make product selection and merchandising decisions; 3) Foodservice draws customers locally or regionally, which makes for easier and cheaper marketing and advertising. Retail, on the other hand, will need a broader customer base; it takes a bigger investment in marketing which at this point few manufacturers or retailers have committed to do.
No doubt there is a great potential for Asian food, frozen or fresh, in retail. However, it takes a systematic approach to reinvent this very promising category and to bring it to its full scale. The market is ready; consumers are constantly searching for Asian foods for their variety, healthy benefits, and new life experiences. It is up to the industry leaders now to take more aggressive actions and meet the growing market demands of Asian food in retail stores.
I think the question should be “do Asian cuisine suppliers have a handle on how to market to retailers and retail customers?”
Transitioning from foodservice success to retail is difficult because the supplier may not understand what it takes to sell to mainstream retail accounts. What was standard and acceptable in foodservice may not be the same in retail.
Suppliers need to tailor their program to suit the needs of the decision maker first. This is not the consumer, this is the buyer. The buyer is looking for a program that creates minimal work and yet satisfies internal requirements for turns, sales and margin.
Packaging has to be different to evoke the same emotions as one gets from eating the Asian cuisine. Most of the packaging that I see is fairly standard — clear polybags with a white label and black text. Or, in the frozen section, polywrapped Styrofoam trays with a white label and black text. Only the minimum information required by law…no connection to the consumer at all!
POP is something that will help create awareness of the product. CPG’s do a fantastic job at this — Asian cuisine suppliers have to take it up a notch to differentiate as well. Again, I don’t see this at present.
Shipping and return policies have to be understood. Most Asian frozen food does not have a long shelf life like traditional frozen entrees because they tend to contain fresh ingredients and none of the additives that make the food last longer or look nicer but is not that good for you!
Price points have to be reasonable. Instead of creating family pack sizes, suppliers should consider smaller serving packages with lower price points to minimize cognitive dissonance. Increasing trial will help the buyer in deciding whether to allocate more shelf space to Asian foods.
The buyers don’t know this category that well. It is up to the supplier to educate the buyer on best practices.
More Discussions
Is Five Below Poised For Even Greater Growth?
Five Below is hitting serious growth numbers. Can this trend continue?Should IKEA Be Flattening Management?
Should IKEA be trimming down its management headcount?Is Legislation the Answer on Visa, Mastercard Swipe Fees as ~$200 Billion Record Is Set?
Is lawmaking the way forward on swipe fees?
In the complete absence of any data on this, everything I know about Asian cuisine depends on Fresh and Fast – fresh ingredients cooked very quickly (e.g. stirfry). Packaging this type of food goes against the Fresh and Fast mantra. Maybe that’s why it doesn’t play as well at retail.
Steven is right about “fast and fresh” being key to authentic quality. One barrier to “scratch cooking” is knowledge, of course. But another can be the high cost of entry to make many of the most popular dishes. This is not due to the raw materials per se, but rather that many of the sauces are relatively complex blends of the traditional stuff we buy like soy sauce. So in order to make that first dish, you have to buy five or six bottles of stuff you may seldom use. Maybe making really good, authentic “Kung Pao sauce” available in an easy entry form could go a long way to opening this market?
Vanessa and David both make excellent points. One, all “Asian” food is not the same in the same way not all “Hispanic” food is the same. For that matter not all Chinese or Mexican food is the same. There are profound and critical regional differences. That said, David is right. All we need to think about are those (often franchised) fresh sushi operations popping up even in stores with a small Asian customer base like the Bethel Food Center in Bethel, CT. The trick is fresh and authentic. For the customers who don’t like authentic, the canned and frozen stuff will be fine.
Asian cuisine should be viewed as its individual parts, not as whole. Japanese, Thai, Vietnamese, Korean, Chinese, Indian, Filipine, Mongolian, Taiwanese…the list goes on. Although there is some overlap in ingredients – fresh or not- the smallest difference in flavor or preparation alters the dish’s region (not just country) of origin. As retailers, we would fail our customers (and the people who gave us these wonderful flavors) if we present Asian food products as a whole. It is an art for a retailer to identify products customers are comfortable with including on their grocery list as well as keep tabs on the American palate for newer flavors. And of course, consider every other behavior of the customer just as we do now for milk and eggs.
To get in on the retail side, many stores have put in Asian take-out counters. This is generally a bit more expensive than what the mom and pop Asian take-out restaurants charge. As for selling the items from the grocery shelves, there doesn’t seem to be a cost advantage. Where I live, for about $5-6 you can get a complete meal to go from one of the mom and pops. In the grocery store, it’s too expensive because of all the distribution channels, packaging, and advertising. Plus it isn’t fresh. For the consumer, why pay extra for something that isn’t fresh or you have to prepare yourself?
As I expect most of you know, Asian food of all types is extremely popular in the UK. There are the usual (often laughable) claims of authenticity by manufacturers but they aren’t really relevant. What is important is whether or not consumers like the way they taste. Every cuisine has its invented dishes – including chow mein in the US and chicken tikka masala in the UK – which have never been seen on a table in their alleged country of origin. Food evolves and tastes change as people move from one country to another, taking their cuisine with them but modifying it according to available ingredients and the preferences of the people they meet wherever they settle. Methods of mass production further change it because you simply cannot reproduce in bulk what has been cooked in a domestic kitchen no matter how hard you try. What counts is whether consumers like it or not. Promoting it as related to a particular country is a good but limited exercise. Any retailer wanting to increase sales of Asian or any other “new” type of food must convince customers that they will enjoy it otherwise no promotion ever devised will get them to buy it more than once.
Asian food, for the most part, is cheap, fast and tasty. It is typically cooked to order, so it doesn’t endure the trial by freezer and microwave. It has been slow to catch on at retail because there is a Chinese restaurant adjacent to almost every grocery store where you can buy food freshly prepared cheaper than you can buy it frozen or refrigerated in the grocery store. Who would buy frozen for $5 when you can get fresh for $4?
However some people may not like Kung Pao sauce, they may prefer Hoisin or Satay (my personal favorite). Bottom line for this type of ethnic food is it is too expensive to buy the “right” fresh ingredients at retail, takes a Wok to prepare and doesn’t really fill up the family for dinner. Kids will need to snack later. So fast food lunch is basically the boom.
Traditional Asian cuisine is meant to be freshly prepared and eaten immediately after. I don’t think it holds particularly well in a frozen state. This is why people opt for foodservice.
This is not to say it can’t be done. It just requires the right formulations and ingredients — especially fresh spices that are so important to Asian cuisines.
Wegmans has an outstanding Oriental foods bar and Whole Foods has done an outstanding job with freshly prepared Indian delicacies. Again, the watchword here is fresh, fresh, fresh! And please don’t give me the old BS about “fresh frozen.” It’s not the same.
It’s hard for a grocery supplier to decide: should the ethnic dish be “dumbed down” or authentic? Some people buy canned chow mein, while others laugh at it. One great advantage the grocery business has over many other businesses: consumer research can be done quickly at very low cost. If enough people like the taste, you have a chance, authentic or not. Grocery products are not subject to the “tyranny of or.” You can sell the authentic versions as well as the opposite. Just use a different brand name.
I am an Asian and have worked in the food industry for years. My experience includes food marketing, supermarket operations along with Asian food product development, processing and food services. I see there are three main reasons why Asian food is underperforming in retail. 1) The lack of understanding of Asian food as a category in general has led to many misconceptions as to what Asian foods are, how they are processed, and what they can offer to mainstream consumers; 2) Not enough studies are done about consumer demand for Asian food that can help retailers make product selection and merchandising decisions; 3) Foodservice draws customers locally or regionally, which makes for easier and cheaper marketing and advertising. Retail, on the other hand, will need a broader customer base; it takes a bigger investment in marketing which at this point few manufacturers or retailers have committed to do.
No doubt there is a great potential for Asian food, frozen or fresh, in retail. However, it takes a systematic approach to reinvent this very promising category and to bring it to its full scale. The market is ready; consumers are constantly searching for Asian foods for their variety, healthy benefits, and new life experiences. It is up to the industry leaders now to take more aggressive actions and meet the growing market demands of Asian food in retail stores.
I think the question should be “do Asian cuisine suppliers have a handle on how to market to retailers and retail customers?”
Transitioning from foodservice success to retail is difficult because the supplier may not understand what it takes to sell to mainstream retail accounts. What was standard and acceptable in foodservice may not be the same in retail.
Suppliers need to tailor their program to suit the needs of the decision maker first. This is not the consumer, this is the buyer. The buyer is looking for a program that creates minimal work and yet satisfies internal requirements for turns, sales and margin.
Packaging has to be different to evoke the same emotions as one gets from eating the Asian cuisine. Most of the packaging that I see is fairly standard — clear polybags with a white label and black text. Or, in the frozen section, polywrapped Styrofoam trays with a white label and black text. Only the minimum information required by law…no connection to the consumer at all!
POP is something that will help create awareness of the product. CPG’s do a fantastic job at this — Asian cuisine suppliers have to take it up a notch to differentiate as well. Again, I don’t see this at present.
Shipping and return policies have to be understood. Most Asian frozen food does not have a long shelf life like traditional frozen entrees because they tend to contain fresh ingredients and none of the additives that make the food last longer or look nicer but is not that good for you!
Price points have to be reasonable. Instead of creating family pack sizes, suppliers should consider smaller serving packages with lower price points to minimize cognitive dissonance. Increasing trial will help the buyer in deciding whether to allocate more shelf space to Asian foods.
The buyers don’t know this category that well. It is up to the supplier to educate the buyer on best practices.