Canadian grocers and consumer packaged goods companies need to pay closer attention to the rising tide of ethnic shoppers, or risk an inevitable loss in market share.
That was one of the major points made during Canadian Grocer’s Ethnic Insights conference Tuesday in Toronto.
The conference featured expert speakers, as well as grocery store operators and suppliers who cater to ethnic shoppers.
Bernice Cheung (pictured above), ethnic practice area lead at Nielsen Canada, provided hard numbers to show the coming growth of ethnic consumers.
As of 2011, there were 6.3 million visible minorities living in this country, compared to 26.5 million Caucasians.
By 2031, visible minorities will double to 12.8 million, while the number of Caucasians will grow just 10 per cent to 29.2 million.
“Visible minorities are changing the Canadian landscape,” she said.
Cheung pointed out that by 2031, one in three Canadians will be a visible minority; in the 1980s, just one in 20 were, she said.
Three ethnic groups in particular are emerging as consumer powerhouses: Chinese, Filipinos and South Asians.
Cheung pointed out a few shopping habits that retailers and CPGs should be aware of.
Asian consumers view grocery shopping as fun, family time. Fifty-six per cent seek in-store demos before making a purchase.
What do they buy? Nielsen Homescan panel data shows Chinese shoppers are twice as likely as all consumers to buy vegetables and dried grains such as rice, and 1.5 times as likely to buy pasta, refrigerated drinks, skin-care preparation and inter-dental products.
Chinese also buy deals more often than the general population. Thirty-six per cent of Chinese shopping expenditures are on deals compared to 25 per cent for all Canadians. Among the most common products purchased on promotion by Chinese: razor blades, bread and gum.
South Asian customers, meanwhile are 2.5 times as likely to buy pancake and batter mixes, 1.9 times as likely to buy vegetables and dried grains, and 1.5 times as likely to buy cooking oils and sprays, milk and yogurt.
South Asians are three times as likely to shop at discount stores, such as No Frills and FreshCo, and twice as likely to head to Shoppers Drug Mart and London Drugs.
Ethnic shoppers tend to shop at several stores per week for groceries. These include ethnic supermarkets, discount stores and Costco.
Susan Weaver, managing director of Pearl Strategy, a company that follows shoppers around stores to understand their habits, pointed out that the typical South Asian customers visit an Asian store one to two times per week, a discount store once per week and a big-box store one to two times a month.
She noted that a typical South Asian mom in Canada will head to the ethnic store to pick up Asian specialty foods, produce and, perhaps, Bollywood-type DVDs; a discount store to buy basics and school snacks for her children, and Costco for cleaning products, health and beauty, food basics and to try new foods.
Weaver said South Asians in particular seek natural foods with few ingredients that offer convenience. One traditional North American dish that meets those needs: simple cold cereals such as Rice Krispies.
She said it is important to understand how people who’ve immigrated to Canada behave. For instance, in China people often eat out. The useful tip here for grocers, she said, is Chinese in Canada see prepared foods in the supermarkets as a good alternative to restaurant food.
The typical Chinese consumer is especially keen on Costco,. “Costco is about aspiration to her,” Weaver said. “Chances are she was brought to the store by a friend and she can’t wait to get a membership card.”
Another Ethnic Insights conference speaker delved into the store experience.
Robin Sherk, director of retail insights at Kantar, said retailers can no longer assume all customers are the same. They need to make the shopping experience more accessible to all.
One way to accomplish that goal is to put more signs up explaining the different ways foods can be cooked and eaten. For example, signs in the produce section could teach Caucasian shoppers about Cilantro, a popular Latin American ingredient, while signs about Romaine lettuce could teach ethnic shoppers about the North American salad staple.
She urged retailers to use displays for holidays, such as Cinco de Mayo, to get all shoppers excited about ethnic foods.
Also featured at the conference was a panel session with representatives from retailers such as Oceans and Galleria Supermarket and manufacturers such as Ti Foods and Tree of Life Canada. The panel was moderated by Canadian Grocer’s managing editor, Nancy Kwon.
Partha Guha, senior marketing manager at Unilever International, said reaching ethnic consumers is a matter of education and understanding. “Ethnic consumers are not aliens,” he said. “It’s another market segmentation.”
Manoj Biswas, vice-president of corporate affairs at Oriental Food Mart, a Toronto-area grocer, said mainstream stores often try to lump all ethnic products in one aisle under the heading “International”–something that doesn’t resonate with many ethnic Canadians.
Most panel members suggested that to reach ethnic consumers, retailers and manufacturers need to understand their shoppers better. This needn’t be difficult, several pointed out, and can be accomplished by having the right people selling the items in stores.
Terry Wong, director of marketing for Authentic Ethnic at Tree of Life, said that when running an in-store demonstration of an ethnic product, stores should have someone who knows all about the product handle the demo. “So when people really start to ask about how to use it they can answer.”
Several panelists also pointed out that products, services and merchandising need to be authentic. “We can’t cheat the consumer,” Guha, said. “You can’t sell Japanese food that tastes like Chinese food.”
But even as conventional Canadian retailers and CPGs are trying to cater to ethnic consumers, ethnic retailers are reaching out to the traditional Canadian shopper.
Frank Ho, vice-president of Oceans Fresh Food Market, pointed to a 55,000-square-foot store his company will open in Hamilton that will have an extensive prepared food section he described as “East meets West.” In addition to sushi and Mandarin-style dishes, there will also be western foods, a sandwich bar and coffee bar
“Ethnic retailers aren’t just serving ethnic consumers anymore,” Galleria Supermarket’s Won Suk Ha, said pointing out that his Toronto-area Korean supermarket chain is now attracting mainstream shoppers who are keen to try authentic Korean dishes.
“So you’re not just selling food, you’re selling culture,” he said.