Over the past five years, consumer packaged goods growth has been driven only by inflation.
That’s the main problem facing retailers and manufacturers, said Carman Allison, Nielsen’s director of consumer insights.
Consumers are still cautious when it comes to spending, and the economy is still fragile.
The bright spot, noted Allison in a webinar held Tuesday on “The Growth Opportunity of Ethnic Consumers,” is the growth in ethnic stores (up 14%). Ethnic stores continue to capture a larger share of Canadian wallets, said Allison.
Indeed, ethnic consumers represent $4-5 billion retail opportunity–a projection of what manufacturers will sell from cheese to bicycles, in five years.
Bernice Cheung, Nielsen’s ethnic practice area leader, talked about the retailers that resonated with two out of the three top ethnic consumer groups.
For Chinese consumers, they’re three times more likely to shop at “remaining grocery” or ethnic grocers, and are twice as likely to shop at warehouse clubs like Costco. They enjoy the sampling there, said Cheung. Especially if they’re new to the country and aren’t familiar with the brands here.
Among South Asians, they’re three times more likely to shop at discount banners, and twice as likely to shop at drugstores. Cheung pointed out that this group buys a lot of milk, not just for drinking, but for producing their own yogurts and in daily dishes, so milk pricing at drugstores is attractive for them.
When it comes to reaching Chinese and South Asian consumers, Cheung said knowledge of media consumption habits for different ethnicities are important.
South Asians, for example, consume more TV and Internet, while Chinese consume more newspapers and are heavy users of Internet.
Cheung said that companies shouldn’t simply translate existing campaigns targeted at Caucasians with some Chinese text or voice overs. “It doesn’t work.”
Cheung pointed to some successful examples of ways CPGs have reached ethnic consumers. First, Coca Cola assigned a dedicated person to be its multicultural marketing director and aligned ethnic initiatives with brand strategy so that they were integrated into every aspect of marketing and operations.
The company also employed quantitative and qualitative tools. Coca Cola was able to quantify opportunities among various ethnicities for their category and brand.
Coca Cola identified that their juice formats differed here compared to China, where there wasn’t much consumer awareness around frozen or chilled. Through in-store communications, and listings of frozen and chilled juices in ethnic grocers, Coca Cola was able to adjust their strategy to reach ethnic consumers.
At Reckitt Benckiser, they leveraged their brand strengths to reach ethnic consumers. For instance, they leveraged their Dettol brand, popular in the Middle East and South Asia, and associated it with Lysol.
The company imported Dettol soap into the Canadian market. Similarly, the company tweaked existing brands such as Frank’s Red Hot sauce to reach ethnic consumers. Their new Bollywood line features a different flavour profile that caters to the ethnic consumers’ preferences.
Cheung added that retailers and manufacturers should share information for win-win collaborations to reach the ethnic consumer.