Asian Invasion Or Evasion?
By DENISE LEATHERS
Still underrepresented at retail, space gains in Asian foods don’t keep pace with dollar growth. The result: lost sales opportunities.
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, say manufacturers, that awareness is translating into growing sales of Asian foods at retail.
Figures provided by Schaumburg, Ill.-based 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% over the 13 weeks ending June 17, while sales of Oriental frozen meal starters/stir fry kits jumped 5.3%.
But according to manufacturers, the category could be doing a lot better if it got the space it deserves.
“Asian is such a popular flavor profile right now,” says Gary Barnett, vp of marketing and sales at Houston-based Amy Food. “But it’s underrepresented (at retail). It’s not even close to what it should be.” If retailers want consumers to buy Asian foods in their stores instead of at a restaurant, he adds, “They have to expand the category.”
Part of the problem, continues Barnett, is a misconception over exactly 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.”
New Formats & Flavors
According to manufacturers, Asian foods are already so well-established that consumers are now looking for new ways to consume them. As a result, “We see a ton of innovations coming down the pike in terms of both delivery systems and flavor profiles,” reports Tim Tsao, vp of sales and marketing at Gahanna, Ohio-based Kahiki Foods, Inc.
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. After all, says Barnett, “It’s hard to eat a rice bowl while you’re driving down the freeway.”
When it comes to flavors, traditional choices like teriyaki, sweet ‘n sour, General Tso’s and orange still rank as favorites. But, “Consumers of all ages are demanding bolder, more intense flavors,” reports Joe Zalke, partner/managing member at InnovAsian Cuisine, Kent, Wash. “So, flavors such as kung pao, Mongolian, spicy orange, lemon, Thai peanut and lemon grass are achieving greater notice.”
Consumers are also seeking more natural options, a trend manufacturers say is here to stay. Fortunately, many Asian foods are relatively “clean” to start with, making the transition to better-for-you a little less difficult. In fact, Discovery Foods’ “regular” Ling Ling brand potstickers were already so close to being all-natural that the Hayward, Calif.-based company decided to go the extra step and convert the club pack to all-natural, reports Joanne Sheehy, vp of marketing. The move makes sense, she explains, because it attracts new, health-conscious buyers to the product and rewards current buyers with an upgraded product.
For other manufacturers, however, upgrading to all-natural comes at a higher cost. For example, Kahiki plans to roll out its own line of 12 all-natural entrees and appetizers this fall, but they’ll likely sell at a 30-40% premium over their conventional counterparts. “That’s the challenge,” says Tsao.
'Not Price, but Value'
But, adds Barnett, “It’s not always about price but value. If you add an all-natural product, you add a convenience. When you charge a price consumers are willing to pay, then they’ve gotten a bargain.”
The other significant trend in Asian foods is the introduction of new package sizes. While single-serve entrees have been a category mainstay for years, many manufacturers are considering opportunities in family-size meals. But in the Asian frozen snacks and appetizers category, where big packages are the norm, just the opposite can also be true. Recognizing that frozen snacks and appetizers aren’t just for parties anymore, and that many consumers prepare a few at a time for a snack or mini-meal, Discovery Foods recently introduced “Snack Attack Packs.” The four single-serve SKUs microwave in just a minute “so they’re really geared to snacking,” says Sheehy.
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. “We recognize that greater growth opportunities lie outside of traditionally defined ethnic segments…” says Tom Bierbaum, director of marketing at Bloomington, Ill.-based Schwan’s Consumer Brands. In fact, he continues, the company went so far as to restage its Pagoda line of Asian side dishes as Pagoda “Asian Sensations” frozen snacks and appetizers, at least in part to convince retailers to merchandise them with “mainstream snacks” rather than as part of the more narrow ethnic side dish category.
Dedicated Section Needed
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. “Like grocery merchandisers,” says Zalke, “frozen food and deli merchandisers need to carve out a dedicated Asian section” to “enable” buyers of Asian foods and offer “a more consumer-friendly shopping experience.”
“In center store,” continues Tsao, “retailers often use signs to designate different ethnic food sections – Italian, Mexican, British, etc. Why not implement a similar set-up in frozens?” Yes, he admits, retailers would face some opposition from category captains unwilling to split up their mix by pulling out ethnic items, but both the category and consumers would benefit in the long run.
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 – rice, sauce, fresh and frozen vegetables, protein. “Asian food is still, in many instances, an impulse purchase,” says Zalke, so anything retailers can do to get it in front of consumers will only help.
Promote Year-Round
When it comes to promotion, says Zalke, retailers need to think beyond Chinese New Year. Because Asian flavors can be blended with every protein and vegetable, “Promotions involving Asian flavors can span the entire calendar year.” For example, Asian snacks and appetizers for the Super Bowl or holiday entertaining, low-cal Asian entrees in January when consumers are starting their New Year’s diets, frozen meal kits that can be combined with fresh vegetables picked at the height of summer. And the list goes on and on.
“And how about ‘It’s Asian Tonight!’ meal deals,” adds Tsao, citing the success of Mexican “fiesta” nights in many supermarkets.
Sheehy also urges retailers to include Asian foods in Frozen Food Month events, especially in combination with an FSI or in-store coupon. Pulling together with other manufacturers for a single promotion “makes the frozen aisle a focal point and communicates a lot of variety to the consumer,” she explains. “I prefer those to doing a promotion on your own and trying to break through the clutter.”
“Any retailer can become a destination for Asian foods,” concludes Zalke. “They just need to make a stronger commitment to giving Asian a prominent place in their merchandising calendars, schematics and menus.”
Manufacturers say stores with club pack sections would benefit by putting them adjacent to snacks and appetizers because so many of the large-size items are snacks and appetizers. The theory is that if club packs were beside the frozen snacks and appetizers, retailers could probably get a lot more consumers to trade up to the larger sizes.
7 Steps to Better Sales Asian Foods
1. Look at space to sales; is the category under-represented?
2. Consider a dedicated Asian section, as there may already be for Italian or Mexican foods.
3. Remember that you don't need a sizeable Asian population to sell a lot of Asian foods.
4. Promote Asian-style wraps that fit with "on-the-go" eating trends.
5. Look for new packaging sizes, and launches of upscale, all-natural items.
6. Cross-merchandise popular "go-withs" such as rice, sauce, fresh and frozen vegetables, and proteins.
7. Promote year-round especially snack items that fit well with Super Bowl parties and other events.
ASIAN FOODS SCORECARD
ACNielsen's snapshot of sales in supermarkets, drug stores and mass merchandisers (excluding Wal-Mart) for the 13 weeks ending June 17, 2006, vs. the same year-ago period.
• DOLLARS
Frozen dinners, Oriental: down 4.4% to $6,216,224
Frozen entrees, Oriental: up 3.1% to $119,714,422
Frozen/Refrigerated meal starters, Oriental: up 5.3% to $5,731,437
• UNITS
Frozen dinners, Oriental: down 8.9% to 2,408,792
Frozen entrees, Oriental: up 1.0% to 46,171,014
Frozen/Refrigerated meal starters, Oriental: up 2.4% to 1,655,133
• EQUIVALIZED VOLUME*
Frozen dinners, Oriental: down 9.2% to 1,817,028
Frozen entrees, Oriental: up 0.4% to 34,463,128
Frozen/Refrigerated meal starters, Oriental: up 1.1% to 2,196,658
*Unit volume on a 16-ounce basis
I love hearing from people who have experienced special occasions at the restaurant. I only hope that we can provide a 1/10 of that emotion in the foods we offer today. If I can bring a smile to your lunch or snack, then I've done my job.
