In response to the continuing ethnic evolution documented by Census 2000, food and restaurant marketers have expanded their palates to reach growing Hispanic and Asian populations. At the same time, marketers are broadening their offerings to the general market to include new flavors and stronger tastes.
New 'melting pot'
In effect, the U.S. market has become a true "melting pot" in which formerly "exotic" tastes and foodstuffs are becoming part of the mainstream norm.
Even chicken soup stalwart Campbell Soup Co. is getting in the game. Its Stockpot subsidiary, a supplier to restaurants, is planning to launch a three-item line of Asian-flavor sauces and soup bases, including a Vietnamese broth called pho. So far there's no indication that the red-and-white label will include pho, but Stockpot acknowledges that Campbell's foodservice units serve as test kitchens for future grocery products.
"The Away from Home division is a way for Campbell to keep its eye on new flavor trends, so as these trends emerge there is always an opportunity to incorporate them into retail products," says Kathleen Horner, Stockpot's president.
Unilever recently introduced a five-item line of Lipton Asian-flavor side dishes, including beef lo mein noodles and sweet and sour noodles. And General Mills' Pillsbury Co. markets a flavor of Haagen-Dazs ice cream called Dulce de Leche, a caramel and cream confection inspired by a Latin American dessert.
Focused Hispanic marketing
There also are growing efforts to market more directly to Hispanics. Gatorade Co.'s new Xtremo sports drink features flavors like mango and tropical punch. PepsiCo sibling Frito-Lay recently launched a new version of Doritos aimed at Hispanics in the U.S. And Doctor's Associates' Subway Restaurants has been steadily ramping up a Hispanic ad campaign from Havas' MVBMS Hispanic, New York, that launched last year. The campaign now accounts for about 5% to 10% of Subway's overall ad budget, says Chris Carroll, director of marketing for the Subway Franchisee Advertising Board.
All this activity is coming about because the census is showing a dramatic rise in the Hispanic and Asian populations in the U.S. In 1990, 9% of the U.S. population identified themselves as Hispanic and 2.9% as Asian or Pacific Islander. By 2007, nearly 15% of the U.S. will be of Hispanic ethnicity and nearly 5% Asian, according to projections from market researcher SRC.
Kraft: 'You've got to change with it'
Some marketers, like Kraft Foods, have used the new census data to confirm what they already know. "Fundamentally, the country is changing, and to be where consumers want to be, you've got to change with it," says Linda Crowder, director of multicultural marketing.
Kraft products such as Mayonesa con Limon (mayo with lemon) and Gelatina par Leche (Jell-O with milk), both introduced in the past year, aim squarely at U.S. Hispanic tastes.
Hispanic consumers spend nearly 25% more than other consumer groups on food consumed at home, according to researcher Packaged Facts. That's because Latino families tend to be larger and there's more focus on eating a meal at home.
Ethnic groups are "your biggest growth market," says Thomas Tseng, director of marketing for Cultural Access Group, a Los Angeles ethnic market researcher.
Black population to remain flat
While the black population is expected to remain flat, representing about 12% of the population in 2007, according to SRC, it carries great weight. Among all U.S. ethnic groups, Mr. Tseng says African-Americans possess the greatest purchasing power at $572 billion.
"This consumer group often gets overlooked or is lumped in together with the general market since language is not an issue -- most marketers think they reach this group with their general-market strategies, but they don't," he says. "African-Americans possess distinct cultural attributes and affinities that translate into distinct food preferences and shopping behaviors. They shop more frequently, spend more money on food purchased at home, and are responsive to advertising aimed at them."
Mr. Tseng also predicts that soy-based products will continue to increase in popularity, both because of nutritional benefits and the fact that soy is a base for many Asian cuisines. Other observers see the opportunity for mass-market Asian meal kits. Online retailer EthnicGrocer.com offers such kits for Thai, Indian and Japanese cuisines. Kraft is a minority investor in the company.
Ethnic food and restaurants
In the restaurant business, ethnic foods are getting even wider play. Concepts like the 43-unit Noodles & Co. chain have taken off. Wendy's International, in addition to expanding its Hispanic marketing efforts, in May said it would acquire Baja Fresh Mexican Grill, a chain of casual Mexican restaurants.
According to the National Restaurant Association, the number of Mexican and Chinese restaurants in the U.S. each grew by 26% in the 1990s, showing that Americans' tastes for those foods haven't waned.
When it comes to marketing to ethnic groups, restaurant chains are some of the biggest spenders. McDonald's Corp. was the No. 9 Hispanic advertiser overall in 2001 and the biggest food product advertiser, spending $27 million, according to Hispanic Business. That's still only a small slice of McDonald's $1 billion-plus in total ad spending.
In the end, food and restaurant marketers will still look for trends that can grow their business overall, not just in one niche.
"What drives marketers is size," says Harry Balzer, a vice president of food research at NPD Group. "It's really not the size of [an ethnic] group but how does that translate to the behavior of a larger group."