Continental Shift

August 17, 2009
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When it comes to Asian cuisine, today's consumers aren't just familiar with items such as lemongrass and terms such as "ginger glazed"; -- they also are purchasing a wider variety of pan-Asian foods, including private label offerings on the shelf and in the refrigerated and frozen cases of their local supermarket.

If you had polled Americans a generation ago about their favorite Asian foods, they would have been likely to cite ramen noodles and soy sauce.

Today, North American consumers aren’t just familiar with items such as lemongrass and terms such as “ginger glazed,” they also are purchasing a wider variety of pan-Asian foods, including private label offerings on the shelf and in the refrigerated and frozen cases of their local supermarket.

“Mainstream consumers have come to know that there [is more to] Asian foods than Chop Suey and Egg Foo Yung, and that Asian food is not just Chinese but regionally defined as Thai, Japanese, Korean and even sub-sets of Chinese, Hunan and Szechwan,“ says David Tsang, president of Starport Foods LLC, Fullerton, Calif.

Other suppliers agree that Asian foods now are more geographically representative. “Consumers are seeking more sophisticated flavor profiles … such as Thai and Vietnamese and Indian flavors,” says Margaret Liang, marketing director for W.N. Foods, Hayward, Calif., noting that more opportunities exist today for people to consume a greater diversity of foods.

“I am not surprised at the increasing interest, as Asian has become the third-largest ethnic cuisine in the U.S., after Italian and Mexican.”

The demand for more and different Asian foods can be attributed to multiple trends, from the less-sensitive taste buds of aging baby boomers to the rise of celebrity chefs.

“I think people are more willing to try new flavors - including anything that sounds more exotic,” notes Linh Hoang, vice president of marketing for St. Louis-based Golden Phoenix Foods. “The exposure is all over the place, too, whether it’s the media, Food Network and even restaurant chefs who are getting more creative and mixing different fusion ideas.”

Not to be discounted is the growing U.S. Asian population and increased business travel to the Asia-Pacific region. As Tsang notes, the number of Americans identifying themselves as having Asian heritage grew 72 percent between 1990 and 2000. The latest U.S. Census Bureau data show 14 million Americans with Asian ties in this country.

As talk about the globalization of flavors plays out at the retail level, test kitchens and research and development departments, many manufacturers that specialize in Asian products are busy developing new products. For his part, Tsang cites statistics showing the Asian category in the grocery channel grew by 6 percent for a year-over-year period ending in 2007.

The scope of such offerings is increasingly evident in store.

“Many supermarkets now have a whole section dedicated to Asian foods,” reports Peter Lee, national sales manager for Water Lilies Food, Astoria, N.Y. “In that full section, there are traditional soy sauces, like those you’d find in Asian supermarkets, and other traditional products like sesame oil.”

Concurrently, as private label sales have increased across the retail sector and gained a new following in the wake of the ongoing deep recession, manufacturers of various Asian products are penetrating new markets and rolling out new items destined for private label packages, from ingredients such as sauces, rice and noodles to products for the growing frozen appetizer and meal kit segment.

“The economic downturn has driven consumers to reduce trips to the restaurants and seek products from the supermarkets that can deliver restaurant flavors to home tables. Our products, whether bottle sauce products or meal kits or noodle bowls, serve a convenient and more economic venue to serve that purpose,” Liang observes.

That move from away-from-home dining to at-home meal preparation is underscored by Dan Van Gompel, director of national sales and marketing for Day-Lee Foods, Santa Fe Springs, Calif.

“With the economy the way it is, more people are opting to stay home, and they are looking for value, quality and ease and convenience,” he says.

Private label products with an Asian flair are appealing for their nutritional benefits as well.

“The interest in Asian cuisines [has] shown a nice growth over the past few years and continues to grow even during the economic downturn because consumers are seeking healthier and exciting flavors,” Tsang says.

Where East Meets West

Although consumers are experimenting with new flavors and have a broader food vocabulary, that’s not to say that the most authentic Asian dishes now are available in a heat-and-serve meal kit sold under a store brand. It’s more of an evolution than a revolution, manufacturers say.

“I think there is still a gap between authentic flavors,” Lee asserts. Most of the Asian meals are slightly Americanized.”

Hoang agrees that the pace of both consumer interest and manufacturer R&D is picking up, yet truly authentic profiles are not quite mainstream.

“There is a group of people who are willing to try new things, but there are consumers who like what they like,” she comments.

To that point, many of what would be considered classic Asian foods remain best-sellers on the private label side of the retail business. To this end, Hoang says that Golden Phoenix Foods produces a lot of crab rangoon and breaded sweet and sour chicken heat-and-serve products.

Likewise, Van Gompel indicates that more Americanized Asian-inspired foods are moving into the grocery channel, including into private label offerings.

“The traditional restaurant items are the ones that sell the best for us, like our entrée items like teriyaki chicken and broccoli beef,” he says.

Even though classics remain swift sellers, manufacturers and retailers must walk the line between offering consumers exciting and relevant new products and giving them the traditional meals and ingredients they have come to expect and like.

For instance, as part of its line of shelf-stable private label Asian sauces, Starport Foods offers classic Hawaiian sweet and sour, as well as a new Wasabi Samurai Ponzu (a spicy citrus-flavored soy sauce for dipping or for fish), Tsang says - and a Filipino Kare-Kare sauce (a peanut-flavored sauce). In addition, Starport is set to launch a frozen ready-to-heat short-grain sweet rice with mushrooms and Korean greens for private label.

According to Tsang, the decision about what products to introduce can be as delicate of a balance as ingredients in a recipe.

He points out that the challenge is “to define and understand each ingredient and the [combination] that produces the unique regional flavor of the dish” and to “reformulate the product to develop a flavor that will be acceptable to the mainstream consumers without losing the authenticity.”

Meanwhile, Van Gompel says Day-Lee is moving a lot of volume of favorite items, but is also working on new authentic items, such as a Chicken Shu Mai and some Asian soups.

The ramped-up production on the part of manufacturers is, not surprisingly, resulting in an expanded selection of private label Asian foods within the supermarket. In addition to the dedicated grocery section of shelf-stable items and freezercases lined with heat-and-serve meal solutions, you’ll find Asian-inspired desserts such as green tea ice cream from both the national brands and private label.

Another major area of the store in which Asian-inspired and authentic Asian dishes can be found is the in-store deli. Hot food bars and buffets, especially at stores known for their gourmet offerings, often include classic Asian dishes such as teriyaki chicken or beef, as well as more “modern” meals such as Pad Thai, lemongrass soup and Indian curry dishes.

Traditional deli counters carry more Eastern dishes these days, too, whether it’s a basic egg roll or something more exotic such as ginger-glazed cooked salmon filets, marinated tofu cubes or Korean barbecue ribs.

Beyond new flavor profiles - and in a trend also indicative of the overall retail marketplace - grocery shelves are widening to include more natural and organic Asian food offerings, including some private label SKUs. Water Lilies Foods, for its part, has recently added new organic and all-natural products to its lineup. Meanwhile, Starport’s Tsang reports that his company is working on some all-natural organic and kosher products.

The natural movement is impacting packaging, too. At W.N. Foods, Liang reports that retail customers are asking for more environmentally friendly packaging.

Sales Culture

Although retailers have focused more on eye-appealing packaging for private label in recent years, cost remains an issue.

“Packaging is pretty much up there with the national brand packaging, but private label customers also want to save on costs,” Lee says. “We don’t want to put unnecessary costs on them, so it’s a balance between the two.”

Retailers also are changing the way in which they merchandise private label Asian food products. In addition to easy-to-find ethnic sections in the grocery section, freezers also are beginning to make more sense from a shopper perspective.

“Retailers are starting to see it better categorized - rather than just appetizers with appetizers, they are starting to group it closer together. The goal is to have a destination category,” Van Gompel remarks.

As the benefit of store brands becomes more evident, especially in this economy, more retailers are looking at and investing in private label programs that reflect the diversity of their respective customer bases. Most manufacturers that supply Asian and Asian-inspired foods say the bulk of their business comes from major chains with multiple stores, but some note that smaller regional chains also are investing in private label.

“Besides the bigger chains, we do a lot of independent stores, and many of the smaller stores do a lot of volume,” Lee says. “If a store has only one or two locations, it is kind of difficult, but a lot of them have 15 or 20 stores, and they do private label well.”

Hoang concurs that private label programs can work successfully, given the right situation. “You have to see whether it makes sense. It is extra work for the manufacturer, so it has to be enough to be worthwhile,” she points out.

To set their stores apart from the proverbial pack, as the competition grows more intense, a growing number of retailers are going for tailored product lines as part of their selling strategy.

“We do a lot of customization, because it’s not just one product that fits everyone. We try to make it different and as long as the volume is there with private label, we are flexible,” Lee relates.

Finally, the cross-culture trend is evident in the relationships that exist between Asian food companies in the United States and their suppliers in various Asian countries. According to Tsang, Starport Foods relies on a network of Asian manufacturers that can help create formulations, including those for private label. And manufacturers also report a widening export market for private label products made in the United States (and Canada). PLB

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