Ethnic foods, once considered niche, are now mainstream staples in American households, reshaping how grocers approach product offerings.
The ethnic food market in the U.S. has seen remarkable growth in recent years. In 2023, it was valued at approximately $27.2 billion and is expected to reach $52.1 billion by 2032, growing at a compound annual growth rate of 7.47%.
This growth is driven by several factors, including increasing immigration, globalization, and a rising interest in authentic culinary experiences among consumers. As more Americans seek to diversify their meals, ethnic foods have become an essential part of grocery store shelves.
This trend is also reflected in specific sales data. For instance, ethnic aisle revenues in the U.S. reached $8.84 billion for the 52 weeks ending June 16, 2024, with unit sales up 0.8% and dollar sales increasing 4.3% compared to the previous year.
The combination of consumer curiosity about global flavors and the cultural ties of immigrant communities has created a robust market for ethnic foods.
One of the most significant ways grocery retailers, both dedicated ethnic supermarkets and major chains, are succeeding in the growing ethnic food market is by tailoring their inventories to reflect the cultural preferences of local communities.
This approach not only helps meet the dietary and cultural needs of immigrant populations but also attracts a broader audience eager to explore authentic ethnic cuisines.
Among the various ethnic cuisines, certain categories are experiencing especially rapid growth. Mexican and Hispanic foods remain at the forefront, driven by the purchasing power of Hispanic consumers and the broader American population’s love for Mexican cuisine.
Dishes like tacos, burritos, and quesadillas are now standard fare in many households, while specialty items such as tamales and mole are gaining popularity.
Asian cuisines, including Chinese, Japanese, Thai, and Indian, are also growing rapidly. This trend reflects both the relocation of Asian communities to the U.S. and the increasing mainstream acceptance of Asian flavors.
Products like sushi, ramen, and curry pastes are now common in grocery stores nationwide, with many consumers actively seeking these items for their authenticity and flavor.
Middle Eastern foods have also seen a surge in popularity, with items like hummus and falafel becoming household staples. Hummus, in particular, has seen widespread acceptance, with reports indicating that by 2016, it was present in 25% of U.S. households.
The rise in demand for ethnic foods has significantly influenced the strategies of major grocery retailers.
Walmart, the largest grocery retailer in the U.S., has adapted by expanding its international food sections to cater to diverse consumer preferences. The availability of ethnic products in Walmart stores often reflects the demographic makeup of the surrounding community, allowing the retailer to tailor its offerings effectively.
Kroger has gone a step further by introducing specialized store formats, such as its "Asian Experience" stores in North Texas. These locations offer products tailored specifically to Asian cooking and aim to appeal directly to the growing Asian-American population in the region. Similarly, Whole Foods Market has long been a leader in offering diverse ethnic and specialty foods, contributing to the mainstreaming of many international cuisines in the U.S.
Beyond traditional grocery retailers, specialized ethnic grocery chains have gained prominence by offering authentic products that resonate deeply with immigrant communities and adventurous eaters.
H Mart, for example, has grown into the largest Asian supermarket chain in the U.S. Initially serving a niche market, H Mart has expanded its appeal to a broader audience, becoming a destination for those seeking authentic Asian ingredients and products.
Brands like Siete Family Foods exemplify the entrepreneurial success of ethnic food providers. Founded in 2014, this Mexican-American brand now supplies products to over 37,000 retailers and restaurants across the country, showcasing the increasing demand for Mexican-American staples like tortillas and grain-free snacks.
While the growth of ethnic food sales offers numerous opportunities, it also presents challenges for retailers.
Ensuring the authenticity of ethnic products requires navigating complex supply chains and understanding the cultural nuances of the cuisines they represent. Retailers must also educate consumers about how to use these products, often through in-store promotions, cooking demonstrations, and online content.
The rise of ethnic grocery stores has introduced competition for traditional grocers, compelling them to innovate and expand their offerings. Success in this space often depends on a retailer’s ability to collaborate with ethnic food providers and engage with multicultural communities.
The influence of ethnic grocery stores and products is reshaping the U.S. grocery landscape. Major retailers like Walmart, Kroger, and Whole Foods are responding by diversifying their offerings and, in some cases, creating specialized formats to meet the demand for ethnic foods. At the same time, the emergence of ethnic grocery chains highlights the market's potential for growth and innovation.
Dedicated ethnic supermarkets, such as H Mart, El Super, and Patel Brothers, excel in tailoring their product offerings to the cultural preferences of specific communities. These stores often go beyond food to provide a wide range of culturally significant items, from cookware and spices to religious artifacts and specialty beverages.
H Mart, the largest Asian supermarket chain in the U.S., stocks shelves with Korean staples like gochujang, kimchi, and rice cakes, alongside Japanese, Chinese, and Southeast Asian products to cater to a diverse Asian-American audience.
Similarly, Hispanic-focused chains like El Super and Northgate González Market serve as cultural hubs for Latino communities. These stores feature fresh produce, meats, and baked goods aligned with Hispanic culinary traditions, such as pan dulce, marinated carne asada, and tamales.
Many ethnic supermarkets also import products directly from countries of origin, ensuring authenticity and preserving the connection to home for immigrant families.
Major grocery chains, including Walmart, Kroger, and Albertsons, have increasingly adopted localized inventory strategies to serve diverse populations better. These chains use data analytics, market research, and demographic studies to tailor their offerings based on the cultural composition of neighborhoods surrounding their stores.
For example, Walmart adjusts its inventory in areas with significant Hispanic populations to include products like tortillas, salsa, plantains, and specific brands preferred by Latino consumers. In areas with a large South Asian population, Walmart locations may stock basmati rice, curry pastes, and spices like turmeric and cumin, alongside traditional American staples.
Kroger, which operates more than 2,700 stores across the U.S., has embraced this hyper-localized strategy.
Its "Asian Experience" stores in North Texas, for instance, offer products specific to Asian cuisines, including fresh fish for sashimi, various types of soy sauce, and rice varieties not typically found in standard grocery stores.
This initiative reflects Kroger's broader strategy of tailoring inventory to meet the unique needs of local communities while providing a one-stop-shop experience for both ethnic and non-ethnic consumers.
Beyond inventory, many ethnic supermarkets and mainstream grocers customize the in-store experience to align with cultural practices.
For instance, ethnic supermarkets frequently organize their stores to mimic traditional markets from their communities of focus, creating a familiar and welcoming shopping experience. They may also feature bilingual signage, music from the home culture, and employees who speak the primary languages of their customer base.
Mainstream chains like Kroger and Albertsons have also implemented culturally tailored merchandising strategies.
In stores serving Hispanic communities, for example, it’s common to find an expanded meat counter offering pre-marinated options popular in Hispanic cuisines, such as fajitas and carnitas. In Asian-focused stores, fresh seafood counters might feature live fish tanks and specialty items like whole shrimp and squid.
Both ethnic supermarkets and major chains adapt their inventories during cultural holidays and festivals to reflect the traditions of the communities they serve. For example, during Ramadan, stores catering to Muslim populations may stock dates, a traditional food for breaking the fast, along with increased selections of halal meats and desserts like baklava and qatayef.
Similarly, stores serving Chinese communities ramp up their inventory for Lunar New Year, offering items like nian gao (sticky rice cake), red envelopes for gift-giving, and symbolic fruits like oranges and tangerines.
Hispanic-focused stores prepare for Día de los Muertos by stocking traditional items like sugar skulls, marigolds, and pan de muerto.
Technology plays a pivotal role in helping both ethnic supermarkets and mainstream chains identify and respond to the needs of local populations. Retailers use data analytics to track purchasing patterns, analyze demographic trends, and forecast demand for specific products. This allows stores to optimize inventory, ensuring that culturally significant items are always in stock.
For instance, Walmart’s robust data infrastructure enables it to adapt product offerings dynamically based on real-time sales data and demographic shifts. Kroger’s use of loyalty card data provides insights into customer preferences, allowing the chain to introduce new ethnic products or adjust inventory levels in response to changing consumer tastes.
