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Diversification Drives Growth in the UK Ethnic Foods Market

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Diversification Drives Growth in the UK Ethnic Foods Market

Diversification Drives Growth in the UK Ethnic Foods Market
November 06
10:43 2014

According to Ethnic Foods Update, a new Market Update from market intelligence provider Key Note, the UK market for ethnic foods continued to exhibit year-on-year growth in 2013, following a 3.2% increase in total sales value from 2012. While this growth was spread across all categories, it was primarily driven by smaller, emerging sectors; the market continues to diversify as an adventurous consumer base continues to experiment with new global cuisines. As such, the Thai and Caribbean food sectors, as well as the other ethnic foods category — which includes niche ethnic foods such as Japanese food, African food and Indonesian food — expanded at the most substantial rate in 2013.

This process of market diversification can partly be explained by the issue of authenticity, which is a key driver in this market. At one level, the growing number of Britons visiting countries such as Thailand is enhancing consumer exposure to global cuisines. Closer to home, there is a complex relationship between the foodservice sector and the retail sector; the dishes served by restaurants and home-delivery outlets contribute to the perception of authenticity in this market. Consumers want to recreate the dishes that they know at home and this limits the potential for certain new product developments (NPDs), especially in mature categories, such as Indian food.

In addition, the declining popularity of cooking sauces has restricted growth potential in the leading Indian and Chinese food sectors, thereby benefitting smaller market sectors. On one hand, cooking with the use of recipe kits or pastes has become more popular. These products are perceived to be more authentic and a better way of regulating ingredients than cooking sauces, while consumers increasingly enjoy the emphasis on cooking individual ingredients rather than pouring a sauce into a pan. On the other hand, ethnic food ready meals are exploiting the demand for convenience, which is also restricting sales of cooking sauces. Recipe kits, pastes and ready meals offer smaller sectors, such as the Thai food sector, an opportunity to exploit these demands, rather than investing in NPDs for the cooking sauce aisle, which is saturated with Indian and Chinese products. As such, while both these leading sectors exhibited growth in 2013, performance was fairly subdued, with both categories aiming to exploit the demand for increasingly spicy foods and the ongoing demand for convenient mealtime solutions.

Increasing variety within the marketplace is fuelling growth rather than dispersing sales, bolstering the robust nature of the sales base. The versatility of the total UK ethnic foods market has allowed it to successfully exploit current consumer trends, despite dynamic sales performance in competing market sectors; this has fuelled steady growth over the last 5 years. Key Note expects this growth to continue throughout the next 5 years, as an increasingly varied selection of ethnic foods become more popular in the UK. Key Note therefore forecasts growth of 14.8% between 2014 and 2018.

Key Note’s 2014 Ethnic Foods Market Update is available to purchase for £395.

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