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American consumers are continuing to embrace Asian-style foods by driving strong, double-digit sales growth in the category, supported by the innovative, authentic product assortments of leading brands and the additional demand being created by a proliferation of Asian-style menu choices in more and more restaurants.
Sales growth in dinners and entrees, and snacks and appetizers featuring Asian-style ingredients, tastes and textures has been consistently strong for several consecutive years, and senior executives from several leading brands predict more of the same for 2008.
The individual product lines from those brands, Kahiki Foods, Discovery Foods, RT Foods, and the Hain Celestial Group, reflect an emphasis on great-tasting products that offer the convenience of easy preparation, but more and more leading brands are also emphasizing products that are authentically Asian. And some promote the all-natural choices in their respective assortments. Some brands also show a different strategy on single-serve versus multi-serve products.
Yet another indicator of category growth is the merger of companies for the stated purpose of expanding distribution and allowing greater investment in marketing support and new product development. Two prime examples are Kahiki's merger with Abarta in 2007, and Discovery Foods' merger with VIP Foods late in 2006.
Appetizers: Convenience and Snacking
Kahiki Foods, Gahanna, Ohio, plans to launch three new SKUs in appetizers this year, but Tim Tsao, vice president of sales and marketing, says it would be premature to provide details of the products.
"The appetizer category is now all about convenience and snacking, and no one has done what we are doing. We will have three new SKUs in March. We have also released four products in family items in the 32 oz. size. The multi-serve side has been explosive [in its growth] and we will continue to build out that section. We now have a strong offering in our 42 oz. and there is the new 32 oz." he explains. The four newest additions in the 32 oz. size are: General Tso's chicken, chicken fried rice, sesame orange chicken, and sweet & sour chicken.
"As we look at the coming year, we are super-excited to see the development of Asian flavors outside of the grocery store, with restaurants building out those flavor profiles," says Tsao, noting several casual dining restaurant chains that have made Asian-style foods a mainstay of their menus.
Commenting on Kahiki's merger with Abarta, he observes, "We are not fully through the integration into Abarta. They have invested in us and we have continued strong sales in 2007. We had double-digit growth this year and our plans are the same for the coming year. We are stronger, financially, than we ever have been, and stronger from an operational standpoint than we ever have been."
After an active year in new product launches, during which RT Foods introduced a tempura-like crunchy shrimp with gourmet panko bread, and a shrimp and vegetable nest—all under its Tiger Thai brand—the company closed out the year with a new Mandarin orange shrimp and a tempura udon soup—a frozen product that comes in a kit, says Jeff Krause, president of RT Foods, Scottsdale, Ariz.
"When you look at a restaurant menu or a new restaurant, they typically have some Asian flair to them. It's not unusual for a non-specific or general restaurant to have an Asian influence. People are eating more Asian foods. The common thread between those menu items and our products is the restaurant quality. All RT Food items are handmade. Some consumers who buy frozen foods want restaurant quality, but others buy on price. Our customers are particular about quality, and that comes into play when they are trying to find meal replacements. Tiger Thai is positioned to give that more affluent customer the option of spending more to get high-quality, great-tasting choices," says Krause.
The Hain Celestial Group, Melville, N.Y., recently added new Asian-style products to its Ethnic Gourmet brand of international foods. The product line spans the globe with Southwestern cuisine, along with Italian, Greek, and Indian dishes. However, the assortment also represents Asian foods that trace their ethnic roots to specific origins such as Thailand, Malaysia, Vietnam and Singapore.
Its new Taste of Malaysia is a chicken curry with coconut curry sauce, red bell peppers and jalapenos over brown rice. Kaeng Kari Kai, the newest addition to the Taste of Thai line, is white meat chicken in a coconut curry sauce with vegetables over brown rice, topped with cilantro and pineapple.
All of Ethnic Gourmet's 10 oz. entrees are all natural and feature authentic recipes, says Kim McGowan, brand manager, Hain's frozen food division. "Our all-natural foods are an important point of differentiation, as well as being authentically ethnic. Being all-natural and authentic really sets us apart. We are not a mainstream brand; we are truly very ethnic," she says.
Following the merger of Discovery Foods (also known as Ling Ling) and VIP Foods, with its Tai Pei brand, the resulting company, now headquartered in Hayward, Calif., is "the second largest provider of Asian entrees, snacks and appetizers," reports Richard Werhel, executive vice president of sales and marketing.
"Discovery and VIP were combined to make us a stronger company, grow our brand and grow our retailers' business more quickly," he explains, adding that he expects the company to benefit from economies of scale and additional product distribution.
Both brands, Ling Ling and Tai Pei, will be retained because, "both brands have value from the consumer and the retailer perspective," says Werhel.
New products will be introduced for both brands this year. "We plan to support our brands more aggressively," he adds.
"One of the purposes of combining the two companies was that it allows us to utilize the full resources of the company to grow. I expect us to build both brands across retail. Today, Ling Ling and Tai Pei may be with the same retailer. There could be some duplication, but we have not decided the strategic direction the brands will take. We could see both brands having appetizers and entrees at some point," says Werhel.
Bring 'em On
The prospect of increased competition from new or expanding players in the Asian food category is greeted enthusiastically by Krause of RT Foods and Tsao of Kahiki Foods.
"I think the increased competition is positive; the more the merrier. We compete very well with what we do. Consumers are looking for quick and easy meals with the different tastes and textures of Asian food," says Krause.
"The critical issue for all vendors is always shelf space. I think the retailers who are willing to devote a little more space to the category are seeing a definite increase in sales. I think the category is being under-played because Asian food products are a little complicated, but specialty companies like ours are interested in doing these products," he says.
Speaking of the increased number of competitors, Tsao says, "I love it. I welcome the competition because it grows the pie. We need to have a very diverse selection of manufacturers offering good frozen Asian food to build out the category. One company, like Kahiki, is not enough and retailers recognize that. We are on the forefront of building a category that is going to be a mainstay of American food—like Italian food, but we need help. We need competitors to do the same things and grow this pie."
author: By Michael Hartnett