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The pleasing tastes and textures of Asian foods and the remarkable assortment of product choices they offer for snacks, appetizers, dinner and lunch is continuing to drive long-term sales growth that is consistently in double digits.
Although Asian foods defy simple description because they overlap so many other categories, they continue to attract a loyal following from consumers who want to enjoy high-quality restaurant offerings at home. And to the traditional appeal of frozen foods, with their emphasis on great taste and ease of preparation, these Asian foods also bring scores of choices for meal planners demanding something new, interesting and easy to prepare, whether their choice is seafood, chicken, beef, pork or vegetables.
Among the best known brands in Asian foods, success has brought increased activity. Kahiki Foods recently introduced seven new products under its Kahiki Naturals line. Schwan's Asian Sensations has introduced three new products that complement the brand's snack positioning. RT Foods will launch seven new products and three updated items under its Tiger Thai brand in the second half of this year. And VIP Foods' acquisition of Ling Ling, also known as Discovery Foods, has created a combined company that is among the largest in the category.
Category and Consumer Trends
Senior executives from several leading brands offer their insights on the reasons behind current sales growth, future growth potential driven by new product initiatives and innovative marketing programs, and the consistent appeal these products have for consumers.
"The American taste palate is becoming more sophisticated and more predisposed toward different types of cuisine from world cultures," explains Tim Tsao, vice president of sales and marketing for Kahiki Foods, Gahanna, Ohio. "The Asian category has a lot of unique items and delivery formats—from a spring roll and a pot sticker to steamed buns, and things like rice balls wrapped in banana leaves. I also think Americans are becoming more aware of regional cuisines. 'Asian' used to be Chinese, or Japanese sushi, but now it goes far beyond that. There's Thai, Vietnamese, Korean and South Indian. These cuisines and flavors are making their way into mainstream restaurants and grocery stores."
Overall category growth is "explosive," he notes, and points out that the sales of Asian and ethnic foods has increased four- or five-fold in recent years.
Although Tsao sees "Chinese" as a mature category among Asian foods, he points out that consumers are becoming much more aware of different regional tastes such as Szechuan, Funan, Mandarin and Cantonese. This increased sophistication by consumers is also having an effect on Kahiki's new product development.
At Schwan's Consumer Brands North America, Bloomington, Minn., Asian Sensations is positioned as "Everyday Asian for Every Occasion."
"Asian Sensations are hot snacks inspired by traditional forms and flavors of Asia and America that are innovative, approachable and have a strong appeal to a broad consumer audience," says Mark Jansen, vice president of product strategy. "The household penetration for mainstream snacks is 60% of American households, but only 11% for Asian products. One of the key learnings from the research we conducted is that frozen Asian products are consumed as mini-meals and as snacks. So the greatest opportunities lie outside of traditionally defined ethnic segments and more in the snacks segment."
The re-launch of Asian Sensations is supported by a "comprehensive, fully integrated marketing program that included national TV and print placements, couponing and in-store sampling to connect with consumers. These promotional elements served as critical touch points with consumers to effectively seed the message of 'Everyday Asian for Every Occasion.' All marketing communications were built around a consistent creative look intended to go beyond the mundane snack category and broaden usage of frozen Asian to more occasions, such as entertaining," he observes.
At VIP Foods and their Tai Pei brand, Steve Beck, vice president at the Tulsa, Okla.-based company, sees Asian category foods being driven by innovation.
"There is a tremendous amount of innovation occurring within the category. For many years the offerings remained very traditional. Today the consumer is encouraging companies to explore new and different tastes. The consumer wants to say, 'Wow!' when they try new dishes. Traditional thinking is definitely out. We have already launched items such as Bourbon Street Chicken that seem to fit well in the Tai Pei line and yet is not Asian. We think this will be the trend for the next few years—to bring Asian and other types of food styles together," he says.
"The category's double-digit growth is being driven by innovation. It's our job to continue to keep the consumers excited about the Asian category and to expand the category beyond its current levels," notes Beck.
For RT Foods, headquartered in Scottsdale, Ariz., company president Jeff Krause says its Tiger Thai brand has been generating consistently strong sales that match robust category growth.
"With the Asian category having double-digit sales for the past several years, that has certainly is our case. Our growth was above 10% for 2005 and 2006, so we are definitely in that area."
He credits category growth and that of his Tiger Thai brand to a growing interest by consumers to search out quality foods in grocery stores that they enjoy in restaurants. "They will simply substitute the grocery versions for restaurant meals and save money," he suggests.
New Products
The new Kahiki Naturals line was announced late last year, and began shipping in January. It marks the company's entry into the fast-growing natural and organic segment and is also having a significant impact on the company's choices for "clean" ingredients in its traditional product line.
The new Kahiki Naturals line consists of: General Tso's Chicken, Mandarin Orange Chicken, Szechuan Peppercorn Beef, Teriyaki Mixed Vegetables, General Tso's Chicken Wraps, Kung Pao Chicken Wraps, and Vegetable Shiitake Egg Rolls.
"Our Naturals line is going back to what Asian should be—truly healthy and truly flavorful, not high in MSG, sodium and the high fat that Chinese food has come to be in America. The Naturals has influenced our mainstream line very quickly. We wanted to streamline our operations and we needed to simplify the types of ingredients we use in as many individual products as we can. This simplicity is being accomplished without any sacrifice in taste. Our strategy, our future is in bringing to market more natural and cleaner ingredients," says Tsao.
The company is also generating additional sales through its "fourth meal" concept which promotes the enjoyment of Asian foods for more occasions. As Tsao describes it, this fourth meal is more than a snack but not a full meal. "It's a true meal occasion that people have come to want—smaller but more frequent meals. We have built this fourth meal occasion into our strategic plan," he adds.
Jansen, speaking of Schwan's positioning of Asian Sensations, observes, "We are continuing our efforts to seed Asian Sensations in mainstream snacks by bringing an Asian-inspired snack alternative to the masses. Our breadth of product offerings lend themselves to a variety of eating occasions and consumers are discovering how flexible these products can be in their lives.
Looking at future development of the brand, Jansen says that based on the current level of success, "we will continue to introduce new items to further complement our Asian Sensations' snack positioning."
VIP's Tai Pei brand currently offers more than a dozen entrees that are packaged in restaurant-style, take-out cartons. Entrée choices range from Beef & Broccoli, Cashew Chicken and Garlic Shrimp, to Teneral Tso's Spicy Chicken, Spicy Szechuan Style Chicken and Thai Style Peanut Chicken.
"The acquisition of Ling Ling now makes our two companies the second largest Asian food company," says Beck. "Our goal is to offer a complete Asian offering of products and to continue to build the entire category. Many retailers are combining the Asian snacks and appetizers with Asian entrees to leverage the category. We are seeing strong sales trends with this thinking."
Looking ahead in 2007, he says several new product introductions are already in the works. "We will continue to refresh the line to keep it exciting. However we are planning a launch of a complete line extension to the single-serve entrees later this year."
RT Foods, with its Tiger Thai brand, has built a loyal following by separating itself from the competition with tempura products and seafood, including its shrimp, cod filets and calamari rings.
"We built our company on unique items," says Krause. "Our philosophy is to create unique items and improve on an item that someone has in the marketplace. We look for opportunities in the seafood arena where we can apply our technology, our branding and our packaging. This year we are in the process of introducing seven new items and updating three new items."
Tiger Thai's newest introductions are: Shrimp Vegetable Nests, Crunchy Shrimp, Mandarin Orange Shrimp (in club packs), Shrimp Papaya Salad, Tempura Shrimp Udon, and a Shrimp Wrap. Three "improved" products are: Tempura Vegetable Medley, Spicy Thai shrimp, and Tempura Calamari Rings. With RT Foods' introduction of these new and improved products, and its decision to provide both retail and club pack versions in its lineup, the company has developed an assortment that offers literally dozens of options.
In-Store Merchandising
Based on the success of Asian foods and the loyal following they continue to attract, some of these same senior executives make the case for creating more of a destination section for this and other ethnic foods to drive incremental sales through greater visibility.
"I would like to see more of an emphasis on creating the ethnic experience," says Tsao of Kahiki Foods. "Center of the store dry goods have come a long way with multi ethnicity in one aisle—for Italian, German and English. They even have flags. But that approach has not been carried over to the refrigerated and frozen sections. We would like to see an ethnic destination, with banners or flags, and the more doors the better."
Beck, at VIP Foods, says "our biggest challenge is to convince retailers to break away from the traditional snack and appetizer section for egg rolls, spring rolls and pot stickers.
"This is a perfect way to suggest meal ideas to the consumer and build incremental sales," adds Beck.
author: By Michael Hartnett