Executive Summary

Over the past decade, ethnic foods has become one of the most dynamic and lucrative sectors of the UK packaged grocery trade. Since 1990, the value of the ethnic foods retail market has increased by 108%, reaching £520m in 1996. The current boom in ethnic foods has been fuelled by the continuing trend towards convenience foods and snacking, as well as by the increased culinary experimentation of consumers.

The three most popular types of ethnic foods in the UK are Indian, Chinese and Mexican. Indian is the largest of these sectors, taking 45% of the total market, with retail sales of £234m in 1996. Chinese foods have a value share of 31%, with sales of £161m; while Mexican cuisine took 11.9% of the market by value, with sales of £62m. Other fast emerging ethnic foods include Thai, Tex-Mex, Caribbean, Indonesian and Japanese.

The packaged ethnic foods market has become increasingly crowded in recent years, following the successful entry of many specialist suppliers into the mainstream retail trade. These include Patak (Spices) Ltd and S&A Foods Ltd. In addition, the major supermarket chains have also increased their own-label ethnic ranges.

The underlying trend is towards greater authenticity and increased product quality, while consumers have also developed a taste for hotter and spicier foods. The Balti craze has continued, with a proliferation of branded products, such as pastes, cooking sauces and ready meals coming on to the market. The past year has also seen Thai foods gaining a higher profile, with sales being boosted by the growth of Thai restaurants, and the popularity of foreign holidays to the country.

The ethnic adult snack sector has also been particularly buoyant, with new product innovations, such as ready-to-eat poppadoms, frozen Oriental Dim Sum savoury snacks, and flavoured prawn crackers.

Future prospects for the UK ethnic foods market look extremely bright, with retail sales forecast to grow to £814m by the year 2001.

The market will continue to be driven by convenience and innovation, but the real challenge lies in increasing purchasing and usage levels, through innovative marketing and increased product quality.

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