While Australia celebrates cultural diversity, new research shows that grocery manufacturers need to step up their game to better meet the needs of multicultural shoppers. With product disloyalty among consumers at an all-time high globally, the biggest grocery manufacturers in Australia have a lot to lose if they don’t improve the resonance of their products with ethnic shoppers. On the flipside, the opportunity is big, particularly with respect to Asian-born Australians (which make up 43% of ethnic households), as three-in-four say they would shop more at mainstream supermarkets if stores increased their international range of products.
Data from the Australian Bureau of Statistics (ABS) shows that three-in-10 Australians were born overseas, and this number is expected to keep growing. Much of that growth will come from Chinese-born and Indian-born consumers, and we anticipate that these two groups will grow the most between now and 2027, at which point they will respectively account for 12% and 10% of the total ethnic population. Consequently, understanding the unique motivations and behaviours of these and other ethnic Australian shoppers is one of the keys to overturning the low growth environment of Australia’s traditional grocers.
UNDERSTAND HOW WELL PRODUCTS RESONATE WITH SHOPPERS
There is a gap for grocery manufacturers between the products they offer and the resonance they have with ethnic shoppers. Ethnic-Australians represent 29% of the Australian population, and Nielsen Homescan research shows that they are under-valued as a group, especially when looking at the products offered to them in traditional grocery retailers (supermarkets, convenience stores, butchers, bakeries, etc). That means that products from the top manufacturers in Australia’s traditional grocers are less likely to make it into ethnic-Australian households.
KNOW THE SHOPPER
Secondly, the motivations and shopping behaviours of Ethnic-Australians shoppers are clearly distinctive from the overall Australia population in two major ways:
- They’re highly price-sensitive: Ethnic Australians allocate 47% of their grocery spend for promoted products, compared with 40% among the total population. To address this, brands need to ensure that the shelf and promoted pricing for their products are competitive when compared to the wider product repertoire of ethnic Australians shoppers.
- They carefully examine their products: This spans a range of behaviours including tendencies toward organic foods and vegetarian diets, avoiding overly processed foods, and checking product labels. For food manufacturers, this means creating products with ethnic shoppers in mind.
REACH SHOPPERS WHERE THEY ARE
Product distribution is another aspect of the equation, and one that has a direct impact on whether products land in shoppers’ pantries. For manufacturers, this may mean forging new relationships with non-traditional grocers or working with existing retail partners to ensure that ethnic products are featured in the right stores.
From a distribution perspective, Chinese-born and Indian-born consumers (the drivers of population growth) are most likely to live very different locales. Chinese communities are more likely to live in suburbs like the central business district of Central Melbourne, Hurstville, Rhodes, Eastwood and Carlton, while the Indian community is more likely to live in suburbs like Westmead, Parramatta, Wentworthville, Rosehill and Pendle Hill.
Ethnic Australians are an untapped opportunity for the Australian grocery sector. Embracing their differences, truly understanding their needs and motivations, as well as where they shop and what they are looking for is the key to unlocking new growth for both brands and retailers.
ABOUT NIELSEN HOMESCAN ETHNICITY PANEL
Online shopping, smaller basket shopping trips, products for ethnic shoppers, health & nutrition, and fresh foods are five of the key growth areas for Australian retailers and grocery brands. As consumers change, Nielsen is enhancing our Homescan panel to continue providing the best read in the market, ensuring our household representation and methodology captures the ever-changing consumer landscape.
Our panel members are from various ethnic and cultural backgrounds. We’ve enhanced our design and recruitment targets to build representation across key ethnic population groups for people who are born in North Asia, South East Asia, Southern & Central Asia, Middle East & Africa, Oceania & Antarctica, Europe & America, United Kingdom, China, India, Australia, and New Zealand.