British Food Journal

The Development of the Ethnic Food Market in the UK

Elaine Paulson-Box Peter Williamson
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Elaine Paulson-Box Peter Williamson, (1990),"The Development of the Ethnic Food Market in the UK", British Food Journal,
Vol. 92 Iss 2 pp. 10 - 15
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 10 BRITISH FOOD JOURNAL 92,2
W
hat is "ethnic food" and why is the
market for it growing?
The
Development
of the Ethnic
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Food Market
in the UK
Elaine Paulson-Box and Peter Williamson
Introduction
One of the major developments during the past decade
in the UK food industry has been the move towards
greater variety and added value in the products consumed.
Epitomising this development is the explosive growth of
the market for fast, convenience foods, a growth which
is well documented (Mintel, 1989a; Euromonitor, 1989;
Keynote, 1987). By comparison, the documentation on
the equally rapid growth of the ethnic or non-traditional
food market tends to be sparse. The diverse nature and
definition of these products also make it difficult to obtain
accurate market sizes (Keynote, 1986). From the evidence
available it appears that the market has grown from
virtually zero (Keynote, 1986) during the last decade to
be worth between £140m and £450m, (Keynote, 1988;
Leatherhead Food Research Association (LFRA), 1989),
depending on the source quoted and the sectors included.
Reasons for this growth are many and complex and can
be categorised as being both consumer and producer led.
Increased travel, media exposure and enhanced availability
appear to be important influences on the consumer,
whereas technological advances in the distribution
infrastructure (Keynote, 1988, p.10) and increased global
production (Keynote, 1988, p.7) have contributed to the
growth of the market from the producer perspective.
Our literature search has failed to locate an "official"
definition of the term "ethnic food". The only authors,
we found, willing to commit themselves to a definition were
Frost and Sullivan (1985), who state that ethnic foods are
"foods emanating from or prepared to appeal to specific
groups, categorised by national origin, race, religion, or
cultural heritage". This definition, we believe, has
conceptual limitations.
This article examines the problems of definition, the
growth and market sizes of the main segments and poses
questions as well as offering some explanations as to why
and how growth has occurred. These issues are the
subject of a current PhD study.
Towards a Definition of Ethnic Foods
In the reports cited definition of ethnic foods occurs almost
by default. There is an implicit assumption that the reader
will know what is meant by the term. It has been argued,
tautologically in our view, that the term means foods
purchased solely by ethnic minorities (Grocer, 1983).
Market sizes, however, suggest that this is clearly not so
(Mintel, 1986b, pp. 7, 22). An alternative approach to
definition suggests that ethnic foods are those foods
emanating from outside their countries of consumption
and as such the countries of origin become irrelevant. For
simplicity, we have decided on the following definition:
"Those foods originating outside the UK but consumed
within UK both by members of the indigenous population
and by ethnic minority groups".
At this stage we acknowledge that this has substantial
weaknesses since it encompasses many commodities, e.g.
fruits, vegetables, grain, not normally considered as
"ethnic" in our sense of the word. An alternative strategy
therefore, is to offer a definition based on consumer
perceptions, i.e. "an ethnic food is what a sample of non-
ethnic consumers believe it to be". Arguably this too is
tautologous and to some extent an abdication of
responsibility, but it does add dimension to this debate!
However, as stated, there has been a move towards
greater added value in food products consumed and we
believe that ethnic foods are no exception to this
movement. Hence they may be categorised broadly into
three segments, depending on their level of added value.
At the lowest level are spices, farinaceous commodities,
exotic fruits and vegetables, at the semi-prepared level
are pickles, chutneys and sauces (wet and dry), and at
the highest level are the total meal/snack products. Such
segmentation focuses on differential added value where
the consumer has a "role" in preparation. But there are
substantial market sectors for ethnic foods where the roles
of preparation and consumption are separated. The
explosive growth of both restaurant and takeaway sectors
(MSI, 1988, pp. 1,2) suggests that these markets for ethnic
foods are many times greater than direct sales to the
 THE DEVELOPMENT OF THE ETHNIC FOOD MARKET IN THE UK
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consumer (Barnard, 1989, p. 63). It appears then that the
ethnic food market has three major segments: the
consumer, the takeaway and the restaurant, each differing
fundamentally in their levels of added value to the raw
materials. It is our premise that the development of an
ethnic food market proceeds through a series of sequential
stages from the highest to the lowest levels of added value
(see Figure 1). This is a theory which has yet to be tested
empirically.
The theory of market development through differential
levels of added value is based on well-documented
precepts of consumer risk taking (Bauer, 1960; Taylor,
1974. There appears to be considerable circumstantial
evidence of an inverse linear relationship between an ethnic
food's added value and its perceived risk, i.e. minimised
at the restaurant level and maximised with consumer
preparation. The level of exposure to risk thus increases
11
directly with one's involvement in its preparation. We
perceive sauce mixes and ready-to-eat meals/snacks to
be risk reduction mechanisms which facilitate smooth
progression for more adventurous consumers to move into
using raw materials for meal preparation and which provide
a sub-maximal level of risk exposure and a refuge for those
consumers who are less adventurous. Hence, it is our
premise that all varieties of ethnic food will tend to follow
the model outlined in Figure 1 at varying rates of
progression and penetration due to a number of intervening
variables. Simplistic it may be, but there is considerable
evidence from market data that our model represents the
reality of the situation.
A further problem in the search for a definition of the term
"ethnic food" arises when utilising product composition
as a basis for discussion. So many ethnic food products
have been modified to such an extent that it is questionable
 12 BRITISH FOOD JOURNAL 92.2

whether they can still be termed "ethnic" according to

even the loosest definition. This notion, which we term
attenuation, is most clearly seen in the Italian segment
where the staple pasta and pizza have been drastically
modified (e.g. alphabet spaghetti, spaghetti hoops, French
bread pizza) and marketed to appeal to specific target
groups. Their ingredients may be the same as in their
precursors, but their origins are wholly UK. The question
is at what point of attenuation does/did the original ethnic
food cease to be ethnic? It could be argued that any
deviation must lead to exclusion, or conversely that a
degree of modification may be acceptable. This anomaly
is not raised merely out of academic interest; market size
in this context may be defined largely by inclusion or
exclusion.
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Market Size and Trends

Commercially an analysis of the ethnic food market is
problematical, the difficulties arising primarily from either
a lack of clarity in definition (as discussed) and/or the lack
of a clear understanding of its segmentation by those
writing about the market and/or involved in the industry.
In corporate terms the major manufacturers compete
directly with a range of smaller independents, many of
which are ethnically owned. However, this competition
is not in parallel. The smaller companies tend to specialise
in basic commodities, whereas the multinationals tend to Table I). Accordingly, the major sectors have all exhibited
concentrate on the modified whole meal concept or on a rapid growth rate (LFRA, 1989) whereas the Afro-
attenuated products incorporating high added value and Caribbean, Thai, Malaysian and Japanese sectors have
minimal preparation. As the market continues to develop yet to create a significant impact. To support our premise
this could change. The approximate sizes of the major that an ethnic food begins its penetration route at the
sectors at retail prices are shown in Table I (MSI, 1988, higher added value and least risk end of the market
p.3; Mintel, 1989; LFRA, 1989). The figures can only spectrum, the fastest expansion in the overall market has
be taken as approximations given the diverse application been among concept meals, worth £100m in 1988 and
of the staples, the basis of data collection and the showing a 10 per cent annual increase. In addition, chilled
proportions of various levels of added value in the market. ready meals have an annual growth rate of 15 per cent
Italian food, for example, tends, by its mere longevity (Barnard, 1989, p.63) compared to a total ethnic market
in the market, to have a higher percentage of higher added set to grow by only 25 per cent over the nextfiveyears
value products compared to Afro-Caribbean or Thai (see (Mintel, 1989, p.76).

Reasons for Growth

Table I. Market Sizes of Main Sectors of Ethnic Food
Market
There are few food markets which can demonstrate such
an explosive growth over the past decade as ethnic food.
What reasons can be postulated for this rapid growth?
£m % £m % £m %
Initially they may be divided between those reasons which
Italian 294 63
are consumer ("pull") or producer ("push") led. As the
65 258
Indian 64
diversity of factors cited as leading to the growth suggest,
14 72 52 70 18
62
it seems unlikely that any single factor is a total predictor
Chinese 14 52 37 52 13
Mexican 12
of demand, rather that overall demand is multifactorial.
3 10 7 10 3
Greek 14 —
One reason offered (Keynote, 1988, p.5) is the possible
3 ) 6 4 1
link between size and growth of the ethnic food market
Other* 3 1 )
and the changing ethnic population in the UK (see Figures
Total 449 100 140 100 403 100 2 and 3). When the available statistics are examined and
*"Other" includes Japanese, Afro-Caribbean, Cajun, Thai and the associated problems with data collection acknowl-
Malaysian. edged, it is clear that there is no obvious relationship
(Table II). Increased tourism (Table III) is one reason
 THE DEVELOPMENT OF THE ETHNIC FOOD MARKET IN THE UK 13
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offered (Mintel, 1989, p. 73) and without doubt time spent
abroad offers opportunities for raising awareness and for
experimentation with new foods. Hence it may well be
that overseas exposure does influence sales of ethnic foods
in the UK (Table IV). This premise has to be tested.
Alternatively, the media, in all formats, have been
increasingly active in featuring items with an ethnic food
orientation, either indirectly via travel programmes or
more directly with cookery features. Cooks such as
Madhur Jaffrey, Kenneth Lo and Claudia Rodin have
become media "stars" through their programmes which
undoubtedly stimulate and give people the confidence to
experiment with flavours perhaps first tasted in a higher
added value situation such as a restaurant. Although the
expenditure on books, magazines and newspapers has
fluctuated widely over the last decade (Dennis, 1988, p.
247), the UK cookery book market has grown steadily
and is currently valued at £40m with expenditure on Indian
and Chinese cookery books estimated to be 30 per cent
of thisfigure(Keynote, 1988, p. 2). A further contributory
factor is undoubtedly the rise in consumers' disposable
incomes (HMSO, 1988, p. 161; 1989, p. 86) and leisure
time. Since 1983 there has been an increase of 17 per cent
(HMSO, 1989) and in 1988 disposable income was £249

Table II. Size of Indian and Chinese Ethnic Population and Market Size and Growth, 1983-86

1983 1984 1985 1986

Total ethnic population 2,303 2,361 2,376 2,559

% of total population 4.3 4.4 4.4 4.7
Indian population % change % change % change % change
(inc. Pakistani and
Bangladeshi 1,227 1,271 + 3.6 1,194 - 6.1 1,314 +10.1
Food (RSP) £29m - £33m +14 £40m +21 £49m +23
Chinese population 106 - 109 + 2.8 122 +11.9 113 - 7.4
Food (RSP) £23m - £30m +30 £38m +27 £45m +18

Sources: HMSO, 1987a; Labour Force Survey, 1986; Hilliam, 1985, p.2; Keynote, 1988, p.9.
Population figures are 000s
 14 BRITISH FOOD JOURNAL 92,2

Table III. UK Tourists Abroad

1980 1981 1982 1983 1984 1985 1986 1987

Italy 2,045,100 1,806,691 1,844,837 1,890,159 1,788,371 1,770,713 2,047,774 1,999,000

% change — -11.7 + 2.1 + 2.5 - 5.4 - 1.0 + 15 - 2.4
India 102,483 116,684 120,772 136,823 124,205 119,544 160,685 166,590
% change — +13.9 + 3.5 +13.3 - 9.2 - 3.7 +34.4 + 3.7
China PR NA NA 41,972 51,000 62,100 71,352 79,408 83,276
% change — — — +21.5 +21.8 +14.9 +11.3 + 5.4
Hong Kong 121,054 167,117 156,414 164,597 171,389 187,906 214,704 251,791
% change — + 3.81 - 6.4 + 5.2 + 4.1 + 9.6 +14.3 +17.3
Greece 768,215 964,707 1,022,692 888,891 1,043,363 1,329,259 NA 1,980,000
% change — +25.6 + 6.0 -13.1 +17.4 +27.4 — —
Mexico NA NA NA NA NA NA NA NA
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USA 1,130,000 1,225,000 980,000 1,016,953 927,574 860,837 1,133,683 1,362,479

% change — + 8.4 -20.0 + 8.4 -12.7 - 7.2 +31.7 +20.2
Caribbean 208,000 216,000 197,000 187,000 184,000 186,000 219,000 NA
% change — + 3.8 - 8.8 - 5.1 - 1.6 + 1.1 +17.7
Source: Personal communication, World Tourism Organisation, 1988.

billion. The General Household Survey (1986, p. 104)
revealed that expenditure on consumer durables rose with
household income. Ownership of such durables as deep
freezers (72 per cent of all households own one) and
microwave ovens (23 per cent of all households own one)
reflect this trend. In parallel there has been an increase
in available leisure time. An underlying trend over the past
25 years has been the reduction in working hours and the
increase in holiday entitlement (HMSO, 1988, p. 161); with
an increasing number of females in employment. All these
trends suggest that both financial resources and time are
increasingly available to devote to activities such as eating
out, fast food consumption and designer grazing, much
of which may be ethnically based. In 1986, households
spent an average of £4.38 per week (HMSO, 1989, p. 171)
on meals consumed out of the home and 47 per cent
(HMSO, 1989, p.163) of all respondents aged 16+ years
had been out for a meal during the previous month. Where
they went and what they ate is not recorded. If the UK
follows the USA in this context the growth of out-of-home
eating is expected to continue with a rise from $118 billion
in 1988 to $136 billion in 1993 (Frost and Sullivan, 1989).
The reasons highlighted above are clearly consumer led.
However, it appears that the most significant influences
on penetration may well be those which are "push" or
producer led. The reasons offered (Mintel, 1989, p. 73;
Keynote, 1988, p. 2; MSI, 1988, p. 1), include the develop-

Table IV. Sales of Ethnic Foods (Rm RSP)

1980 1981 1982 1983 1984 1985 1986 1987

Italian NA NA NA NA 120 125 NA 210

% change — — — — — + 4.2 — + 68.0
Indian 17 20 25 29 33 40 49 55
% change — + 18 + 25 + 16 + 14 + 21 + 23 + 12
Chinese 11 14 17 23 30 38 45 52
% change — + 27 +21 + 35 + 30 + 27 + 18 + 16
Greece NA NA NA NA 10 NA NA 12
% change — — — — — — — +20
Mexico NA NA 2 2 2 7.5 NA 8
% change — — — 0 0 + 73 — + 6.7
Caribbean NA NA NA NA NA NA NA NA
% change — — — — — — — —
 THE DEVELOPMENT OF THE ETHNIC FOOD MARKET IN THE UK
ment of the ethnic restaurant and takeaway trade and the
wider distribution of both ethnic commodity and precursor
products.
In 1987 the market values for the Indian and Chinese take-
away sector was £198m and £434m (Mintel, 1989a) respect-
ively. This represents 14 per cent of all takeaway food sales.
In 1984 the imposition of VAT on hot takeaway food caused
many consumers to change their purchasing habits and growth
in this sector was curtailed. Yet, as disposable incomes have
increased eating out has, once again, become popular. But
as the levels of sophistication of consumers have risen (for
the reasons cited) so have their demands for both high added
value food products and restaurant ambience (Mintel, 1989,
p. 74). In 1988 there were approximately 7,500 (Mintel, 1989,
p. 74) ethnic restaurants in the UK, an increasing number
of which are Thai, Mexican and Indonesian. A further reason
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for growth, we believe, is the innovative product development
supported by substantial media promotion (Keynote, 1988,
pp. 18-9) and retailers' practice of utilising block merchan-
dising techniques (Barnard, 1989, p. 84). In addition, in-
creased competition between the multiples and the
establishment of a growing number of ethnic-owned food
manufacturers, processors and producers (Grocer, 1988) has
made a significant contribution to the growth of this market.
Further, improvements in distribution technology, e.g.
atmospheric containerisation, and in materials handling (e.g.
air freighting) have increased the speed and hence quality
at which produce can be obtained from worldwide sources
and presented to the consumer. Historically, ethnic
merchants tended to look primarily to their countries of
origin where there were often family ties in the production
and distribution infrastructure. As demand has increased so
the larger indigenous wholesalers are seeking to trade with
ethnic importers and vice versa (Joy, 1987).
How then do these factors relate to marketing theory?
Traditional sources of diffusion assume that the nature of
innovation, once developed, remains relatively constant and
exists in only one or a very small number of formats, e.g.
colour TV. An ethnic food, we suggest, can exist in up to
five main formats simultaneously (i.e. restaurant, takeaway,
total meal, precursor, commodity) differentiated by levels
of added value. Hence the diffusion process may involve
the individual in a series of adoptions, starting, we suggest,
with a high added value format down to the lowest added
value format (Figure 1) or down to that format at which
an acceptable level of risk is obtainable. Clearly such an
expanded and convoluted diffusion process is unlikely to
be repeated for all or subsequent adoptions. The degree
to which the process is replicated with each ethnic food
may be a function of individuality and difference. So for
the ethnic food market there appears to be a different
pattern of diffusion from the traditional one where more
and more consumers take up the product.
Elaine Paulson-Box is a senior lecturer in home economics and Peter Williamson is a principal lecturer, both at Liverpool
Polytechnic.
15
It is our premise, then, that consumers move along this route
leaving a residue at each ethnic food format and that total dif-
fusion will exist when 100 per cent of potential consumers
use the product in one or more of the five basic formats.
Conclusion
All the reports cited are optimistic that the ethnic food
market will continue to grow and expand by 25 per cent
in real terms in the next five years (Mintel, 1989, p. 730).
The "why" issues have been addressed to some extent;
the "how" issues are raised to extend the debate.
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