Is the Canadian and North American marketplace an Eldorado for European food retailers?
ESN experts discuss in Toronto
The vast North American market place offers a seemingly unlimited array of selling opportunities for European products. There is cultural diversity in these markets, and Americans with European roots form a major part of this diversity. For many Americans, food can be a poignant reminder of their ties to the European continent and a link to their sense of cultural identity. However, not everything crossing the Atlantic is at face value.
In Toronto, sensory experts from the 17 European member countries of the European Sensory Network met with their fellow Canadian and Australian partners for a seminar detailing the preferences and complexities of the Canadian and American consumer.
Stereotypical conceptions concerning the eating habits of the American consumer (fast foods, foods high in sugar content and saturated with preservatives, as well as continent-wide blandness and uniformity) are an over-simplistic view of a more heterogeneous reality.
On the go consumption
Still, there is a much greater desire for fast and take-away foods in North America than there is in Europe. "In fact", said the Canadian workshop leader Anne Goldman, Director of Consumer Guidance Research at the private consumer research company, ACCE, in Mississauga, Ontario, "on-the-go consumption has become a way of life. The dashboard has become the dinner table. 30 % of meals in Canada are eaten in the car." While this astounded the European contingent, whose imagination went only as far as Coffee-to-go and drive-in hamburgers, the American passion for take-away foods seems to know no bounds. Even deserts must be devoured without muss or fuss. The consumers zeal for "immaculate consumption" is a product priority; yoghurt-muesli bars that won't crumble on your lap, pudding that can be squeezed out of the tube and into the mouth, making the spoon superfluous - such product "purity" is expected.
On the home front
On the home front convenience is also given the highest priority. Especially for the young, food that can be prepared quickly and with little effort is a must. Among the young, such universally-available products as KD-Dinners (Kraft pasta entrees) have achieved the status of "comfort food" - foods which by way of their mass appeal and frequent use are seen as giving the travelling or stressed-out consumer an assuring sense of "home-away-from-home".
Breakfasts, lunches, and dinners-to-go have become a staple of virtually every American supermarket and the demand for such items is still growing; a similar trend is beginning to take hold in Europe.
High-quality fresh products have become common-place; "North American consumers are used to a great variety of fresh-pressed juices and will only trust their freshness when they are displayed in the refrigerated section", said Anne Goldman. "Contrary to the European consumer, they do not accept juices made from concentrates which have the advantage of longer shelf life." As is the case in Europe, organic products are also becoming more and more popular throughout the North American continent.
seem to be a necessary marketing strategy. Muffins the size of grapefruits, and soft-drinks in buckets have helped to create an obesity epidemic. "We have lost the sense of normal size portions", criticised Goldman. An answer to this massive problem is the counter-trend towards reasonably portioned packaging (e.g. 20 g of Pringles), along with an endless variety of diet products. Low cal(ories), low fat, low cholesterol, and now low carb(ohydrates) diets have become synonymous with the obsession to loose weight and stay slim. Currently 15% of North Americans follow the "Atkins diet" with its emphasis on high protein foods coupled with a drastic reduction of carbohydrates. Such products as Pepsi Edge, which contains 50% less sugar, and therefore less carbohydrates and calories than regular Pepsi-Cola, Frito Lay potato and corn crisps containing soy proteins and fibre that cut carbohydrate content by 60%, and low-carb versions of pasta sauce (e.g. Ragu), salad dressing (e.g. Wishbone), marinades (e.g. Lawry's), tea mixes (e.g. Lipton), peanut butter (e.g. Skippy), ketchup (e.g. Heinz), and frozen meals (Conagra Life Choice) have all been successful market innovations.
Contrary to European expectations, there are clear regional differences in food preferences, pointed out Goldman's colleague Elisabeth O'Neil. For instance, in Quebec, the French part of Canada, there is high-level consumption of sugar, snack cakes, maple sugar, brandy/cognac, and gin. There is less demand for frozen and canned foods, cheese, ketchup, hot or spicy flavours, and sour or salty products than in other parts of Canada. Such regional differences hold true throughout North America. In the USA some six distinct major culinary regions can be identified.
However, some tastes seem to be universal; vanilla, cinnamon, buttermilk, sour cream, hickory smoke flavour, chilli, tomato, corn (cornmeal texture and popcorn flavour) are traditionally accepted flavours throughout Canada and the USA.
Popular preferences for nuts and fruits in North America differ significantly from European choices; peanuts, pecans, cherries, blueberries, cranberries, and maple syrup are staples in North America. On the other hand, e.g. hazelnut, which is a favourite in many European countries, is considered to be somewhat exotic by the U.S. and Canadian consumer.
Success of private labels
Over the last few years supermarket chains have begun to develop their own private labels. It is within this competitive milieu that some of the most innovative product developments have occurred. The success of such innovative flavour combinations such as Thai Chilli rice Crisps or Avocado flavoured Tortilla Chips and soya-based products developed for use as meat and dairy substitutes indicate that this tendency towards private labels within the supermarket chains has a bright future. They have already captured 25 % of the Canadian market. In the U.S. chain labels have garnered 11 % of the market and their market share is increasing.
For European importers, the enormous size of the North American market can cause production and delivery problems. Another major problem is the fierce competition in pricing. The competition from mass merchandisers and warehouse clubs has hit grocery retailers particularly hard.
Another important trend is the growing use of the Internet as a channel for retail sales; Internet shopping is becoming more and more common in North America and Canada and highlights the importance of an informative and user-friendly web site in the marketing mix.
Anne Goldman, ACCE GmbH, 2575B Dunwin Drive, Mississauga , ON L5L 3N9, CANADA
Phone 905 828 0493 x 244, Fax 905 828 0499