Asian grocery brands are evolving beyond the ‘ethnic aisle’

When Candice Choi launched Korean seaweed snack brand Geem in 2023, she thought the company’s marketing strategy would be primarily based on TikTok and would be strictly direct-to-consumer.

But within three months, the seaweed snacks hit grocery store shelves, including some Whole Foods stores, where Geem chips sit next to kale chips and vegetable straws.

“It was really exciting to have people who were really excited about our snacks and our stores and were really willing to buy us,” Choi told CNBC. “Traditionally buyers are gatekeepers and it takes years and years and years to develop those relationships, but they have seen the category grow and we are outperforming.”

Due to popular demand, Geem will be available at Whole Foods stores in Southern California, Nevada, Arizona and Hawaii in July, the company told CNBC exclusively.

Geem’s growth is indicative of a larger trend: As demand for global flavors grows in the U.S., Asian grocery items are starting to gain more traction in mainstream grocery stores, signaling an evolution beyond the traditional “ethnic aisle” of yesteryear.

These aisles generally featured a limited selection of international products and often primarily offered sauces or oils. Markets look very different now.

“People are being introduced to new flavors sooner, and it’s no longer that weird snack that you try once and say ‘No,'” Choi said. “It’s really exciting and we’re seeing the flavor profile really impact consumer demand. You can see that from the numbers. Asian snacks are expected to reach billions of dollars by the end of 2030, and that’s just snacking.”

Research from global investment banking advisor BDA Partners estimates the “ethnic corridor” will generate $8.8 billion in sales in 2024, with Asian products growing almost four times faster than overall grocery sales. The U.S. Asian food market is expected to reach $51.3 billion by 2031, with a compound annual growth rate of 4.7%, BDA said.

Sales of Asian grocery products rose from $1.57 billion in 2021 to more than $2.31 billion this year, according to data from market research firm Circana.

Circana analyst Sally Wyatt told CNBC that this growth is multifaceted. Pew Research Center’s reported The Asian population in the U.S. has more than doubled since 2000, reaching 7% of the total population, he said. As that population grows, so does its influence, bringing new flavors to the rest of the country, Wyatt said.

It’s a trend that’s also taking hold in restaurants, but Wyatt said this dynamic is most evident in grocery stores, at a time when eating out costs 4.3 times the cost of cooking at home.

“Especially as younger consumers are starting to explore, as consumers want to travel but can’t, we’re finding that food and drink is a great way to get a taste of a culture that you can’t do every day,” he said. “So the flavors provide some unique experiences and allow for the exploration of culture through food.”

Some of the segments seeing the most growth are condiments, sauces and frozen foods, Wyatt said. The growth is pushing these products beyond the traditional “ethnic corridor”; Asian flavors are being placed alongside American flavors as mainstream grocery stores strive to become a one-stop shop for all consumers.

“I can go down every aisle and they’re all influenced by ethnicity of different cultures, tastes and combinations,” said Wyatt. “You’re starting to see these become more prevalent as these retailers want to appeal not only to the Asian consumer, but also to the consumer who wants to have Asian exploration and Asian flavor combinations.”

Private grocery stores are also expanding rapidly. Chains like H Mart, Patel Brothers and 99 Ranch Market are opening new locations across the country, offering a wide selection of Asian products.

According to General Manager Kiernan Laughlin, Deep Brands offers Asian flavors in its frozen food division to a diverse customer base that reflects not only the Asian population but the country as well.

“Our overall goal is to enhance global tastes and make them more accessible to all consumers, regardless of their ethnicity,” Laughlin told CNBC. “And what’s really interesting about these trends is that people may initially think that Asian tastes, global tastes, are growing, especially because the population is growing… but that’s agnostic to ethnicity.”

Deep Brands includes Deep Indian Kitchen, a legacy brand available in more than 25,000 stores, and Thai brand Tem Toa, available at Target. Laughlin said the Indian frozen food brand has grown exponentially and has a 51% market share in frozen Indian foods nationwide, meeting growing demand driven by high-income millennials and Generation Z members.

Laughlin added that Deep Brands products are also sold in the main aisles of grocery stores, serving as easy access points for non-Asian consumers. He said he expects syndicated retail sales to exceed $110 million this year.

“If you look at the ‘ethnic aisle,’ or if you look at the ethnic grocery channel, generally speaking, that means it’s targeting people of a particular ethnicity, or it’s a multicultural consumer,” Laughlin said. “There’s a business there, too, but our thesis about Deep Brands and who we serve are consumers of all ethnicities who want an experience of authentic, premium, global flavors. That’s where we sit in the store, and we’ve had great success with that.”

Amazon‘s Whole Foods is also increasing its investments in Asian flavors. Category trader Julie Bandin said the grocery giant had seen demand grow “pretty tremendously” and that it was also an area that was seeing a lot of innovation.