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Retail sales of Oriental foods will reach the $992 million mark.

The market for Oriental food will grow 5.5%, to reach retail sales of $991 million in 1991, according to a new study by Packaged Facts, the New York-based research company. This will mark the second year of growth for the category after a prolonged mid-decade slump.

In addition, Packaged Facts is projecting that the market will stay on track in 1992, and grow 5% to reach the $1.037 billion mark. Growth is projected to slip slightly to 4% in 1993, and expected to stay at that level until 1996, when sales will reach $1.230 billion.

There are a number of very strong factors supporting future growth projections. Foremost among them, Oriental food ties in directly with the two overweaning trends in the food industry -- ethnic and healthy. Secondarily, restaurant trends and increased immigration have made Chinese food as all-American as pizza, and made a number of other ethnic cuisines such as Thai, Indian, Korean, and Japanese relatively familiar, thus inducing consumers to prepare Oriental foods at home.

However, those Oriental restaurants which have helped create a market for the Oriental foods are also having a negative effect on some of the segments in the category, according to David A. Weiss, the president of Packaged Facts. Says Mr. Weiss, "The days are long gone when a can of Chun King chow mein was the most authentic Oriental food the average American had access to. If you look at which segments are growing, and which are not, you'll see that those going head on against the local mom-and-pop Oriental restaurants are getting the worst of it."

And, indeed, the figures do reflect Mr. Weiss's pronouncements. The two segments that offered prepared meals actually shrank between 1986 and 1991: sales of canned foods fell from $184 to $154 million; and frozen foods slipped from $343 million to $296 million. Mr. Weiss believes, "In competing with average Chinese takeout fare, these segments' products have no edge on convenience, quality or price -- and that's why they are losing out."

Conversely, between 1986 and 1991, the other segments in the category fared well. Tofu's sales grew from $61 million to $95 million, Dry Soup's swelled from $217 million to $287 million, and Oriental Sauces' bulged from $104 to $160 million. "All gained, because they were not suffering direct competition from restaurants," according to Mr. Weiss. And he goes on to analyze the situation, "Although dry soups are, in effect, a prepared food, their low cost and portability put them into competition with other lunch products available at the supermarket, rather than with restaurant fare."

"Oriental sauces and tofu are actually benefitting from the proliferation of Oriental restaurants because increased familiarity with Oriental food has stimulated consumers to begin preparing the dishes at home." Mr. Weiss concludes, "As Chinese restaurants become increasingly ubiquitous, and restaurants that feature less familiar Oriental cuisines (such as Indian and Thai) continue to expand, from their urban coastal bases into the hinterlands, more and more consumers will sample new Oriental foods, and attempt to cook them at home. And the market as a whole will prosper." [Tabular Data Omitted]

Information about The Oriental Foods Market, which costs $1,550, can be obtained from Packaged Facts, Inc., 581 Avenue of the Americas, New York, NY 10011.
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Publication:Frozen Food Digest
Article Type:Industry Overview
Date:Feb 1, 1992
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