Asian grocery brands are evolving beyond the ‘ethnic aisle’

When Candice Choi launched her Korean seaweed snack brand Geem in 2023, she thought the company would be strictly direct-to-consumer with a marketing strategy that relied primarily on TikTok.

But within three months, the seaweed snack was on the shelves of grocery stores, including some Whole Foods stores, where gheem chips sat next to kale chips and vegetable straws.

“We were really, really excited that we had so many people who were really excited about our snacks and the stores were so welcoming to us,” Choi told CNBC. “Traditionally, buyers are the gatekeepers and it takes years and years and years to build that relationship, but they have realized that this category is growing and we have made a mark.”

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

Geem’s growth is indicative of a larger trend. As demand for global flavors increases in the United States, Asian groceries are gaining more attention in mainstream grocery stores, marking an evolution beyond the traditional “ethnic aisle” of the past few years.

These aisles typically had a limited selection of international products and often offered primarily sauces and oils. Now, the look of grocery stores has changed a lot.

“People are being exposed to new flavors earlier, and it’s not just some weird snack that you eat once and then say, ‘No,'” Choi said. “That’s really interesting. It shows that that flavor profile is really influencing consumer demand. And you can see that in the numbers. Asia’s snacking population is expected to reach billions by the end of 2030, and that’s just snacking.”

Research from BDA Partners, a global investment banking advisor, estimates that the ‘ethnic aisle’ will generate $8.8 billion in sales in 2024, with Asian products growing almost four times faster than overall grocery sales. According to BDA, the U.S. Asian food market is projected to grow to $51.3 billion by 2031 at a compound annual growth rate of 4.7%.

Grocery sales in Asia soared from $1.57 billion in 2021 to more than $2.31 billion this year, according to data from market research firm Sarkana.

Circana analyst Sally Wyatt told CNBC that growth is multidimensional. The Asian population in the United States has more than doubled since 2000, growing to account for 7% of the total population, according to a report by the Pew Research Center. Wyatt said as the population grew, so did its influence, introducing new flavors to the rest of the country.

This trend is happening in restaurants, but it’s most visible in grocery stores, where eating out costs 4.3 times more than cooking at home, Wyatt said.

“We think food and drink is a great way to get a taste of culture that you might not get to do every day, especially as younger consumers start exploring, especially since they want to travel but may not be able to do so,” she said. “In short, this flavor offers a unique experience and allows us to explore culture through food.”

Wyatt said the segments seeing the most growth include seasonings, sauces and frozen foods. As mainstream grocery stores strive to become one-stop shops for all consumers, growth has pushed these items out of the traditional “ethnic aisle” and placed Asian flavors next to American flavors.

“I was able to walk into each aisle and was struck by the different cultures, flavors and ethnic combinations in each store,” Wyatt said. “These products are starting to become more mainstream because these retailers want to appeal not only to Asian consumers, but also to consumers who want to explore Asia and combine Asian flavors.”

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

In the frozen food category, Deep Brands offers Asian flavors to a diverse customer base that reflects the country, not just Asians, said general manager Keenan Laughlin.

“Our overall objective is to elevate global flavors and make them more accessible to all consumers, regardless of race,” Laughlin told CNBC. “And what’s really interesting about these trends is that people might initially think that Asian flavors or global flavors are on the rise, especially because the population is growing…but it’s agnostic to ethnicity.”

Deep Brands includes the legacy brand Deep Indian Kitchen, which is sold in more than 25,000 stores, and the Thai brand Tem Toa, which is sold at Target. Laughlin said Indian frozen food brands have grown exponentially, accounting for 51% market share of frozen food products in the U.S., meeting growing demand from high-income millennials and Gen Z.

Deep Brand products are also sold in the mainstream aisles of grocery stores, serving as an easily accessible destination for non-Asian consumers, Laughlin added. The company expects syndicated retail sales to exceed $110 million this year.

“If you look at the ‘ethnic aisle’ or ethnic grocery stores, you’ll find that, generally speaking, it’s either targeted at a specific ethnic group or targeted at multicultural consumers,” Laughlin says. “We have business there, too, but our theme with Deep Brands and what we serve is consumers of all ethnicities who are looking for an authentic, premium, global flavor experience. So that’s where we sit in-store, too, and we’re having great success with that.”

AmazonWhole Foods is also increasing its investment in Asian flavors. Category merchant Julie Bandin said demand for the grocery giant was growing “quite significantly” and it was also an area where a lot of innovation was happening.

Bandin said the increased interest is primarily driven by consumers who want to be more adventurous in the kitchen and are looking for new items to help them do that.

“We sell products that you can’t find anywhere else, and it’s really a great bridge to Asian brands,” Bandin said. “Every placement is intentional. It’s designed to spark curiosity by bringing the product directly to the consumer’s mouth.”

The store added that Asian flavors are appearing across categories, including beverages, sauces, frozen foods and more. Bandin said that after Indian sauce brand Gymkhana hit shelves earlier this year, its explosive growth boosted the entire subcategory, including some traditional brands that were otherwise unprofitable.

“Fundamentally, across the stores in these different categories…we’re seeing them converge. That’s my hope. I hope we’ll see more of these flavor profiles and Asian-specific brands that can be cross-selling,” Bandin said.

a target A spokesperson told CNBC that the company sees continued growth in demand for food and beverage categories in Asia. Recently, they have expanded the number of products and shelf space with the addition of ramen bowls and Asian-style Oreo flavors.

Choi, founder of Geem Seaweed Snacks, said seeing her products in mainstream grocery stores means coming full circle to her experience as an Asian American.

Choi said her parents stocked their kitchens from an early age by frequenting both specialty Asian restaurants and regular grocery stores.

“Now I just take them to Whole Foods and I’m like, ‘Look, this is my product! Our flavor is on the shelf,'” Choi said. “For them, that’s a real sign of their success. … It’s about being truly accepted by other cultures, unapologetically, for who we are.”

—CNBC’s Natalie Rice contributed to this report.