The ethnic market beckons, but many vendors are slow or unsure how to respond

Vending operators on the lookout for ethnic products are having an easier time than they were a few years ago.

A recent online Automatic Merchandiser survey found that more than 90 percent of operators believe that product suppliers are providing enough variety of food, snacks or beverages to meet their customers' requests.

This is certainly a welcome development for those operators who recognize the rising demand for ethnic products. The industry as a whole, however, seems to be slow to recognize the need to cater to this growing market.

Ethnic market expands
Nearly three-fourths of vending operators recognize that their customer base is becoming more ethnically diverse, the survey found. This is consistent with government data indicating rising immigration, despite tougher restrictions on immigration since the 2001 terrorist attacks.

Vending operators overwhelmingly reported the biggest gain in Hispanic customers, which again is consistent with immigration data. Where immigration in the last century mostly came from Europe, most immigrants since the 1980s have come from south of the border.

A large percentage of operators, 63.16 percent, also cited African Americans as an ethnic group being served. However, other surveys have indicated that this group does not have specific product demands. An earlier Automatic Merchandiser online survey revealed that only 8 percent of the respondents viewed African Americans as having specific product needs.

New immigrants: more distinct needs
A key difference between African Americans and Hispanics is that most of the former group are not recent immigrants. Ethnic groups tend to adopt mainstream habits over time. Hence, the more recent immigrants have consumption habits that are distinct from the general population.

While most operators recognized a gain in ethnic customers, only about 40 percent reported success with products targeted to these consumers.

View results of vending operators survey charts A and B

This reflects the fact that only a minority of vending operators have offered products targeted to this group. The largest percentage of operators with products targeting ethnic customers -- 40 percent -- reported that only 1 to 10 percent of their products fall into this group. About 30 percent reported that 11 to 20 percent of their products fit this group.

Operators that have met ethnic demands have reported positive results. The challenge, however, has been in determining how much of the product mix should be geared to the ethnic audience when the customer base is mixed.

Ethnic products for all categories
The largest portion of ethnic products has been offered in the salted snack segment, followed closely by food.

One reason that salted snacks dominated ethnic offerings is the fact that this category has offered the greatest product variety for several years, and snack machines have more facings than other types of machines.

That same rationale would not hold true for the food category, which ranked a close second in the percent of ethnic products being offered. However, Mexican handheld food products such as tacos and burritos have naturally lent themselves to single-serve food packaging. This is one category where ethnic products have gained a foothold among non-ethnic Americans in addition to being popular among Hispanic consumers.

This finding isn't restricted to the vending industry, but has cut across the entire food industry as well. The McLean, Va.-based American Frozen Food Institute reported that ethnic prepared foods accounted for close to 30 percent of all frozen prepared foods last year.

View results of vending operators survey charts C, D, and E

Following salted snacks and food, slightly more than 42 percent of the operators provided ethnic choices in the cold drink category. The Jarritos soft drinks from Novamex have proven particularly popular in the last three years, and not only among ethnic customers.

As ethnic customers continue to rise in number, vending operators will find it necessary to carry products that specifically targets these consumers. The recent survey indicates product manufacturers are a few steps ahead of operators in meeting this need.