Ethnic Grocers Proliferating Around The Country
It was only a year ago that Manav Thaker and Sajal Rohatgi saw an opportunity. Metro Atlanta's Indian-American population has boomed in the past decade to now more than 21,000 residents in the 10-county area, and it is larger than that when you count college and university students.
But grocers that catered to that population were few and far between.
Three months ago, the duo rented a warehouse and launched Subziwalla.com, an online grocer that delivers ethnic groceries to customers within 24 hours of an order. Now, co-founders Thaker and Rohatgi are delivering to customers within a 40-mile radius.
While an online-only entity, Subziwalla's story is not a unique one. Over the past decade, ethnic grocery stores are rising in prominence in Metro Atlanta — especially the northern suburbs, which have seen an explosion in Asian, Hispanic and other international communities at a time when similar shifts are being seen across the U.S.
“Some of these [ethnic grocers] have been around for 20 years, but their expansion has really been happening since 2010,” Woodcliff Realty Advisors CEO Rudolph Milian said. His New Jersey-based retail firm represents retail properties across the U.S.
“What I'm seeing is stores that were originally opened by Asians that maybe had one or two locations, and now they are proliferating around the country,” Milian said.
Nationally, consumer spending on ethnic foods has been steadily growing. In 2013, consumers spent $11B on ethnic foods and products. That is expected to hit $12.5B this year, according to Statista. Ethnic supermarket business has grown 1.5% each year between 2012 and 2017, with more than 44,000 stores in the U.S., according to data from IBIS World.
Even mainstream grocers have delved deeper into offering ethnic foods than in the past. Last year, Minneapolis-based wholesaler SuperValu purchased both Unified Grocers and Associated Grocers of Florida, both of which have key Hispanic grocery customers, including Sedano's Supermarkets in Florida, Supermarket News reported.
“We’re obviously investing significantly in the Hispanic market and in people’s desires to have different types of food and authentic food,” SuperValu CEO Mark Gross told the publication. “This is a core strength of our customers, and I see us building on that going forward.”
When it comes to ethnic grocery market share, local data is harder to come by. Metro Atlanta's grocery industry is dominated by three big players: Walmart, Kroger and Publix, which command more than 75% of all grocery sales. All other chains take less than a 5% market share stake each, according to recent Shelby Report data. Ethnic food stores are becoming more commonplace across Atlanta, The Shumacher Group President Harold Shumacher said.
While 77% of Georgia's Asian and Indian population resides in the 10-county metro region, Gwinnett is home to the largest community at nearly 25%, according to the Atlanta Regional Commission.
“Over time, [ethnic] populations get more affluent and, for the most part, become mainstream Americans,” Shumacher said. "So the services will follow them."
While there are Indian brick-and-mortar grocers around town, Thaker said Subziwalla's bigger competitors are actually the big three grocers, each which have been growing their selection of ethnic options in recent years.
In the Indian culture, women do the majority of shopping. Because the company's model is all e-commerce, Thaker said they expected to see younger Asian and Indian users make up the majority of the buyers. But after three months of operations, Subziwalla has actually seen a large portion of middle-age Indian customers, much more than they expected, Thaker said. The site has tallied more than 200 customers, half of whom now represent repeat business for the company, Thaker said. He declined to share profit or loss information.
Shumacher said Gwinnett County has been the most populous zone for the rise in ethnic retail in the past decade. That change in the grocery landscape has hewed closely to the county's steady demographic transformation from a majority white population in the early 1990s to a county now known as a majority minority community.
“Around Pleasant Hill there are five Asian/Vietnamese markets virtually on top of each other, which speaks to that being the core,” he said.