Ethnic food producers urged to hit Europe's new hot spots

UK manufacturers should cash in on demand for ethnic foods in continental Europe before other suppliers muscle in, said export agency Food from Britain (FFB).

It said major European markets where the sector was still very immature were seeing high double digit growth and UK suppliers were particularly well placed to meet demand.

The ethnic food market in Spain is increasing by 30% year-on-year, driven by Mexican and oriental products, with Germany, Belgium, Sweden and France also expanding rapidly, said FFB's head of research and consultancy, Chris Brockman.

Chilled ready meals were a key opportunity for UK ethnic food suppliers, with growth of more than 30% in Spain in 2005, 26.8% in Belgium, 14.5% in the Netherlands and 9.2% in Germany, added Brockman.

"UK suppliers have blazed a trail in ethnic ready meals, and have particular expertise in using authentic recipes and developing meals associated with particular regions of India," he said. "We've a head start and we should take advantage of it before domestic suppliers get their act together."

While some companies, such as Noon Products, Patak's, Geeta's Foods and Sharwood's, had been proactive, many other UK companies were missing a trick, he said. "It's partly a case of island mentality and practical concerns about costs and logistics, but also just that people don't look far enough ahead and exploit opportunities when trends are on the upward curve.

"Typically, with exports, the more premium your product is, the better chance you have, but in markets like ready meals, we can still compete in the mass market, volume end as well.

"Noon Products, which has chilled ethnic ready meals in 350 Rewe stores in Germany, has pretty much created that category from scratch. The products have been adapted to meet German tastes and are pasteurised to create a 21-day shelf-life."

The frozen ready meals market, which is declining in the UK, is growing rapidly elsewhere in Europe, particularly in the Netherlands (11.4% in 2005) and Spain (7.4%), said Brockman. There were big opportunities for supplying other products, too, particularly cooking sauces, which grew almost 30% in 2005 in Germany and Belgium.

Discovery Foods recently struck a £2m deal to supply sauces and related products to two of Sweden's leading supermarkets, he said.