by Malinda Geisler, content specialist, AgMRC, Iowa State University, malindag@iastate.edu.

Profile updated January 2008.

Overview 

Niche marketing is targeting a product or service to a small market segment that is not being served or in which demand has not exceeded supply. A market niche can be identified as a geographical area, a specific industry, ethnic group or a particular age group. An example of a market niche is the segment of the U.S. population referred to as “baby boomers.”

The U.S. ethnic foods market is estimated at $75 billion in annual sales. An ethnic market is a group of consumers that share a common cultural background. Many times an ethnic market has a distinctive geographic area. An example would be the U.S. Latino population.

The U.S. population is older, wealthier, more educated and more ethnically diverse than ever before. The Economic Research Service has identified three general demographic trends expected to shape future U.S. food markets: more diversity, more mature consumers and U.S. population growth. According to USDA projections, the U.S. population is expected to add between 50 and 80 million people by 2020. There will be greater proportions of Blacks, Asians and Latino. During the next 20 years, the U.S. Latino population is expected to grow by 1.2 million annually. Population increases for non-Latino Whites are estimated at 500,000 annually. Yearly population growth for Blacks and Asians is estimated at 400,000 each.

The U.S. baby boom generation, born between 1946 and 1964, will accelerate the growth of Americans aged 65 and older. The United States is projected to have 54 million baby boomers by 2020. This population segment is expected to consume less food and dine out less frequently.

The largest and fastest-growing consumer segment of the U.S. population is the 44.3 million Hispanic population. It comprises nearly 15 percent of the total U.S. population. Asian Americans are the second-fastest growth segment with 14.9 million people.

While the increasing diversity of the population is likely to increase per capita consumption of some foods including fruits, nuts, eggs, poultry and fish, decreases are expected in per capita consumption of pork (three percent).

Processing

The four largest pork processing firms account for 59 percent of the total U.S. slaughter capacity. That is up from 40 percent in 1990.

An option for processing and packaging is working with an independent meat processor in a given region. The products’ marketing area is affected by the type of inspection the meat plant has. If meat is processed in a state-inspected facility, it can only be legally sold within that state. If meat is processed in a federally inspected plant, however, it can legally be sold interstate, or in any state, and on the Internet.

 

Sources

Ballenger, Nicole and James Blaylock, Consumer-Driven Agriculture: Changing U.S. Demographics Influence Eating Habits, Amber Waves, 2003.
 
Hendrickson, Mary and William Heffernan, Concentration of Agricultural Markets, University of Missouri, 2002.

U.S. Census Bureau.

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Profile created March 2004 and updated January 2008.