The Australian market for ethnic food is currently worth A$6bn (US$4.7bn), of which $3.8bn consists of consumer spending in restaurants and takeaways and $2.2bn represents spending in supermarkets and other retail outlets, according to a new report.

Australian business research and forecasting firm BIS Shrapnel says its research shows that Australian taste buds now prefer Asian cuisine. This has had a negative influence on the fastfood business as younger consumers move in the direction of cheaper and perceived healthier Asian alternatives.

A survey of 1,250 consumers carried out for the Ethnic Foods in Australia, 2004 to 2007 study suggested that the most frequently eaten ethnic cuisine types in Australia are Chinese, followed by Italian (excluding pizza), Thai, sushi and Indian.

Around 40% of restaurants in Melbourne and Sydney are Asian restaurants, against around 13% Italian restaurants, although this partly reflects the ethnic mix of the population.

Survey data suggests that the frequency of eating out at ethnic food venues decreases with the age of the consumer, from five times a month in the 18-24 age group, to four times for the 25-34 segment and three times a month for people aged 65 plus.

However, in 2004, consumer expenditure on ethnic foods in supermarkets and specialist retail outlets is expected to be dominated by European food products which account for 58.8% of purchases in the retail environment. Asian cuisine amounts to 33.5% of total consumer expenditure on ethnic foods, followed by Mexican at 7.4% and Middle East and other types at only 0.3%.

In recent years, major supermarket chains such as Coles and Woolworths are increasingly stocking ethnic food ingredients. However, Coles is slightly ahead of the game in better catering for new ethnic food trends, BIS Shrapnel said. The exception is in the ready-to-eat segment where customers purchase in equal measure from Coles and Woolworths.

Ethnic food expenditure in retail outlets is expected to rise to $2.7bn by 2007. BIS Shrapnel predicts that Asian and Mexican food products will record the highest growth in the retail sector, with European products now considered to be mainstream and unlikely to grow much faster than overall food consumption.