I was confused that why 'due to' (Option (D)) was wrong. I couldn't find the explanation i needed so i went on and did some grammar research and i found something that can help someone like me who's struggling to understand "why not Option (D)?".
"Because of" modifies verbs and "Due to" modifies only nouns/pronouns.
I found this excellent explanation on eGMAT:
1. It is cold in Arizona due to the westward storm coming from Pacific.
Incorrect (Cold in Arizona is a verb)
2. Arizona's cold wave is due to westward storm coming from Pacific.
Correct (Arizona's cold wave is a noun)
So in this question, if we use 'due to' then the logic will somewhat be like this:
The two varieties of commercially prepared coleslaw most popular in New York City and Boston are virtually ignored by consumers in Richmond and Raleigh
due to many residents of the Southeast not sharing the same ethnic heritage with.
Hence Incorrect.