Independents and regional supermarkets adept at courting ethnic shoppers are finding the payback rewarding.
Independents are connecting to diverse customer segments through ethnic packaging, merchandising, advertising and recipe demonstrations, plus conversations on the sales floor, and consistent support of charities and local events.
The end result is that stores are transformed into centers of the community and are becoming powerful lures to immigrants.
Such strategies bring success, sources told SN, because major chains neither extend their efforts to this degree, nor develop enough ethnic expertise to earn credibility and turn their stores into destinations for these shoppers.
"Reaching out to the community is extremely important," said Alex Romanovich, executive vice president of development at Global Advertising Strategies, a multicultural consultancy and marketing firm based in New York. "Supermarkets that lack the products and brands that ethnic groups find familiar will have difficulty competing in micro-geographies where mom-and-pops or specialty markets offer what they want. Ethnic groups prefer personalized experiences and gravitate to operators they trust."
To gain that trust, first understand the community, he urged. "Pay attention to your assortments, your messaging and your effectiveness. Too often, chains say, 'OK, let's test for three to six months, and see if people start buying or calling.' That's not the way to go. Multicultural marketing is more complex," said Romanovich. "You need to back it up with public relations, and assert yourself as a community leader."
"Bodega operators in California have evolved into small chains of 10 to 15, 30,000-square-foot supermarkets," said Rick Lombardo, general manager of Hispanic products for Unified Western Grocers. One bodega that Unified services has recently opened its second store in Bakersfield, he said.
To continue growing its members' Hispanic following, Unified focuses on 1,100 dry grocery items and general merchandise/health and beauty care -- a mix it steadily refines to satisfy the preferences of different Hispanic population groups. "We had 900 dry grocery items nine years ago, so we've refined more than expanded the offer over that time," said Lombardo. A few examples: brown pinto beans for Mexicans and black beans for Central Americans, and lots of peppers for Mexicans. More broadly popular are thin cuts of meat and bolio, a bread that Unified distributes.
Stores set in predominantly Hispanic areas can integrate these products within categories, and stores in mixed neighborhoods do well by segregating in an international section, he said.
Some of UWG's Hispanic-oriented retailers include Gigante, Anaheim, Calif.; Pro & Sons, Ontario, Calif.; El Tapatio, Los Angeles; and Vallarta, Los Angeles.
Moreover, Unified helps facilitate joint vendor and retailer participation in community events, such as concerts celebrating Cinco de Mayo (Mexico's independence from France) and Sept. 16 (Mexico's independence from Spain). "Customers who buy enough product from supporting vendors get free tickets," Lombardo said, noting the concert this past September in Whittier Narrows Regional Park east of Los Angeles drew a crowd of 140,000. Sponsor brands lined the perimeter with sample booths, and retailers hung banners.
Striving for Authenticity
"I don't see my goal as catering specifically to Asians," said Mitch Uyeno, Asian market manager for two Central Market combination stores in northern Seattle owned by Town & Country Markets. "What I do to meet their needs with authenticity broadens our overall appeal."
Indeed, the two stores each boast 200 running feet of Asian dry grocery food merchandise and housewares, plus 40 feet in refrigerated and 38 feet in frozens. A 10,000-square-foot produce section stocks plenty of Asian varieties, such as bok choy, nappa (Chinese cabbage) and gai lan (Chinese broccoli). Cooking demonstrations nearly every evening and weekend focus "once in a while" on Asian cuisine.
The broad spectrum of Asian groups -- from Japan, China, Thailand, Vietnam, India, the Philippines, Taiwan and South Korea -- makes it impossible to focus on every subset. "I zero in on main core items, and try to get whatever customers request," he explained. "We listen to our customers."
The combination of choice and education -- he and two co-workers roam these sections of the sales floor to give customers recipes, preparation and usage ideas -- gives Central an edge in earning trust at the Shoreline (up to 20% Asian populace) and Mill Creek (a newer, growing area) locations, Uyeno said. While he sources primarily from foreign vendors, "even if a product is made domestically, it would have the right seasonings in place," he said.
Value helps, too. Central has "cut out a lot of the middlemen, and buys mostly direct from vendors. We can be very competitive, and our customers recognize that," added Uyeno.
His personalized approach to winning customers is essential to grow by word of mouth and differentiates from nearby chains in that his operation rarely advertises.
"It's surprising how many people know about the store," observed Uyeno, noting that business workshop groups from abroad and residents from Seattle's Chinatown come to visit. Central further bonds a stable customer base to its stores by helping the community. "When the tsunami happened, we let people post fliers about where to donate or call," Uyeno said.
Central's welcoming environment is another part of its appeal. "We want to be friendly and fun," said Uyeno. At Halloween, for instance, employees dress in costume, and as many as 1,000 children come to find candy in the hay hunt or bounce on inflatables. The two biggest sales days are New Year's Day and the Chinese New Year, he noted.
Other Town & Country stores have smaller Asian sets developed in part with Uyeno's expertise.
Unified Pays Close Attention to Hispanics
LOS ANGELES -- How serious is Unified Western Grocers, the wholesale cooperative based here, about its pursuit of Hispanic consumers?
Monthly meetings run by Rick Lombardo, general manager of Hispanic products, typically draw retail members who tally 80% of the wholesaler's Hispanic sales. More than 20 operators who attend at a time share insights on pretty much anything that could affect consumption patterns or product availability: Which items are being held at the Mexican border? How is the peso valued against the dollar? What deals has Unified procured for the coming month?
"I don't know anyone else who does this with such regularity," said Lombardo, who's seen "a real nimbleness evolve in our organization since we began these meetings four or five years ago."
His team recaps the meetings and promptly e-mails highlights to the rest of its membership so all can benefit. "Doing this, we can compare notes and keep fresh ideas on the table. We [Unified] also gain credibility when we tell people something often enough, and they see the results," Lombardo added. "Their high attendance at meetings reflects how important this is to them."
Indeed, Unified's 600 members operate more than 3,000 doors in California, Oregon, Washington, Arizona, Colorado and Nevada, plus a bit of Mexico. Of approximately 700 member stores in California that serve largely Hispanic areas, Hispanics range from 40% to 100% of local populations, estimated Lombardo. "Many of our members are successful with Hispanics, and they don't have to be ethnic-owned to be so because customers judge based on the offer."
He pointed to Mike Provenzano's Ranch Markets, with stores in Los Angeles and Arizona, as an example of a member chain that's become extremely popular among Hispanics "by taking perimeter fresh to new levels, with produce, meat, service bakery and tortillerias."
Operators that hire from their communities and consistently mine grass-roots knowledge retain an effective knowledge currency over larger chains. With this intelligence, they can vie for market leadership in geographic areas of the heaviest ethnic density that hold the greatest potential rewards.
Clearly, the stakes for ethnic excellence are growing higher, as population trends indicate growing numbers of Hispanics, African Americans and Asians, and the likelihood that Caucasians will no longer be the majority by 2025.
The 2000 U.S. Census showed a population of 35.3 million Hispanics, 34.7 million African Americans, and 10.1 million people of Asian descent. Their growth pace exceeded Caucasians by six times between 1990 and 2000, a 35% surge compared with a 6% increase.
Here's a look at the increasingly diverse market, according to www.americanmulticultural.com, a division of Alloy Online, New York:
Hispanics are the largest ethnic group in the United States and the fastest growing, up 58% in the 1990-2000 period. Nearly half live in the western part of the country. They have a young median age of 26, and have large households averaging four members each.
African Americans living in the United States grew almost 16% during the same period. Another 1.7 million people identify themselves as African American in combination with another race. More than half, 54%, reside in the South. Their median age is older than Hispanics, at 30, but younger than the population overall, at 35. There are more African-American households in the United States -- 12.1 million -- than any other ethnic group.
Adding to the distinct Asian populace are another 1.7 million people who identify themselves as Asian in combination with another race. Half of all Asian Americans live in California, New York and Hawaii. They're slightly younger than the total population, at nearly 33, and they're more likely to live in metropolitan areas; nearly 96% of Asian Americans do.