SUPERVALU PLANS NEW ETHNIC PRODUCTS

EDEN PRAIRIE, Minn. - Encouraged by the line's first-year sales, Supervalu here said it is developing 30 new items for Carlita, its signature Tex-Mex line.The additions will nearly double the items in the line, which is aimed at acculturating and acculturated Hispanics and mainstream shoppers seeking authentic ethnic products. The new items are expected to come out in summer and will contain a mix

EDEN PRAIRIE, Minn. - Encouraged by the line's first-year sales, Supervalu here said it is developing 30 new items for Carlita, its signature Tex-Mex line.

The additions will nearly double the items in the line, which is aimed at acculturating and acculturated Hispanics and mainstream shoppers seeking authentic ethnic products. The new items are expected to come out in summer and will contain a mix of line extensions, such as peach salsa, and authentic products, like spices.

Craig Espelien, general director of store brands and strategic sourcing for the wholesaler/retailer, called Carlita Supervalu's "single most successful corporate-brand launch" in terms of sales and distribution.

"We've gotten lots of letters of praise," he said.

Carlita also has provided insights into buying habits.

Experience has taught Supervalu that a new signature brand will cannibalize similar products already on the shelf. That's why the company typically removes the existing like-product when it introduces a new item.

When it introduced Carlita in February 2005, though, it kept some similar store-brand items for the first time. The results were surprising: At Cub Foods, one of Supervalu's retail banners, sales of Carlita-brand seasoning packets were incremental to the existing Cub-brand packets.

The results suggested to Espelien that "there are two consumers: one who wants to buy something that's more authentic and people who just want to buy private label."

Supervalu may soon have its next chance to apply this discovery. It's set to roll out Nature's Best, a new natural/organics line, to banners and retail customers in April.

"When the question comes up again, we have a good answer for it," Espelien said. "You can sell both, and you'll probably get incremental sales."

The Carlita-brand salsa won a Food & Drink Award in fall 2005 from the Private Label Manufacturers Association. The company's Northern Region, with 153 stores in Minnesota, Wisconsin, Iowa and the Dakotas, in December won a merchandising award for Carlita from the National Grocers Association in the best specialty/ethnic market event category. The region reaped wholesale sales of $96,243 from Feb. 27 to April 23, 2005.

The wholesaler/retailer credited the line's success with an extensive launch program, which included a series of on-shelf teaser signs; a point-of-sale recipe sign program; and sampling.