UNFLAGGING STRENGTH

Mexican food has always been a hot category, but increased variety is making it even spicier, retailers told SN.Chains are now emphasizing not only nachos and salsas, but also a greater selection of specialty products and authentic goods.For instance, The Mad Butcher, Pine Bluff, Ark., has added between 8 feet and 12 feet to its Mexican food section to accommodate a new line of canned goods, cookies,

Mexican food has always been a hot category, but increased variety is making it even spicier, retailers told SN.

Chains are now emphasizing not only nachos and salsas, but also a greater selection of specialty products and authentic goods.

For instance, The Mad Butcher, Pine Bluff, Ark., has added between 8 feet and 12 feet to its Mexican food section to accommodate a new line of canned goods, cookies, candies, soft drinks, flour and cornmeal. "We went with a supplier that handles a lot of product directly out of Mexico, and we added that to our line," said Roger Burks, senior vice president.

Prevo's Family Market, Traverse City, Mich., has allocated additional linear footage to the category to make room for more stockkeeping units, said Aaron Prevo, category manager. It reduced duplicated items to keep the selection fresh.

To make its Mexican section hotter, it added more specialty peppers, salsas, beans and chips. "We've brought in a lot of hot, spicier foods," said Prevo. "They're a little more exciting than just nachos and refried beans." A fat-free line also has been introduced.

Because Rice Food Markets, Houston, has an increasing Mexican customer base, it has added an authentic line of Mexican foods.

"For our Mexican customers, we carry a greater variety of imported products as well as domestic," said Verne Buford, director of grocery merchandising and buying. The imported line features soft drinks, juices, lard, jalepeno peppers and tortilla flour, Buford said. He added that Rice seeks input from its Mexican customers when selecting products to add to its Mexican food section.

Though specialty Mexican foods are spurring category growth, the popular segments -- such as Mexican sauces, tortillas and taco kits -- are still racking up sales, according to Information Resources Inc., Chicago. For the 52 weeks ended April 21, 1996, Mexican sauces accounted for over $753 million in sales, a 5.5% increase; tortillas and taco kit sales -- with a healthy $523 million in sales -- increased 9.7%.

"Salsa would certainly be far and away the most popular item in the category," said Joe Cunnane, senior grocery buyer at Genuardi's Family Markets, Norristown, Pa. "Taco shells, kits, taco dinners and refried beans are popular." Whether it's for imported, specialty or traditional fare, retailers are getting the word out that Mexican products are available in their stores.

"[We're] advertising it more," said Dave Renaldi, grocery buyer at Martin's Super Markets, South Bend, Ind. Martin's advertises at least one Mexican food item every other week.

Genuardi's has also increased its advertising for Mexican foods. "We're doing a little more advertising than we have in the past because we feel that more people are drawn to the category," Cunnane said.

Some retailers look to their vendors for promotional guidance when it comes to Mexican foods.

"It's based on what the vendors do," said Jimmy Jones, grocery buyer at Ingles Markets, Black Mountain, N.C. Ingles passes the deals it receives from Mexican food vendors to its customers through the chain's Super Saver program, he said. To call attention to its revamped Mexican section, Prevo's currently is setting up promotions with its specialty food distributor.

"We're waiting for our specialty food supplier to come through on those [promotions]," said Prevo. "They're still trying to line up things such as advertising, promotion dollars and demos for us, but the response time hasn't been quite what we'd like it to be."

Despite the delay in promotional activity, Prevo told SN his improved Mexican food section is taking off. "I'd say [sales are] up approximately 10%," he said.

Burks of The Mad Butcher said it's more difficult to promote the imported items it stocks in its Mexican section. "We've got to make sure we've got enough product secured. It's not like ordering Kraft merchandise, which the warehouse would have plenty of," Burks said. Burks told SN The Mad Butcher hopes to promote its new specialty Mexican line in the fall, but will have to conduct an advanced survey to secure enough products for the promotion.

Promotions offered by domestic Mexican food manufacturers are helping to boost sales for The Mad Butcher's imported line. Twice a month, Burks said, promotions offered by American manufacturers draw shoppers into the Mexican food section.

Though most retailers told SN they merchandise their Mexican foods within a Mexican or international section, they often cross-merchandise Mexican items with other categories to boost sales.

Building a salsa and tortilla chip endcap was cited by most retailers as the favorite cross-merchandising combination, but others incorporate complementary items from other departments into their cross-merchandising strategies.

"We put some of the picante sauces over in produce." said Larry Brown, grocery buyer at Balls Food Stores, Kansas City, Kan.

Duane Proulx, grocery buyer at Bashas' Markets, Chandler, Ariz., cross-merchandises his Mexican foods in both the produce and dairy departments.

"[With] avocados, lettuce, tomatoes and even with sour cream in the dairy aisle," said Proulx. Bashas', he added, also cross- merchandises its Mexican foods on endcaps and in aisle stacks.

Renaldi of Martin's constantly cross-merchandises Mexican items throughout the store. "We bring it out into all departments: shredded cheese, tomatoes, onions, ground beef, everything to make tacos or fajitas," Renaldi added.

Other types of cross-merchandising opportunities also are available. For instance, Central Islip, N.Y.-based Waldbaum's, a division of A&P, Montvale, N.J., is cross-merchandising Tagamet UB .... acid reducer and Pepto-Bismol in its Mexican foods section, SN found in a store visit.

Unflagging Strength

Mexican foods are essential to Center Store inventories in the West and Southwest, retailers told SN.

"Because we're in southern California, it's a staple item for us," said Cara Yokomizo, senior grocery buyer at Trader Joe, South Pasadena, Calif. "It's as common as pizza or bread."

Judie Geise, assistant director at Andronico's Market, Albany, Calif., agreed. "I think people in California are aware of this type of cooking and have integrated it into their daily lives," she said.

Sales are doing so well that few chains heavily promote the category. According to Yokomizo, Trader Joe rarely pitches its Mexican food because most items are so popular they sell themselves. Geise said Andronico's only plugs its Mexican food during Cinco de Mayo, a Mexican holiday. "We have things that might not be available in the general realm of supermarkets," Geise said, citing that Andronico's stocks several types of specialty peppers and items from small regional manufacturers.

Bashas' Markets, Chandler, Ariz., promotes tortillas, beans and salsas on a weekly basis, said Duane Proulx, grocery buyer. And Balls Food Stores, Kansas City, Kan., features Mexican food in its ad every other week, according to Larry Brown, grocery buyer. Balls also caters to Kansas City's significant ethnic population by stocking a greater variety of Mexican food in stores with a heavy Mexican customer base, Brown said.

Though shelf-stable Mexican items are top sellers in areas with a large ethnic populations, many retailers told SN they prefer to integrate fresh and shelf-stable products in their stores.

"Customers can buy freshly baked tortillas that are delivered to our stores daily," said Trader Joe's Yokomizo.