Skip navigation


The changes wrought by El Nino on the weather are prompting retailers to toss their annual promotional calendars and source deeply -- and what many are unearthing is a bright opportunity for non-traditional crops as a handy bridge into summer.Supermarket produce departments have been bringing ethnic, tropical and specialty items up to pinch hit for the usual line-up over the past few weeks, and as

The changes wrought by El Nino on the weather are prompting retailers to toss their annual promotional calendars and source deeply -- and what many are unearthing is a bright opportunity for non-traditional crops as a handy bridge into summer.

Supermarket produce departments have been bringing ethnic, tropical and specialty items up to pinch hit for the usual line-up over the past few weeks, and as a result have been taking a second look at a niche business that has potential to play more of a continuing role in sales and profit growth.

Consumers are responding well to out-of-the-ordinary items, retailers and specialty suppliers report.

"El Nino is causing retailers to take a different approach. It is causing more retailers to carry different lines of produce than they are used to," said Dolphus Broxton, vice president of sales and merchandising at Brooks Tropical, Homestead, Fla. "Merchandising the department can't be done by looking at what was done last year."

With fewer seasonal items to put on ad, Broxton said, "Ethnics have been able to take center stage, because of availability. Papayas have been available in June this year. Usually they die off in the spring. Mangos, too, have had a good spring."

Jeff Shilling, director of produce procurement and product development for RLB Food Distributors, West Caldwell, N.J., said El Nino is teaching retailers, suppliers and distributors to be more innovative.

"You have to throw out your calendar from previous years, because you can't do things the way you always have. In doing so, we will be better merchandisers in the future. This experience has also demonstrated that you don't have to give the store away to be a successful operator."

The increased emphasis on ethnic items means retailers are putting more items on ad and using larger displays for the subsegment, and that combination is boosting sales.

Current supply-side situations aside, ethnic produce items are continually being drawn closer to center stage by other winds of change. Ethnic populations in this country are gaining substantially in numbers and buying power, and their growing influence is creating an insatiable market for the specific produce items that form the backbone of traditional ethnic dishes.

"Ethnic merchandising is becoming increasingly more important to all retailers," said Bruce Peterson, vice president of produce merchandising at Wal-Mart Supercenters, Bentonville, Ark. "With the industry's consolidation, retailers are finding themselves expanding into areas outside their typical marketing area."

One of the fastest-growing populations is the Hispanic group. Census statistics place this population at about 27 million, which represents about 10% of the total U.S. population and which commands a purchasing power of $300 billion.

Census predictions foresee the Hispanic population growing to 30 million with a purchasing power of $447 billion by the year 2000. Projecting out to 2050, 80 million Hispanics would represent 11% of the total population.

"A growing Hispanic population means increased demand for Hispanic staples," said Robert Schueller, assistant marketing director for Melissa's/World Variety Produce, a Los Angeles-based specialty wholesaler. "Factor in the increasing popularity of Hispanic cuisine in the mainstream population, and the sales potential is tremendous."

Responding to this strength in certain markets, retailers such as Minyard Food Stores, Coppell, Texas, and H.E. Butt Grocery Co., San Antonio, have formatted entire units expressly to meet the needs, and capture the dollars, of the Hispanic customers within their trading areas.

Retailers are making these moves recognizing that there are some common traits of the Hispanic shopper, despite vast cultural differences between specific groups and nationalities.

First, these families are typically larger and spend a larger portion of their income on food. Hispanics shop more than twice as often as their Anglo counterparts, mainly because fresh perishable ingredients are key to most of the traditional dishes, studies show.

"Hispanics have a larger purchase per person in the produce department, mainly because the diet centers around fresh," said Don Matelson, president of Direct Ethnic Marketers, Los Angeles. "Basic commodities that are the elements that develop meals, including garlic, tomatoes, root vegetables and avocados, citrus, beans and chilies, are all central to the diet. To them, these are not specialties."

Industry experts also caution retailers, however, not to lump all Hispanic shoppers into one cart. There are great cultural and cuisine differences between Mexico, areas of the Caribbean, San Salvador and Guatemala.

"Latins all eat differently," said Eddy Caram, director of purchasing for Brooks Tropical.

"If you are a successful retailer today and you are not keeping track of your ethnic mix, you are in trouble," said Broxton of Brooks. "A complete neighborhood can change in five years. There is a need to become more diversified, as there appears to be no concentration of one group in any one particular area."

As Peterson of Wal-Mart put it, "We recognize that a one-size-fits-all approach to merchandising will not be appropriate. The success of an organization depends on its ability to micromarket."

It may not be apparent at first to operators which ethnic populations are moving into their trading areas.

If they look closely enough, however, retailers can detect shifts in populations that present ripe opportunities for a response in the produce department.

In the Northwest corner of Arkansas, for example, poultry-processing jobs have been quietly but steadily attracting large numbers of Hispanic workers. Not traditionally thought of as an ethnic region, this area is filling up with shoppers who are clamoring for their traditional produce items.

Marvin's IGA, Fayetteville, Ark., is one supermarket operator striving to meet the needs of these new populations. Just in late May, it began testing ethnic produce sections in four of its 24 units. The sections added approximately 75 stockkeeping units of Hispanic items into Marvin's overall mix.

"We noticed that, because of the chicken houses, our market was changing," said Bill Rusk, produce director. "We surveyed around the neighborhoods our stores are in, and discovered that this population change [is] here to stay. But if you don't sell to these customers, you won't stay around long.

"I like to have all the customers that I can. Any business we can get above and beyond our core business is great," he added.

To introduce the program, Marvin's committed 4 to 6 feet of wet rack space, plus 6 to 8 feet of dry space, depending upon the store. All the items are tagged and signed in both English and Spanish.

"Customers have to realize that you have the items on a day-in and day-out basis, for you to be successful," Rusk said.

The retailer began reaping rewards on the first weekend following the reset. One store garnered $400 in Hispanic-oriented produce that weekend, without any supporting promotion. Rusk said he expects that business to quickly expand with the aid of promotions, to between $1,500 and $2,000 in sales per week, per store, within a few months. The operator expects to roll out the program particularly in the Fayetteville area.

The ethnic business is also being affected in many areas by good economic times, which are affording non-Hispanic consumers more opportunities to eat in restaurants and to travel. Both these experiences spur consumers to try new produce items, and once they figure out which dishes they can recreate or experiment with at home, they are going to seek out the ingredients at their hometown supermarket.

"Restaurants often start the education process," said Schueller of Melissa's.

"Food service has proven that the consumer likes variety," agreed Broxton of Brooks Tropical. "You don't have to only be in an ethnic neighborhood to sell ethnic."

Indeed, many retailers consider chilies, cilantro and avocados core items of the produce department, because salsa, guacamole, tacos and enchiladas are gaining mainstream attention.

As multicultural cooking becomes more pronounced, the influence will expand to tamatillos, plantains and jicama. One person's specialty is rapidly becoming another person's staple.

"The demand is there and the opportunity is there," said marketing expert Matelson. "Not everyone is not taking advantage of it. However, it is not cheap, and it is a long process, and there will be failures. Those who succeed will view ethnic produce as part of a complete package."

Meanwhile, many produce merchandisers are just learning how to put ethnic specialties to work, the experts said.

"The produce department must reach for every possible sale to keep market share," said Rob Bildner, president of RLB.

"Competition between stores and between departments has forced produce merchandisers to take each sales potential seriously," added Bildner's produce expert Shilling.

It can become a chicken-or-egg style debate, however, over how the business builds. Does variety and selection of ethnic specialties, designed to draw the interested customer into the department, come first? Or is it the customers' already developed desires and tastes for ethnic produce that push the retailer into offering these items in the produce department?

"Retailers have to decide if they are an ethnic marketer or if they are offering a broad selection," offered Peterson. "With ethnic marketing it's an all-or-nothing proposition. You have to offer products in the ways customers can put them to use on a day-to-day basis, to create ethnic dishes.

"If instead, you are seeking to offer items used by customers infrequently, then large quantities of items and bulk displays should not fit into the scheme.

"The 2.5-ounce bag of dry chilies makes perfect sense in a department that caters to consumers seeking selection. It makes no sense for Hispanic shoppers who would use that quantity rather quickly," Peterson said.

"As with any produce selection, a lot of retailers meet the needs of the marketplace by carrying the top items that market demands," said Melissa's Schueller. "Others use produce variety and selection as a means to differentiate themselves from those down the street.

"But if your demographic doesn't show you have a market to support ethnic items, it may not be your time yet to carry them. Retailers have to look to their customers."

"It is wiser to understand the market and focus on a better way to build your business," said Matelson. "These items are staples, not specialties. Focus on the market and prove to the employees in the store that this is a viable business. There are no cookie-cutter answers. It takes time and commitment to research the store, market the items, train the staff and set up the section."

Bildner, however, said that merchandising savvy can turn a potentially flat market for ethnic produce into a lucrative one. "You don't have to have an ethnic neighborhood to be successful with ethnics," he said. "You do have to be creative, to get customers to try items that are new to them."

With regard to the challenge of building an ethnic poroduce business, RLB has identified two types of consumers within its trading area -- those who are used to buying ethnic specialties, and those who don't buy them -- and thinks both are the right targets.

"It is the latter group which represents a real opportunity," said Shilling. "They respond to progressive merchandising, nice colorful displays. Once they are told what to do with the products, and maybe have been given a sample, they will buy."

Earlier this spring, the food distributor staged a well-attended one-day exposition focused on "Food Retailing of the Future." Among other things, the event featured the 800 SKUs of produce items RLB offers, and it spotlighted creative merchandising solutions for ethnic specialties.

One solution was a "banana tree," with bananas hanging from high on the display, while assorted tropicals, including coconuts, mangos and papayas, were arrayed underneath. "It looked like a tropical island," said Bildner.

It is such store-level execution that remains at the crux of success of any ethnic produce program. There is more to execution than simply deciding where to put ethnic specialties, experts say. Employees have to take possession of the concept.

"The biggest opportunity is to sell to the produce manager and clerk," said Shilling. "Consumers are willing to buy anything, if it tastes good. The store personnel has to understand the extra sales and profits that come with specialty items.

"Growers, shippers and packers have to make it easy, giving retailers information on how to display and sell these items and help retailers tell consumers how to use the items at home. Mangos used to be considered ethnic. Now they are one of the most popular items in the produce department," said Shilling.

Rusk of Marvin's IGA concurs. He said training the produce associates, and the front-end staff, has been a high priority for the operator's introduction of ethnic items. A book with color pictures identifying the items backs up the training.

Strict marking of price look-up codes also helps identify items, Rusk said, and that also helps to assure that the program will reap the profits it deserves.

"When it comes to profitability, you are either a hero or a zero," said Peterson of Wal-Mart. "If you have researched and marketed, and you hit the important segments of your customer base, then you will have a home run."