CHARLOTTE, N.C. -- Some chain and independent supermarkets are discovering there's much to learn before pursuing a specific segment of Hispanic shoppers, but the effort is well worth it, retailers told SN.
Specifically, Winn-Dixie, Food Lion, Met FoodMarkets and Pioneer Supermarkets are among those avidly seeking the buying power of Mexicans, the largest group of Hispanics in the United States, according to the U.S. Census Bureau.
Mexicans -- drawn to the Southeast to work in the region's fruit groves and pork-processing facilities -- frequent Winn-Dixie Stores' Fort Mills, S.C., unit. Store manager Mike Helms said by creating an island case with all Mexican food items in a high-profile location, just between the deli and produce sections, demand for those products by Mexicans has "drastically increased." The division president even asked Helms to enlarge its display of Mexican foods, along the lines of one of their Charlotte supermarkets.
"They shop in groups of four or five and buy two or three cartloads of groceries," Helms said, noting that many are typical Sunday shoppers -- and often, cash customers. While they tend to head directly for the store's island case that displays dry goods and a small selection of fresh produce, they also make the rounds to the larger produce and meat areas where they buy a lot of thinly sliced meat and chicken, as well as larger cuts of pork roasts and ham, and family-size packages of hamburgers, Helms said.
According to Helms, the increased Mexican patronage in the Fort Mills store is due to word of mouth, because "Mexicans see we're catering to them more and are trying to respond to their needs. Once they shop here and find what they need, they tell their friends."
As a further indication of the importance Winn-Dixie places on attracting the Mexican customer, the chain has required store managers to take a basic, one-month Spanish course totaling 20 hours of instruction at the corporate office.
"Many Mexicans who come into the store can't speak English well," said Helms, calling the language barrier a "big hurdle."
Indeed, communication is the key, according to Rosita Thomas, Ph.D., president of Thomas Opinion Research, Woodbridge, Va. But it's often less about language and more about understanding what makes the Hispanic consumer unique.
"You can't just say Hispanic," advised Thomas. "Hispanic means so many things."
In her study of 1,000 Hispanics nationwide through telephone surveys and four focus groups -- conducted with both U.S.- and foreign-born Hispanic populations in San Antonio and Miami -- Thomas received input from Mexican-Americans, Puerto Ricans, Central Americans, Cubans, European-Hispanics, South Americans and Caribbean Islanders. The study was funded by the International Dairy-Deli-Bakery Association, Madison, Wis., but her latest findings were presented during the Annual Meat Conference.
According to Thomas, one of the greatest challenges in marketing to Hispanics is semantics; the same word means different things to different Hispanic groups. For example, "bodega" to a Cuban or a Mexican means a small store; to a Colombian it means a huge, warehouse type of store; to a native Spaniard, it means a small, specialty shop.
"Retailers must be conscious of the differences," she said. And since, according to Thomas' research, 71% of Hispanics in this country shop at American-style chain supermarkets, the retailers who learn how to appeal to this customer will reap their business.
Especially significant is the youthfulness of the Hispanic population -- the average age is 27.7 years, with 63% having children under the age of 18. In comparison, the Anglo population has an average age of 38.6 years, with only 39% having children under 18 in the household.
"Children are a big influence in purchasing decisions," she stated. "The role of family and extended family is so amazingly important to this population. Hispanics spend more than Anglos because of their larger families and because of the role of food in their culture. Retailers need to appeal to the fact that Hispanics are a food-loving, social people."
As Hispanics become more acculturated to the American way of life, they are growing too busy to prepare their favorite foods, which means another revenue stream for the retailer who can create in-store culinary offerings the Hispanic consumer wants. Thomas noted that 45% of Hispanics polled bought cooked chicken at supermarket service delis, and encouraged retailers to "spice it up" by keeping hot barbecue, lemon pepper or specific regional seasonings at hand.
Nevertheless, Thomas' figures reveal that more than 50% of Hispanics still cook at home, seven days a week, and allot more money for food in their budgets than do Anglos. "Freshness is paramount to the Hispanic population," she said. A Food Lion in Charlotte is so keenly aware of this fact and the area's growing Mexican population that the store makes tortilla chips. Cut-up tortillas are deep-fried in the deli-bakery areas of stores with the largest number of Mexican customers -- as often as twice a day, according to Bill Arnold, vice president, meat and seafood merchandising at Food Lion. Sales of the chips, sold in cellophane bags at a per-pound cost, are showing numbers that "right now look pretty good," he said.
With close to 1,200 stores in 13 states from Pennsylvania to Florida -- 569 Food Lions populate North Carolina and South Carolina alone -- the Delhaize America-owned chain works closely with store operators and category managers to develop Hispanic-related sets, Arnold said. He added that the chain's hiring of bilingual Spanish cashiers and stockers has been a key to communicating with customers who speak little or no English.
"We're really going after the Hispanic consumer and growing the category of Hispanic food lines," he said, stating his stores' product mix also includes meat cut in a way preferred by the Hispanic customer and cheeses, which are often the focus of product demonstrations.
The day SN visited Food Lion, a manager from Ole Mexican Foods oversaw the sampling of queso blanco, a white cheese described by Arnold as "great melting and versatile" and gaining favor among his non-Hispanic customers. With Thomas' research revealing the importance of cheese in Hispanic cuisine, sampling is an excellent way to cultivate the patronage of this consumer. It's also a great marketing opportunity for retailers, she added, because Hispanics are very willing to experiment with new foods.
White Rose Food, a wholesaler that also owns the trade names Met and Pioneer, and oversees the marketing for those independently owned stores, has catered to the ethnic shopper for the past 30 years. Currently, 121 Met FoodMarkets and 57 Pioneer Supermarkets populate New York City, Westchester, Long Island, and northern North Jersey.
"We're down to neighborhoods," said Jack Zumba, White Rose Food's senior vice president, sales, noting that five Met and Pioneer supermarkets, each with a vastly different concentration of ethnic patrons, all occupy a small area of 12 blocks in New York City's predominantly African-American and Hispanic East Harlem neighborhood.
"We see a cross section of the ethnic base in each store, collectively rather than individually, and then create marketing programs that allow each store to attract and retain particular ethnic shoppers by meeting their needs," he said.
Zumba noted the "very collaborative" relationship among his retailers, supplier and vendor.
"As new ethnic groups are identified, our vendors begin telling us about certain products and we pass along that information to our retailers," he said.
White Rose's motivation to maintain the financial health of those stores -- which use White Rose Food as their primary wholesaler -- is strong, since increased store sales mean more profits. It's no accident, therefore, that the topic of the company's fifth annual, three-day educational seminar, held in the Dominican Republic, was how to market to the ethnic consumer. Attendees included retailer owners and operators, food brokers and manufacturers, all of whom participated in a three-session discussion entitled "Do We Really Know Who Our Customer Is?"
Another seminar, "Let's Get to the Meat of the Matter" -- which focused on the different array of meats and meat cuts that appeal to Mexican, Colombian, Brazilian, Central American and West Indian consumers -- was "an eye-opener to the participants," said Zumba.
"Many of the attendees didn't realize the extent of the offerings and the nuances of preferences by certain groups," he said.
Thomas' research noted that in the Hispanic community, the butcher is "revered" and that retailers should be aware of this important relationship.
White Rose, a division of Carteret, N.J.-based Di Giorgio Corp., is also avidly pursuing the Mexican consumer with great "resolve," according to Zumba, who noted that ethnic group's regional diversity with respect to culinary tradition.
So great is White Rose's commitment to developing a Mexican consumer base that it's planning to visit supermarkets in Houston and Mexico -- along with visits within the Mexican community -- with retail operators in tow to get an accurate read on how to implement a more effective program for Met and Pioneer.
"The retailers want to see it for themselves," Zumba said.
Met and Pioneer stores integrate ethnic products with the conventional. Designating a corner or alcove for ethnic products is, according to Zumba, "weak merchandising," since many customers often buy from that area only, without shopping the entire store. However, Thomas' research shows that more than half of the ethnic consumers lacking English-language skills preferred Hispanic products to be located in one area.
Although Zumba noted that many Met and Pioneer supermarkets have Latino ownership, marketing success really depends on how proactive each proprietor is, regardless of whether he is of the same cultural heritage of the consumer he wishes to attract. Customized service, then, is key -- from providing food demonstrations to getting products specifically requested by the customer.
"Carry these products, or someone else will," Zumba said.
But Thomas also underscored the importance of appealing not only to Hispanics' desire for a particular product, but to their spirit, by creating a social atmosphere, offering free coffee, having Spanish-speaking employees, and playing Hispanic holiday-linked music.
"Make an environment for social interaction with Hispanic consumers," Thomas advises retailers. "A lot depends on the personal touch, like providing a place for them to sit. They consider going to the supermarket to be a family outing."