ROSEMONT, Ill. -- Retailers are fine-tuning their approach to the ethnic consumer through expanded private-label offerings and packaging changes, industry executives told SN last week during the annual Private Label Manufacturers Association trade show.
For example, BJ's Wholesale Club, Natick, Mass., is looking to develop private-label lines to complement the spectrum of branded ethnic products currently offered in the club chain's stores. The retailer offers national-brand grocery items that cater to the Hispanic, Asian, Italian and kosher consumer but, to date, has relied on brands with clear name recognition like Thai Kitchen, company executives said. The only ethnic private label at BJ's is the Rozzano Italian products line.
Also being mulled is a name for an umbrella store-brand program, one that will encompass all ethnic items, a BJ's executive at the show said. Asian consumers in particular are on the rise in the areas serviced by BJ's and are considered to be "very good club store clientele," due to the group's higher-than-average income levels and expanding families, the executive said.
At Western Family Foods, the Tigard, Ore.-based distributor and marketer of the Western Family and Shurfine private labels, the focus has been
more on the Hispanic market. The company has experienced success with an El Pato brand of canned Mexican hot sauces, as well as a two-pound bulk bag of Maya Copa beans, according to Dave Hayden, senior vice president of sales and marketing. Many of the Western Family products, including ethnic items, are sold under both the Western Family and Shurfine labels.
Packaging is crucial to moving ethnic products, Hayden said during the show, a lesson Western Family recently learned the hard way. As Hayden explained it, a cheese line aimed at Hispanic customers failed not long ago "because the packaging wasn't right." Some colors were changed, and other aspects of the package were manipulated. The line relaunched recently to a much better reception, he said.
Regina Tator, senior category manager of private label for Price Chopper Supermarkets, Schenectady, N.Y., also spoke on the importance of packaging on the exhibition floor during the conference. Tator said her stores recently upgraded all ethnic private-label packaging to make it bilingual in nature.
Earlier, Craig Espelien, general director of store brand and strategic sourcing at Supervalu, said, "We have to give a reason for the consumer to come back. We have to get off the 'me-too' track.
He cited statistics from 2000 showing the Hispanic population increased by 60%; the African-American population, 15%; and the Asian population, 28%. Meanwhile, the white Caucasian population fell by 8%.
"By 2050, the majority today will be the minority," he said.
Espelien noted that many studies point out that Hispanics are brand loyal. Supervalu's interpretation of the data is much more insightful, and affects its ethnic marketing message: Hispanics are simply more brand-conscious.
"People who take the time to communicate with [ethnic consumers] in their own language will draw them to their [private-label] products," Espelien said. "In the private-label world, you don't have to have bilingual labels. You don't have to have all this other stuff except right at the shelf where they make that purchase. Can you tell them what it is in Spanish?"
Espelien said retailers and wholesalers have to ask themselves whether their marketing message is being communicated in such a way that it resonates with ethnic consumers. Without the proper message to start with, bilingual labels will be virtually ignored by all consumers, regardless of ethnic background.
