As the fastest-growing demographic group in the United States, Hispanic shoppers have had the attention of food retailers for years now. The U.S. Census Bureau currently places their population at more than 45 million in the United States, and their aggregate purchasing power exceeded $863 billion last year, according to a recent report from the restaurant research consultancy Technomic Information Services, Chicago.
And, following the lead of supermarkets in the Southwest, many grocers have been rolling out new formats specifically tailored to Hispanic customers, such as Publix Sabor in Florida and the new Hispanic format rolled out in the Raleigh-Durham, N.C., market by Food Lion last month. Just last week, Fresh Market highlighted Grande Foods — a former Thriftway location outside of Portland, Ore., that owner Tom Evans converted into a Hispanic grocery in a successful attempt to fend off growing competition from local hypermarkets.
Of course, full-store remodels are quite an expensive undertaking, and the success of any new format is highly dependent on local demographics and the nature of the local competition. Retailers looking for a less expensive way to attract Hispanic shoppers to their bakeries and potentially their prepared food departments might consider installing a tortilleria — a fresh tortilla baking operation — for starters. The capital investment can range from $50,000 to $150,000 or more, but consultants interviewed by SN said that fresh tortillas are a crucial product for stores hoping to earn the loyalty of this growing demographic.
“In Mexico in particular, [tortillas are] something that's part of the store perimeter — it's something that's baked fresh all day long,” explained Terry Soto, president and chief executive officer of About Marketing Solutions, a Burbank, Calif.-based strategic consulting group focused on the Hispanic market. “From that standpoint, if a supermarket wants to present an authentic offering, it would behoove them to incorporate that type of technology into their stores, so that they can present [tortillas] as a fresh item vs. a packaged item. If a supermarket were to have that type of offering, it would attract [Hispanic and Latino] customers. Everyone prefers products that are made an hour or two hours ago, compared with something that was prepared in a factory.”
Darren Tristano, executive vice president of Technomic Information Services, agreed, and noted that fresh tortillas generally prove popular with non-Hispanic shoppers as well.
“The visual of seeing them made fresh, the smell of tortillas being baked, I think is very important. In a recent consumer study, we asked ‘What are you willing to pay more for?’ and fresh-baked bread was one of the highest-ranked items. Freshness is something that consumers are willing to pay a little more money for, and it helps differentiate [a supermarket or foodservice establishment] from others. And with tortillas, it's not unlike bread — if you're able to see the freshness, it gives you much more of a visual in terms of how you market it, and it's very important not just to Latinos but to all American consumers.”
With fresh food and fresh meal centers prominently placed in most new and remodeled supermarkets, shoppers are becoming more accustomed to seeing food prepared on-site, Tristano added. And, as part of that development, there has been a “tremendous broadening” toward ethnic foods.
“We're seeing more Indian foods and curry flavors, more Mediterranean foods and olive bars, and definitely Italian and Mexican foods,” he said. “And, the more fresh you prepare Mexican foods, the more flavorful they're going to be. Fresh cilantro, fresh salsa bars. These are becoming more important to supermarkets, which are starting to compete more aggressively with restaurants at large.”
In those terms, Tristano said, supermarket retailers interested in installing tortilla machines in their stores may want to imitate popular upscale Mexican restaurant chains such as Café Rio or Uncle Julio's, where the tortilla equipment is prominently visible to customers.
“You don't even have to ask if they're fresh,” he said. “You can see it, you can smell it and you know it. Provided these machines don't pose any danger to children or adults due to the heat, I think it's a great way to really show the freshness.”
The sights and smells of the machines at work help boost impulse sales among Hispanic and non-Hispanic consumers alike, in a manner similar to chicken rotisseries, he noted. But, that added benefit shouldn't preclude retailers from also sampling the product — either by giving shoppers a taste of the tortillas right out of the oven, or by incorporating them into sampling promotions in a store's prepared food area. Tristano pointed to Cosi, the sandwich chain, as an example of how sampling programs can help cement an operation's reputation for freshness and quality, even among existing fans.
“They have become really popular based on their flatbreads,” he said. “And, one thing they do is constantly sample pieces of their flatbreads to customers that are in line waiting for their food to give them a taste of it, and remind them why they're there. [Tortilla machines] could create really good opportunities for supermarkets to give free samples. Obviously, they can't just sit in a basket all day, so you might need someone who actually serves them or encourages people to come try them. But, anytime you can get someone to try a product, there's a high likelihood that [they're] going to purchase it, or purchase it the next time they are there.”