An ever-expanding group of Hispanic consumers across the country, not just in traditionally diverse markets, has necessitated an increasingly flexible approach to grocery-buying policies for this sector.
Retailers and industry observers agree that decisions about what Hispanic products a store should offer must be made on a case-by-case basis, centered around the makeup of a particular community, and additional efforts must be made beyond just stocking those products in stores.
Studies have shown that Hispanic shoppers buy fewer convenience foods and semi-prepared foods and more ingredients. Because of this, as consumers they can fill in the gaps left by non-Hispanic consumers who follow opposite trends, said John Stanton, professor of food marketing at St. Joseph's University, Philadelphia. This impacts the Center Store aisles where the ingredients for many foods are located, offering an opportunity for retailers to use specialty items to pull the Hispanic consumer in while still selling them basic products.
"The Center Store is a wonderful spot because so many of the Center Store items are ingredient items that people use with basic cooking. You don't have to have, for example, Hispanic baking powder, but you will sell more baking powder."
The key to the grocery aisles, he explained, is that stores don't need a full line of ethnic products; a few key items attract enough attention to the aisle. The trick, he stressed, is getting more people into the store to shop those aisles rather than getting more products into the center of the store.
The number of particular products a store could use to anchor a Hispanic Center Store section varies according to the demographics of a particular region, Stanton explained, but some items are key. Spices, like adobo, sofrita and malta (a liquid used in cooking), are important. Beans, rice and oil are also big items, particularly in larger sizes.
Allen Lydick, president of Mexigrocers.com, Raleigh, N.C., a Hispanic marketing consultancy, also pointed to Maseca (corn flour), La Costena (a brand of canned peppers and jalapenos) and El Mexicano products (a full line of dry labels for Mexican products) as key in the center aisles.
Top indexing products across markets in Miami, Houston, Los Angeles, New York, San Antonio and Chicago include canned meats (Vienna sausage, potted meats), canned fruits, lard and packaged herbal teas, according to data collected by market research firm ACNielsen, Schaumburg, Ill.
But, retailers and consultants are quick to point out, not all Hispanic communities are the same.
"The stores that are successful have to provide an environment for all of that diversity in their stores, too, so that all of those populations feel comfortable, and can call it 'their' Shaw's," said Bernie Rogan, spokesman for the West Bridgewater, Mass., chain.
In an effort to demonstrate its commitment to the communities it serves, Shaw's Supermarkets developed a line of ethnic private-label products. Included is a private-label line of beans with bilingual labels and signage designed specifically for the Latino community, Rogan said.
Lydick agreed with Rogan's approach. "Chains are cookie cutter; they want to do one-size-fits-all marketing. You really can't do that with this category; you need to go store by store," he explained. "Savvy retailers that are embracing the Hispanic are seeing benefits because they are very loyal consumers to the grocery accounts, to the store that provides the goods they're looking for. Once they find a store that is catering to their needs they'll stay at that store."
And, retailers such as Food Lion, Salisbury, N.C., have added a category manager whose jurisdiction is Hispanic products.
Hispanic/Latino products in Food Lion units serving particular markets are featured in a store-within-a store format that ranges in size from 12 to 48 feet. The section is dedicated to the Hispanic consumer, but product content varies on a case-by-case basis according to the particular group in the area, said Mirna Franjul, category manager, specialty foods, at Food Lion. Franjul oversees the specialty foods category Food Lion has created, but the main focus of that category, she said, are Hispanic products.
In some stores Hispanic-oriented products are grouped together irrespective of the category to which they traditionally belong in the store-within-a store area. Managers take a somewhat collaborative approach, she explained.
Franjul stressed the importance of a combined effort from the store on numerous fronts to attract and keep Hispanic consumers. Food Lion not only stocks a special section; it promotes that section through full-page advertisements in Hispanic newspapers and radio advertisements on Hispanic stations. Participation in the community is also important, she said.
"You cannot just carry the product and expect that the consumer is just going to go to your store. You have to make them aware that you have the product and you're catering to the community, that you feel they are important to you, that Food Lion represents something to their family."
Food Lion also offers customer loyalty card applications in Spanish, and savings on products featured in its store-within-a-store category.
Rogan agrees that it takes more than product to successfully serve a Hispanic community. "It's not just a matter of putting product on the shelf. It's much more than that. It involves employment practices, customer service, signage and all kinds of things."
Shaw's participates in a number of community-based efforts, such as street festivals, church and neighborhood organizations, to increase awareness of its Hispanic offerings and commitment to its diverse communities. Likewise, Food Lion has been involved with a number of Latin American festivals in North Carolina.
Shaw's also produces bilingual circulars and promotions based around holidays to woo Hispanic consumers.
Ingles Markets has taken a similar approach in producing Spanish radio spots that air on AM stations in two Southern markets -- Atlanta/Northern Georgia and Greenville, S.C., where the Hispanic population has grown substantially in recent years. Spots, produced by the Spanish-language stations WGVL in Greenville and WAZX in Georgia and Greenville, highlight store specials aimed at attracting Hispanic consumers.
The diversity within the Hispanic population of the United States complicates the choice of products, marketing techniques, holidays and promotions that retailers employ. The case-by-case merchandising and marketing model becomes extremely important.
"The real opportunity is for the independent grocers. It's a chance for them to be able to compete against the megastores because it's going to be really hard for a Kroger or Wal-Mart or Safeway, for any of these huge chains to quickly react to this. Hispanics are the opportunity of a lifetime for many retailers. I think the question is, will they act," Stanton concluded.
It may even be beneficial for markets that aren't yet serving a large Hispanic group. An incremental benefit of an expanded section can be the added attraction for non-Hispanic consumers who are looking for authentic, ethnic-food ingredients.
"Hispanic foods were previously available only in stores which had a heavy Latino base, but they have expanded. There are two reasons for this: There are more Latinos living all over, and more non-Latinos making that cuisine," said Karen Ramos, spokeswoman for the Jewel-Osco division of Albertson's, Boise.