DAIRY GRANDE

ROSEANNE HARPER

ANGIER, N.C. -- Fiesta International IGA has put all its eggs in one basket -- a big basket. Eggs packaged in suitcase-size cartons, gallons and gallons of whole milk, drinkable yogurt, horchata, queso fresco and rompope are the big draw in a new format specifically designed to woo the Mexican market. As a result, this past month, the store's reset dairy section posted sales that soared 60% over the same period a year ago.

Bigger and better milk and cheese displays get much of the credit for such success, said Frank Gonzales, owner of the 20,000-square-foot unit just outside of Raleigh, N.C., and a similar-sized IGA store across the city.

"Since we doubled the space for gallons of whole milk to an 8-foot section, sales of them alone have increased tremendously. I think it's because the bigger display just gives the milk a better look. We sell so many gallons on a Sunday we don't have time to get them in the case. Customers take them right off the pallet."

Mexicans, like other Hispanics, prefer whole milk to the low-fat varieties and they buy products in large quantities -- especially eggs, milk and corn tortillas, Gonzales said. Indeed, five dozen-count cartons of eggs are bestsellers in the dairy case.

"They're the size of brief cases. Picture two, two-and-and-half-dozen egg cartons side by side with a handle in the middle, like a suitcase. I stack them up in the well of a 4-foot section," Gonzales said.

Milk-based gelatin, described as custard-like, in 12-ounce and 16-ounce containers, too, is a favorite with Gonzales' Mexican customers. Two shelves of a 4-foot section of the dairy case show off 10 flavors but the best-selling variety by far is rompope, a flavor similar to eggnog.

"Those gelatin, as great as I think they are, are selling even better than I thought they would," Gonzales said.

As part of the store's new format, the entire dairy case was lengthened by 24 feet to take it to a total of 72 feet, and product variety in it was boosted approximately 7%. More white cheeses and more flavors of the milk-based gelatin were added to the mix.

"Now we have oxaca, a string cheese that's in a ball. It's good for topping a tender cactus salad," Gonzales said.

His own experience, as well as recent research, has told him that dairy, like produce and fresh meat, is particularly important to Hispanics. So, the new format -- Gonzales' longtime vision now a reality -- called for trimming space from dry grocery and frozen foods to make way for more fresh products.

"Fresh is important. In fact, we took out nine doors of frozen and converted them to refrigerated space. We moved beer and some nectars and juices from the dairy aisle to that area to make more room for dairy.

"We've always been known for our meat, with cuts that our Hispanic customers like, so we haven't changed that. We have added some variety in produce, but the [merchandising] changes are most obvious in dairy. The whole store looks different, too," Gonzales said.

It even has a different name. Previously it was called simply "Angier IGA." Gonzales has re-dubbed it "Fiesta International IGA" just to give it more international presence, he explained.

While a lot of supermarket operators are still worrying about how to attract large numbers of Hispanics without offending their other customers with bilingual signs, Gonzales took the bull by the horns and sent the entire look and ambiance South of the Border.

"We have mariachi bands and we break a pinata full of candies every Sunday afternoon. There are a lot of bright colors and balloons. Kids walk out of here with a balloon," Gonzales said.

Here, where roughly 10% of the population is Hispanic, the store's customer base is 80% Hispanic. Not only that, but 80% of that Hispanic base is Mexican.

In the 12 years since Gonzales opened a small bodega in this area, the Hispanic population has grown steadily. As more seasonal workers stayed year-round and began to settle into the area, Gonzales hatched the idea of operating a full-service supermarket with a merchandising tilt that would particularly attract Mexicans. But it wasn't until last year when he linked up with Fleming Cos. that he could do it.

"They can get me the authentic products I need, and the quality," he said.

Fleming used its resources -- from product procurement to store planning and execution to advertising -- to help Gonzales fulfill his vision. And the format is working so well that Fleming will use it as a model in other parts of the country, said Dennis Caire, president of Fleming's North Carolina division in Warsaw, N.C.

"We're still refining the [Fiesta International IGA]. We're collaborating almost on a daily basis with Frank to get it where we both want it. We appreciate the opportunity to work with an entrepreneur who has so successfully connected with his community."

Gonzales has good things to say about Fleming, too.

"They've been great, their personnel as well as their products," he said. "Since they're a worldwide company, they can get me anything. They're my major supplier now."

Gonzales made it clear that he carries national brands as well as Hispanic brands in dairy and in all his other departments. In fact, one of the dairy items that's growing fastest in sales is a national brand of yogurt in the "the little, kid-sized containers in six-packs." He also stressed that his supermarkets offer a full line of products, as any traditional supermarket would. It's just that he also wants to make sure he maximizes the store's appeal to Hispanics, he said.

Gonzales, who is Cuban-born, said he was aware even before he went into the retail food business that the Hispanic consumer is a prized customer.

"The thing with Hispanics is that we probably spend 30% more in the supermarket than other shoppers do. We cook and eat more of our meals at home. Breaking bread is so important to us," Gonzales said.

"I don't care who you are or why you're there, if you go into a Hispanic household, right away you'll be asked what you want to eat, what you want to drink. Then when you've had a big bowl of food, they'll try to give you another one."

Statistics show that Hispanics shop the supermarket more often than other customers and that they gravitate to the high-margin perishables departments.

Gonzales' comments are particularly borne out by research conducted by Rosita Thomas, president of Thomas Opinion Research, Woodbridge, Va.

Surveying Hispanics in studies sponsored by The International Dairy-Deli-Bakery Association, Madison, Wis., Thomas found that more than 50% of respondents said they cook dinner at home every night of the week. They also said they shop their supermarket dairy case an average of 2.2 times a week.

Thomas, who breaks down her findings by respondents' country of origin, always emphasizes that different segments of the Hispanic population want different things.

"Retailers need to take that into account and find out what products they like and what feast or religious days are celebrated by a particular customer base," she said.

One of the secrets to Gonzales' success, he believes, is situating his stores in areas where the Hispanic population is growing and then keeping tabs on the size of the various segments of that population.

"When I was going to school in New Jersey, I worked for two men who owned a pharmacy in Paterson. They catered to the Hispanic community which was relatively small then, and they taught me a lot. When I first moved down here, I worked for a pharmaceutical company, but I quickly saw it was a good place to go into the [retail food] business."

When he launched his bodega here 12 years ago, it was the first Hispanic-owned market in the whole state of North Carolina.

Angier's Hispanic population then was about 3%, "like Paterson's 40 years ago," Gonzales said. Angier -- unlike some Carolina towns that have a seasonal surge of Mexican farm workers who follow the harvest -- has a year-round Hispanic population.

A bedroom community to Raleigh, the town is home to Mexicans and other Hispanics who work in construction and the service trades.

As a small independent in this area, Gonzales believes he's particularly well positioned to find out what his customers want and to give it to them. That, he said, gives him a definite edge over big-chain competition.

Some of the large chains, he said, unintentionally irritate their Hispanic customers with little "ethnic" sections that have a whole melange of "multi-ethnic" products from tortillas to curried chicken.

Particularly offensive are products that pretend to be what they aren't.

"I saw one store grinding regular sausage and actually calling it 'Mexican sausage' because they put chopped jalapenos in it," Gonzales said.

Did You Know?

Here are the Top 10 dairy items bought by Mexican consumers, according to industry consultants:

1. Drinkable yogurt

2. Flavored yogurts in different sizes

3. Large cartons of eggs, like 2.5-dozen or 5-dozen cartons

4. Whole milk in gallons

5. Mexican-style white cheeses

6. Fresh guacamole

7. 100-count packs of corn tortillas

8. Mexican-style chorizo

9. Milk-based gelatin desserts

10. Mexican-style sour cream