FRIEDA'S HELPS RETAILERS TARGET HISPANICS

DONNA W. CROTHERS

LOS ALAMITOS, Calif. -- What produce section wouldn't want to target a consumer group that spends $102 on the typical supermarket shopping trip, where other groups average $85?

And how about a group that tends to cook from scratch, is concerned about healthy ingredients and is growing four times faster than the overall U.S. population?

The group described above, Hispanics, is the fastest growing ethnic group in the United States and the target of the new El Mercado de Frieda store-within-a-store concept from Frieda's Inc., distributor of specialty-produce products, based here.

With signage, point-of-purchase material, and other merchandising tools, El Mercado de Frieda allows the retailer to set up a section within the produce department that caters to Hispanics, according to the company.

Many produce industry players already have seen a need for such ethnic produce sections.

"Ethnic foods are definitely the way of the future. With the ever-changing ethnic population, you have to be ready to capitalize on opportunities," said Joey Granata, retail sales manager for RLB Food Distributors of West Caldwell, N.J., which supplies produce to King's Super Markets of West Caldwell as well as other chains.

Some of the stores Granata works with have an Asian produce section, and he said he would like to see implementation of a similar Hispanic program.

Products offered through Frieda's El Mercado program include many varieties of chiles, from jalapeno to poblano, along with tomatillos, jicama and squash, which Frieda's began shipping in bulk out of Nogales, Ariz., and Los Alamitos, Calif., in February. All are designed to appeal to Hispanic consumers or to consumers who are following the national trend toward ethnic cuisine.

But the El Mercado concept is tailored less for Anglos than Latinos, who seek out merchandising that is targeted toward them, according to Robin Osterhues, Frieda's marketing director.

"Latinos really like to see messages directed at them. If we don't market to this culture and bring them into the mainline supermarkets, they will develop their own economic power," said Osterhues.

And the power Hispanics wield is great: a combined $350 billion, an increase of 65% since 1990, according to Osterhues.

The need for specific marketing is why Frieda's is setting forth this Hispanic market (which is what "mercado" means in Spanish) idea, soon to be followed by an Asian market concept, according to Osterhues.

El Mercado de Frieda sections are designed after the huge, open-air markets with large quantities of just-picked produce found in Latin America, Osterhues said.

In keeping with the mercados' festive atmosphere, Frieda's suggests adorning the section with streamers in the traditional Latino colors of red, green and white, as well as pinatas, dried corn, garlic braids and baskets.

Although no retailers have yet implemented the El Mercado de Frieda section, Osterhues said some are purchasing the products that carry the El Mercado label and are packed in specially marked boxes.

Osterhues noted that although the El Mercado products have good distribution, reaching as far as the East Coast, acceptance in Frieda's home state of California has been poor. And in some states with high Hispanic populations, such as Florida and Texas, produce is sourced closer to home, Osterhues said, making those markets problematic for the program as well.

Mark Luchak, produce director for Rice Food Markets of Houston, backed this up, saying that his stores offer a segregated section of Hispanic produce but most is sourced locally. "We have a huge selection of Hispanic items, but it is mostly local stuff," he said.

Retailers see growing demand for the separate section of Hispanic produce that El Mercado de Frieda offers, and some of Frieda's customers said they would take a close look at the concept.

"We handle some of Frieda's chiles, and I can see us getting on board" with El Mercado de Frieda, commented Granata of RLB Food Distributors. "One of our biggest ethnic items is chiles; some stores could have up to eight varieties," added Granata, including a mixed pack from Frieda's.

A divisional produce director of a large supermarket chain, who preferred to remain unnamed, voiced support as well: "We have expanded our Frieda's line. We are merchandising a lot of the chiles, jicama and palentas. I think those items are becoming pretty well established."

The produce director noted, "We have several stores on a direct-store ship basis, so they can order product directly and maintain the variety that is specific to their stores."

Osterhues agreed that the El Mercado de Frieda program should be applied on a store-by-store basis. "It is not a program you have to put into every store," she said, noting that Frieda's has a software program to do a demographic analysis on a store-by-store basis to determine if El Mercado de Frieda is a fit.

And although the mercados of Latin America are massive -- "the equivalent of power-shopping in the United States" was how Osterhues described them -- a large amount of space is not needed for El Mercado de Frieda.

"Retailers could do it nicely with a 10-foot section" set off by signage and the traditional colors of green, red and white, said Osterhues.

The stores supplied by RLB will likely have a smaller El Mercado section, but one that is in the center of attention, Granata said, noting that the Hispanic sections would be designed "the same way we have done our Asian program."

The Asian produce sections at King's Super Markets are 2 to 4 feet in length, said Granata, and "we highlight it as a focal point. A lot of stores have it in the center of the vegetable rack" to draw consumers' attention, he said.

Granata said he would advise supermarket chains that choose to experiment with an ethnic produce section such as El Mercado de Frieda to give the program a good chance. "It takes time to catch on," he said. "You've got to stick with it."