MEXICAN STANDOUTS

BOB BAUER

Mexican-influenced frozen entrees and sandwiches are spicing up the frozens case and standing out within the growing segment of ethnic offerings.

Frozen-food buyers contacted by SN said Mexican items are growing in popularity.

It's hotter for some than for others, apparently. If the level of enthusiasm among the retailers interviewed could be rated like the spiciness in salsa, it would probably fall somewhere near medium.

Also, while they continue to show promise, ethnic items such as Mexican and Chinese foods still comprise a relatively small chunk of frozens volume, retailers said. But almost all agreed that they don't want to be caught taking a siesta and miss out on sales opportunities with Mexican products.

Where they can, they are allocating more space to handheld items such as burritos, or to the entrees segment. They are also keeping up the chatter with advertising and discount promotions.

At the Dallas division of Kroger Co., both Mexican entrees and sandwiches are strong sellers, according to James Weaver, frozen foods buyer.

"The beef enchiladas and those types of things move," Weaver told SN. "We've always done pretty well with Mexican foods," he added -- not surprisingly, given his market's Southwestern location.

Indeed, for the most part, retailers with stores in larger urban centers, as well as areas heavily influenced by Hispanic culture, reported higher levels of consumer interest in the category.

Some merchandisers suggested their shoppers' interest in Mexican food stems from the greater number of Mexican restaurants in the market today, pointing to chains such as Chi-Chi's and Taco Bell. Mike Post, frozen food buyer at Morgan's Holiday Markets, Cottonwood, Calif., said warehouse clubs have helped spur the ethnic category's growth in his area.

"You've got the club stores with their big packs of toquitos and enchiladas, and frozen tacos are doing real well. For us, it's more of the entrees line, and TV dinners are doing well." He said many of the new products are coming from direct store delivery distributors.

Another factor is probably the convenient, on-the-go appeal of the handheld products. It's not all burritos, however.

"The dinners are probably a little stronger than the others," said Weaver of Kroger. "The sandwiches do sell real well when you have them on reduced retail. On a regular basis, though, the dinners do better for us." Weaver added that El Charrito and Patio products are the best sellers in his stores.

Nielsen reported that for the 52 weeks ended Dec. 11 sales nationally of Mexican one-food entrees in supermarkets jumped 5.2%, to nearly $300 million. Two-food entrees were up by more than 30%, but totaled just in excess of $5 million.

Southern Florida supermarkets also noted brisk business in the freezer case with Mexican food.

"They seem to be picking up," said Marc Aubin, senior grocery buyer at Pueblo International, Pompano Beach, Fla., which operates Xtra Super Food Centers. However, while Weaver at Kroger said entrees were the standouts over sandwiches, Aubin said it's the other way around in his stores.

"The entrees aren't doing that well. The sandwich-type things are doing [better]. They've always done well in this market, naturally. We have a lot of Latin trade," he said.

That Latin trade means Aubin has to stock additional items such as yucca from various Latin American countries. On the Mexican side of things, he rated burritos and enchiladas as the most important items to carry.

The diverse nature of the ethnic food category makes it tough to define and measure with hard numbers.

Industry sales-tracking houses mostly blend sales of ethnic-oriented products into other categories, such as entrees and handheld nonbreakfast items.

Most retailers were confident, however, that the business in Mexican foods is expanding, and many said they and their competitors are merchandising them more aggressively in response.

"I imagine the stockkeeping units have probably doubled in the past three years or even less [time] than that. You just can't do it without some additional space," said Bob Burt, frozen food buyer at Harding's Friendly Markets, Plainwell, Mich.

"I would say they're probably more popular than they ever have been," said Marc Olson, frozen food buyer at Erickson's Diversified, Hudson, Wis. "Burritos and those types of things are doing well. Tony's Red Baron has introduced a line that's doing fairly well." Olson said he has marginally increased the space he allots to Mexican foods to accommodate the growth.

An official with a New York-area chain said most of the stores in his area have beefed up their merchandising in frozens by adding one or two more facings in the sandwich area, as well as a "couple more SKUs" of entrees.

"We have added space. We've had no choice; so have our competitors. [Metropolitan New York] is really a melting pot, so there are a lot of different cultures out there, and even people not of those cultures are exposed to them," the executive said.

He cited Old El Paso products as his best movers. "Their burritos and the like are strong sellers. The price seems to be right on those type of products. I suppose their convenience helps, too."

"It's a good category for us and it's becoming stronger in our area than it's ever been," said Don Woods Jr., vice president of Woods Supermarkets, Bolivar, Mo. "Periodically, we reset areas and we've expanded it from what it was," he said. "We expanded as the sales determined it. As they grow, we try to devote more space."

"There's a lot of new items. The category has been growing and growing," said Frank Kirchner, general manager at Knowlan's Super Markets, St.Paul, Minn. "There's quite a few people who have entered into the market." He mentioned the Tony's brand as particularly active.

"Tony's Pizza just introduced to me last week a line called World Cafe. They've come out with things like tostadas. And they've got something they call a Pot Sticker, which is something kind of on the order of an egg roll," he said.

Randy Freeman, frozen food buyer at Smitty's Supermarkets, Springfield, Mo., said space allotment is now a primary concern in the category, because there are so many new products. "Grocers are getting very critical on the movement of new products. If it doesn't happen quickly, they're gone," Freeman said.

Post of Morgan's Holiday Markets was one of the few retailers contacted by SN who hasn't yet allocated more space for ethnic lines.

"We really haven't," he said. "We're thinking about taking on a couple of new lines and then we might have to allocate more space. But basically, we haven't added any. They've had their two or three doors and that's what they get."

As a whole, Mexican products are strong day-in, day-out movers, said retailers. Specific items, however, also respond well to promotions, they added, with burritos mentioned most often as a good product to feature.

"Burritos are a real hot item, especially when they're priced cheap. They sell very well when you have them at four for $1," said Woods at Woods Supermarket.

Harding's Burt said, "We have something Mexican in our ads at least monthly, which is a little unusual. Whoever's got the best offer is usually who you go with, and you usually get pretty good results."

Post said the products lend themselves to sampling. "The club stores do a pretty good job on samples out here. They sample everything they've got."

The New York retailer said his chain has increased its advertising of frozen Mexican foods from four times a year to about six times. "These types of products seem to be impulse items for the most part. We've noticed we get little bumps in sales when we have them in the ads and put them on display. Actually, the displays seem to work a little better than the ads," he said.

Most of the supermarket executives agreed that the Mexican food business is a bellwether for frozen ethnic food in general, usually ranked alongside or slightly ahead of Chinese as the leading segment.

Harding's Burt said his Mexican food business reflects the fact that ethnic foods in general are experiencing a surge in frozens. "They've picked up quite a bit in the last year, year and a half. It's been especially heavy in the pasta lines; and Chinese doesn't seem to level. It's always growing."

Mexican products still outsell the others, he added. "That's been big for a long time." Post of Morgan's Holiday Markets said most of the space allocated is taken up by Mexican and Chinese products. "In our geographic area, that's about it on frozen ethnic foods."

"As far as supermarkets are concerned," the New York area retailer said. "it's only translated to Italian, Chinese and Mexican products so far. The other two have been around a little longer; Mexican foods just seem to be hitting their stride. I don't know how much more they'll grow."

How retailers merchandise ethnic foods varies from store to store, depending on demographics. Some, for example, have stores in markets that merit breaking out Mexican and Chinese into distinct sections.

"We have 34 stores and they vary in size," said Burt of Harding's. "Where we can, we have Mexican sections and Chinese sections, in frozens and in the dry lines."

Avner Joseph, frozen foods director at Waldbaum's, Central Islip, N.Y., said his chain also varies its selection from store to store. "We merchandise according to the customer makeup of the area," he said.