CARNIVAL'S 'TORTILLERIA' HAS RECIPE FOR SUCCESS

ROSEANNE HARPER

COPPELL, Texas -- Carnival Food Stores here is showcasing a fresh-made tortilla operation -- the second for the chain -- in a new flagship store that opened this month in Dallas.

The first "tortilleria" operation, at an existing store, has been so successful that the company plans to generate a competitive edge by installing warm tortillas at all its new stores, and in remodels where space permits, officials said.

At 50,000 square feet, the newest building is the largest of the 17 Carnival stores, which market primarily to an Hispanic population. Minyard Food Stores, also based here, operates 46 stores under the Minyard banner, and 21 Sack 'n Save units.

The newest store is also producing its own tortilla chips, a first for Carnival, according to Shane Keil, bakery director for all Minyard stores.

"We had room for a fryer there, and we're cross merchandising salsas, both bottled and fresh from the deli," he said.

After a year's run at a Carnival store across town, the "tortilleria" concept has proved to be a hands-down success, with average sales of 170,000 tortillas a week, according to Keil.

The tortillas are packaged in two sizes of plastic bag, and are sampled continuously, he said.

"When we tracked sales of fresh tortillas against sales of those we get from a vendor, we found that we were averaging 1,700 hundred-count bags a week compared to 700 hundred-count bags of the vendor's product," Keil said.

The impressive volume of fresh tortillas is in addition to products the tortilleria supplies to the store's kitchen, which turns out a daily menu of fresh-made Mexican meals, as well as items such as fried and rotisserie chicken.

Now, with the tortilleria situated in a more prominent spot -- it's at the head of the fresh-food aisle in the new store -- Carnival is projecting even bigger volume.

"Based on 1,700 hundred-count bags a week at the other store, I'd say we'll hit 2,500 to 3,000 here," Keil predicted. "That's our goal, but it'll be great when we hit 2,000."

Even though it takes three associates to operate it, the tortilla machine's efficiency creates an enviable economy of scale that makes it a particularly profitable venture, Keil said.

One associate mixes the tortilla batter and feeds the machine, another watches the line, and the other receives the finished tortillas, stacks them and then packages them. This unit produces only corn tortillas -- by far the favorite over flour tortillas, at least in Carnival's market area, Keil said.

The mechanized tortilla line can turn out 80 tortillas a minute, which translates to 4,800 an hour. That kind of production, of an already high-margin item, brings to Carnival a gross profit of 65%. With labor and other costs figured in, the net is about 42% to 45%, Keil said. The retail price is $1.99 for a 100-count bag and 89 cents for a 36-count bag. Fresh chips cost 99 cents a pound.

The equipment (including conveyor belt) is 50 feet long and 8 feet tall, and is completely in the open. The only thing between it and the customer are three-tier shelves that display bags of tortillas and tortilla chips.

The tortilleria is an image-maker as well as a profit-maker, Keil said. He likens the attraction of warm tortillas to that of loaves of hot bread.

"It's an asset to us because the product is perceived as very fresh," he said. "Customers can watch production, and then there's that feel of a warm bag of tortillas."

Keil also noted that because the tortilleria is smack in the front of the store, it sets a "fresh and festive" atmosphere right away.

"It's the first thing you see when you come into the store," Keil points out. "At the store where we put the original one, you can see it, but it's on the other side of a row of pastry cases. This one's more prominent."

Meanwhile, just across the street from the new Carnival store, a unit of the Houston-based Fiesta Mart -- about the same size as the Carnival store -- is churning out tortillas on a similar machine. It also caters to the Hispanic population. And its prices are similar to Carnival's prices.

"But we feel we're a company that can compete with anyone," Keil stresses. "Ours has a better price image because our tortillas are just a little bit bigger.

"Our [store] is more visible," he adds. "You have to look hard to see theirs [Fiesta's tortilleria]. Ours is close to our Mexican kitchen at this store, too, and right across from a fruit and juice bar."

Seating for dine-in customers has been more than doubled at this store, which has room for 48 at tables and chairs. The only other Carnival store with a dining area is the one that features the original tortilleria, and it has just five tables accommodating 20 diners.

At press time, officials could not be reached to provide details on the expanded eat-in facilities and prepared-foods programs. New to the format, however, are outdoor food stands that sell tacos and fresh-roasted corn.

Other new features include a service meat department and a full-service floral department, both firsts for Carnival.

In a statement released on opening day (March 12), James Cook, director of Carnival operations, said: "The store is fun and colorful. Customers are going to enjoy shopping here because it's different. The minute you walk in, you can sense the excitement."

The new, from-the-ground-up Carnival store is situated in a suburban area that has a large complement of apartment buildings that house predominantly middle- to lower-income families. Many customers walk to the store, company officials said.