DIVERSITY IN THE AISLES

DAN ALAIMO / Additional reporting: Wendy Toth

Specialized health and beauty care products for African American consumers is a category few retailers can afford to be without.

While many retailers are now focusing on ethnic products, especially for the burgeoning Hispanic population, displays of products for African Americans have been part of supermarket HBC sections for many years. However, while later generations of Hispanic customers tend to acculturate and gravitate to mainstream formulations of national-brand products, physiological differences, primarily relating to hair and skin care, call for continuing specialty merchandising for blacks.

Unlike the Hispanic demographic, which tends to form in clearly defined geographic areas, African Americans are dispersed throughout many communities across the country, so suburban supermarkets, as well as urban stores, need to stock these products. They are typically supplied by a handful of distributors that have developed an expertise in selling HBC products for ethnic and black consumers.

Two key trends were identified by retailers and wholesalers interviewed for this feature during a recent GMDC conference:

Expansion due to the growing spending power of the African American population, and retailers' increased recognition of this. Many supermarkets are going beyond the 4-foot sets typically seen in stores.

New products that require a constant freshening of the categories, but result in increased sales, drawing customers away from other channels to the supermarkets that are on top of them.

After looking at demographics, Ingles Markets, Asheville, N.C., has expanded its African American

HBC sets in several urban Georgia stores, said Dan Spears, director, HBC/GM.

Ingles has about 40 stores where this category is serviced on a direct-store-delivery basis by a distributor that specializes in ethnic products. "We try to identify the stores where it's necessary to change our mix, and we are adding," he said.

"African American is a different market than the Hispanic market. We look at it as an opportunity for both. With the size of stores we have, we have room where we can market to the Hispanic customer as well as the African American customer," Spears said.

"There's a big difference between the needs and wants of the Hispanic shopper, for example, vs. the African American shopper," said Larry Ishii, general manager, GM/HBC, Unified Western Grocers, Commerce, Calif. Hispanic shoppers' purchases tend to be more culturally driven, while African Americans tend to buy HBC products on the basis of physiological differences, particularly in terms of skin and hair care, and shaving needs, he said.

With the help of a specialized distributor, the operating companies of Ahold USA, Braintree, Mass., have reset their African American sections within the last year or two, said Wayne Bryant, director of GM and HBC sourcing, of Ahold division American Sales Co., Lancaster, N.Y. "Our trends are up, our sales are up," he said.

"We have made a conscientious effort to bring new products into the categories because having a fresh look in the department is important and African American consumers are looking for what's new. They want us to have the products that are relevant, that are timely, that are out there, that match what they're seeing in advertising, and the magazines that they read. That's important and I think we're doing a better job today than we were doing in the past," Bryant said.

BUYING POWER

"Retailers are becoming increasingly more sensitive to the buying power of the African American consumer," said Jim Normandin, merchandise manager for distributor Beauty Enterprises, Hartford, Conn.

For example, Winn-Dixie Stores, Jacksonville, Fla., has started to expand its product offering using an "ethnic superstore" concept, he noted. "Select stores are revamping the existing ethnic product selection and adding expanded hair color, trial size, electrical appliance, synthetic and real hair extensions, and fashion hair accessories sections. This year, 30 to 35 stores will have expanded and it is hopeful that another 35 will expand next year," Normandin said. This is happening in the Jacksonville, Miami, New Orleans and Birmingham, Ala., markets.

The same time constraints experienced by other consumers are affecting African Americans, who also look for the convenience of one-stop shopping, he said. "To that end, retailers have embraced the African American consumer with regard to affording them the selection of product assortment formerly offered primarily in drug stores and beauty supply outlets. Additionally, supermarket chains are realizing just how loyal this consumer is to those retailers who support them and their personal needs," Normandin said.

"Savvy retailers recognize that African American consumers not only shop in the communities in which they live, but they also shop where they work," said Geri Duncan Jones, executive director, American Health & Beauty Aids Institute, Chicago. "As a result, many retailers have added ethnic HBC sections in their suburban stores."

Hair care is the biggest category for these shoppers, she said. There are nearly 40 million African Americans in the U.S. and about 60% are under the age of 35, she said. Citing numbers from the U.S. Census Bureau, African Americans comprise 13% of the population, but they are responsible for 30% of hair care sales, Duncan Jones said.

"In fact, African American women spend three times as much on hair care products as the average consumer. Because African American women are the predominant supermarket shoppers, it is incumbent on retailers to ensure that the products she desires are readily available and easily accessible during her shopping visit," she said.

As to product trends, "natural and organic ingredients are on the rise in ethnic hair care to help meet consumer demand for healthy hair," she said.

"This year and next will continue to show growth in natural hair styles," Normandin confirmed. "This trend has and will continue to result in reduced sales of traditional relaxers."

Sammy Snell, director, HBC/GM, W. Lee Flowers & Co., Lake City, S.C., recognizes the importance of new items, but hasn't seen many of them in this category. "Unfortunately, that business is still flat. There haven't been a lot of new items or trends, although it's still a viable category for us." Flowers has about 200 stockkeeping units in African American HBC, he said.

When there are new products, keeping up with them is critical, he said. "About every six months we have to change to new items, because once an item slows down, it dies," Snell said. Lately, most new items are hair care kits, generally for women, he noted.

Spreading the Word

It's not enough to stock health and beauty care items for African Americans. Retailers also have to promote this offering, supermarket executives told SN.

"We've taken a new approach as to how we market to that consumer," said a nonfood executive with a Southeastern retailer. "We try to make sure that when there are key events and holidays that we promote the items. We try to make sure to promote the items with frequency in our ads and the circulars and we look at it by segment: hair, skin and maintenance items, just so we can make sure we have the items that the consumer needs," he said.

Many African American shoppers go to specialized bath-and-beauty suppliers to get these HBC products, he noted. "So it's an opportunity for the manufacturers who make the items to market better to that consumer. They have to find a new venue. The retailer needs to recognize that they have that consumer in their store and do things to better embrace that consumer - to let them know they offer the items that they need and that they want to fulfill their needs," he said.

"For us it's still growing," said Larry Carnes, category manager, Valu Merchandisers, Kansas City, Kan. In some areas, particularly Memphis and Nashville and elsewhere in Tennessee, Valu is expanding its selection of products for African Americans to as much as 16 to 20 feet, he said.

Hair care is the strongest category, along with skin care and shaving, he said. The affordability of buying these products in stores as opposed to going to a salon results in more-frequent purchases, he said.

Valu has seen the African American market grow along with promotional displays keyed to such events as Black History Month, as well as back to school, Mother's Day, Father's Day and other holidays, Carnes said. Additional displays and good signage are key to making these promotions work because the geographic dispersion of stores with the right demographic makes it difficult to run ads, except in metro areas like Memphis and Nashville, he said.

At 4% to 5.5% sales growth per year, "it's not as strong on a percentage basis as some other categories, but I still think there's a lot of upside potential too in underdeveloped areas, Carnes said. In some markets, stores Valu services have nearby military bases that provide strong ethnic demographics. "The problem we've had with our stores is they were unwilling to have a dedicated department, or they had a 4-foot section where they needed an 8 or 12. That's what we need to address to grow our business," he said.

Because of different physiological factors, "you need to market to the Afro-Americans differently," said Doug Schwab, director of health, beauty and personal care, Supervalu, Eden Prairie, Minn. "Typically, we would put the products together in a separate section that is easy to find and easy to promote."

Hair and skin products are the main products for this market, but the current focus is on the growth of the skin care category, which also is true of the general population, he said.