TORTILLAS ARE ROLLING

AMY I. STICKEL

With consumers becoming more health-savvy and better educated about ethnic foods, the demand for tortillas is rising, according to retailers surveyed by SN. Retailers in different markets across the country noted an increase in tortilla sales. In the Sunbelt, tortillas are a staple food, but sales are also increasing in non-Hispanic areas, retailers said.

Tortilla sales have been steadily growing by about 12% every year for the last 15 years, according to Irwin Steinberg, executive director for the Tortilla Industry Association, Encino, Calif. He said TIA tracks tortilla sales to restaurants as well as supermarkets.

Steinberg, who spoke to SN just prior to TIA's fifth annual convention, held Sept. 20 to 22 in Las Vegas, said that growth rate is expected to remain strong for the next several years at least.

Steinberg said the immigration influx from Mexico and South America has "obviously" helped increase the

popularity of tortillas, but he said changing consumer perceptions have played a key role as well.

"We spend a lot of time telling people it's not a spicy food but a traditional soft bread," he said.

Some of the biggest growth areas for tortillas, particularly as a flat bread, have been outside the Sunbelt, Steinberg said. People are just discovering tortillas in other areas of the country.

Tortilla sales in supermarkets reached $204.8 million for the 52 weeks ended July 17, a 3.9% increase over the previous year, according to Information Resources Inc., Chicago. In unit volume, tortilla sales totaled 218 million pounds, a 5.8% increase over the same period. Those figures also include the sale of won ton wrappers and egg rolls, although the vast majority is tortillas, according to an IRI spokesman.

Several retailers said they offer tortillas in the bread aisle and the refrigerated case. Several disagreed on which was the most authentic type of tortilla.

Besides the traditional corn and flour tortillas, several manufacturers have introduced wheat tortillas as a healthier option, according to TIA. Low-fat and fat-free tortillas are also becoming popular. Even Wonder Bread, St. Louis, is producing a line of tortillas.

"The beauty of the tortilla is it's something convenient. It's a quick, value-priced meal," said Pat Brooks, director of frozen food, dairy and deli at Save Mart Supermarkets, Modesto, Calif.

Brooks said tortillas have been a strong category and he expects them to grow.

Save Mart units generally do not merchandise tortillas in refrigerated cases, he said. "In this particular market, we found warm, fresh tortillas work best," he said. The tortillas are placed on five or six shelf end display racks. In certain units with a larger Hispanic population, two racks are needed, he said.

Brooks said cross-merchandising tortillas with other ingredients like salsas and cheeses has been very successful. Joe Sisneros, vice president of perishables at Raley's, West Sacramento, Calif., said the appeal of tortillas has spread far beyond the local Hispanic population.

"The average Western region home buys tortillas as a staple item," he said. "I heard a statement once that if you opened all the refrigerators on the West Coast, most would have tortillas."

Raley's merchandises the tortillas by themselves, according to Sisneros.

"They're displayed prominently," he said. The tortillas are merchandised near the meat and deli sections, which lends itself well to a cross-merchandising effect.

Sisneros said he expects tortillas to continue selling well. "There is no question," he said. He said new low-fat and low-cholesterol tortillas and consumers discovering new uses for them will help fuel continued growth.

Glenn Laucus, a grocery buyer at Southwest Supermarkets, Phoenix, said he sells more tortillas than bread.

"We have a complete aisle devoted to tortillas," he said. Southwest would never sell refrigerated tortillas, since those aren't authentic, he said. "It has to be a real tortilla," he said. Southwest doesn't cross-merchandise its tortillas either, he said. The demand for authentic tortillas is so great that one manufacturer who switched from lard to corn oil had to switch back, Laucus said. He said corn oil is healthier, but lard makes a better tortilla that doesn't crumble as easily. Consumers demanded the more authentic, if less healthy, lard-based tortilla, he said. "It's one of the things our customers look for," he said. Harvey Godwin, head buyer at Food Folks, Lumberton, N.C., said a large migrant working population has increased sales of tortillas considerably.

"It's definitely a growing category. It's not just a fad or fly-by-night kind of thing," he said.

Unlike the West Coast retailers, Godwin said the tortillas at Food Folks are refrigerated. "The true tortilla lover uses fresh rather than dry," he said.

He said the demand for true ingredients means a constant upgrading of the category. "We have to have authentic Mexican food," he said.

Godwin said he "absolutely" cross-merchandises, particularly with cheeses. Besides the shredded American variety, Food Folks imports cheese from Mexico, he said.

Godwin said he sees the increasing Hispanic influence as a wide-ranging one. "It's not only food, but language and probably culture." Retailers outside areas of direct Hispanic influence said they have noticed an increase in tortilla demand, but it hasn't been as great as that in Hispanic regions.

"We've seen growth over the last 15 to 20 years, but not the kind everyone is talking about. Twenty percent at most," said Richard Attardi, director of dairy and deli at Twin County Grocers, Edison, N.J., the cooperative wholesaler for Foodtown stores.

"When people talk about huge growth, maybe they mean in restaurants. I haven't seen so much in our stores," he said.

He said many of the stores Twin County supplies place the tortillas in the dairy case next to the shredded cheese.

Attardi said he has noticed more ethnic foods available throughout the grocery departments. That trend has spread to other stores. "Every little store has some kind of variety," he said.

Howard Hodgson, direct-store-delivery buyer at Heinen's Inc., Warrensville, Ohio, said tortillas have not really been a growth category for him. "Honestly, no," he said. He attributes some of the lack of enthusiasm to Heinen's largely suburban, Midwestern market. He said there may be some future growth in the category. "Mexican is getting to be a bigger item."

Tortillas are becoming more popular in the metro New York area, according to Scott Rzesa, dairy director at D'Agostino Supermarkets, Larchmont, N.Y.

"It's been a growing food here, but not a staple like it is on the West Coast," he said. "It's moving in that direction. Ethnic foods are becoming more universal."

He said tortillas sold in the dairy case are not specifically cross-merchandised with cheese, but rather with fillings and salsas."They kind of form their own little section," he said.

Rzesa said D'Agostino is taking a "careful look" at a West Coast vendor who is offering a fully integrated product line of tortillas, salsas, seasonings and fillings.

One Midwestern retailer, who asked not to be named, said, "It's a segment that's growing. The category overall is growing."

He said his chain is selling tortillas both in refrigerated cases and bread aisles, although the refrigerator tortilla line is more fully developed.

Most retailers said vendors have been supportive of the category.

Godwin of Food Folks said vendors are getting serious about an increasingly competitive category. "It seems like everybody and his brother is getting into the tortilla business now," he said.

Attardi of Twin County Grocers agreed. "It's a very profitable item for them. We have no problem doing promotions," he said.

Save Mart's Brooks, D'Agostino's Rzesa and Southwest's Laucus all said they were running tortilla promotions at least fairly frequently.