WRAP-UP

Matthew Enis

Tortillas are overachievers among non-dairy items in dairy cases.

Unlike refrigerated pasta and dough products, tortillas thrived during the anti-carb storm, and continue to enjoy healthy growth. A staple in Hispanic homes, tortillas have broadened their appeal with Anglos looking for alternatives to traditional breads.

At Olean, N.Y.-based Olean Wholesale Grocery Co-op, dairy, frozen food and bakery buyer Mark Kowalski said the refrigerated tortilla category has grown enough at the co-op's member stores for him to consider adding a private-label brand to the company's offering.

"I think a lot of customers feel that they're not filling up on a starchy bread when they're eating these products, and I think that now, they're learning different ways to use flatbreads and tortillas," he said. "Plus, some of the promotion schedules that we've had have been pretty strong."

Others agreed. "Refrigerated tortillas are a very high-volume item for us," said Jim Roesener, director of dairy and frozen merchandising for Clemens Markets, Kulpsville, Pa. "We try to merchandise them as close as possible to the shredded cheese and promote them at least twice a quarter."

Across the country, tortilla consumption varies. Those differences must be taken into consideration when retailers work out merchandising strategies, sources said.

"What you see is a very different development of the tortilla category from the West Coast to the East Coast in the U.S.," said Asima Syed, senior vice

president of marketing for Mission Foods, Irving, Texas. "In the West, about 75% of households have used tortillas in the past year, compared with about 35% in the East."

Of course, the category is also more mature in the West, growing about 5% there during the past year, said Syed, citing sales data. On the other hand, the category is skyrocketing in the Northeast, growing about 20% during the same period, albeit off a smaller base.

How customers use tortillas depends a lot on how familiar they are with the bread. While many retailers position the products in their dairy cases out of necessity, Syed said a spot next to the shredded cheese could be ideal in a market where the category is still catching on.

"[Tortillas are] used for Mexican-type dishes when they first enter a consumer's home, and then as the consumer gets more comfortable with them, like California consumers are now, for example, they start using them for everything," including sandwiches, snacks and even desserts.

At Chandler, Ariz.-based Bashas', the chain's Hispanic and Anglo consumers are extremely familiar with the versatility of tortillas. Like many supermarkets in the Southwest, the retailer took the category out of refrigeration years ago, and currently merchandises it on gondolas and endcap displays. Category manager Tom Buttes agreed that tortillas are a great item for cross promotions.

"You can't just buy a package of tortillas," he said. "You have to also buy a meat item, vegetables such as peppers or tomatoes, and salsa or guacamole. It really is a great product to sell for the secondary purchases that those customers are going to make."

In fact, for retailers who are able to source tortillas locally, make them in store, or just sell sufficient volume to curtail concerns about shelf life, the challenge may lie in finding the best locations and cross-merchandising promotions. Retailers and other experts shared a variety of opinions, noting that placing them in almost any perimeter department, near meats, cheese, produce or even seafood, could work well. Customers who regularly buy tortillas generally feel comfortable in the kitchen, and do a lot of cooking at home, Syed said.

In stores that cater to Mexican shoppers, tortillas are often merchandised in up to five separate locations, noted Allen Lydick, president of Raleigh, N.C.-based Mexigrowers, an ethnic retail and food-service consulting firm.

"You can put them in almost any location in the store," he said. "You're not just selling tortillas, you're selling related categories for a complete meal."

Lydick cautioned retailers against making generalizations about Hispanic tastes, however. "You might think that Miami, for example, would be a strong market for tortillas, but it's really not," he said. "Puerto Ricans and Cubans, who make up the majority of Miami's Latino community, don't eat tortillas as a dietary staple."

The tortilla originated in Mexico, and Mexican families continue to be the most avid consumers of the products, eating several of them with almost every meal.

Among those consumers, corn tortillas, specifically white corn, are the strongest sellers. That segment is up 5% over last year, generating $338.7 million in sales for the 52-week period that ended April 16, according to ACNielsen, Schaumburg, Ill.

Flour tortillas have also made significant inroads among Mexican-Americans in Texas, as well as in northern Mexico, and they also continue to be the most popular type of tortilla among non-Hispanic consumers, leading to 11% growth during the same period, for more than $653 million in sales.

While regular tortillas and their flavored wrap cousins aren't necessarily lower in carbs or calories than a slice of regular bread, both categories grew steadily during the heyday of low-carb diets, even managing to adopt a healthy image during that time.

Much of that perception was fostered by the restaurant industry, which has scrambled in recent years to offer leaner-looking sandwiches, often drawing ideas from the West Coast, where tortillas have a long reputation for versatility. As a result, wraps have developed a momentum of their own, stretching tortillas in new directions of flavor and color.

"The growth of wraps has probably been driven by fast food and casual dining restaurants promoting those items," said Buttes. "The food-service side eventually tends to bleed over into retail, with people beginning to look for those kinds of products at their supermarket."

Buttes emphasized that Hispanic customers will buy flavored wraps occasionally, but that traditional corn and flour tortillas remain their core purchase. "The gains in wraps have really been among non-Hispanic consumers," he noted.

Trading on their better-for-you image, many tortilla and wrap makers have recently expanded their product lines. Several, including Tumaro's, La Tortilla Factory, Mission and Ole, have recently introduced whole wheat and reduced carbohydrate versions of their tortillas, and several companies have already begun labeling their products trans fat free. La Tortilla Factory also recently introduced a line of olive-oil infused wraps, highlighting the products' healthy monounsaturated fat content.

These types of messages may be resonating as well. Tortillas featuring a whole grain message on their label grew more than 73% during the 52 weeks ending April 16, according to ACNielsen LabelTrends.

Though tortillas offer a lot of promotion potential for other fresh departments, Lydick said keeping the products in the dairy case was still a serviceable solution for now, as long as retailers recognize when the category is ready to grow.

"I don't know if stores in the Mid-Atlantic or Northeast will ever delete tortillas from their refrigerated sets," he said. "There will always be a customer who will be used to seeing them there."