Spicing Up Sales

Close attention to authenticity, heritage and specific taste preferences is critical to winning over the increasingly influential base of Hispanic consumers.

The Shoppers Food and Pharmacy on Riverdale Road in New Carrolton, Md., and the Giant Food supermarket on Arliss Street in Silver Spring, about 12 miles away, have one important factor in common: They understand the need to serve a diverse customer base, including a large mix of customers of Hispanic heritage.

They have something else in common, as well: Elda Devarie and her distribution company, EMD Sales International Foods.

Both of these chain stores have made a substantial commitment to reaching out to the communities where they're located, understanding their demographics and the people who live there, and providing the products that those customers prefer, whether they're from Mexico, Cuba, Puerto Rico, El Salvador or anywhere else south of the border.

In many ways, Elda Devarie is their coach.

For 21 years, Devarie has been building her business, which started in the back of a minivan and now operates a fleet of 17 trucks out of 62,000 square feet of warehouse space in the Washington suburb of Landover, Md. The company generates some $32 million in annual sales and plans to move into a new 80,000-square-foot facility, which will include refrigeration, this year.

Devarie, whose native country is Puerto Rico, has been doing it by helping retail operations large and small understand the cultural differences and product preferences of their varied customer bases, providing those products, and offering merchandising advice.

"When I go to work for my customers, I take my EMD hat off and become one of them. I want to do what's best for that customer," says Devarie, noting that her company has been working with both the Shoppers and Giant stores for 17 years.

Store Within A Store

Devarie took an important step when she persuaded her customers to stop setting apart their ethnic food aisles by brand and instead merchandise products according to category — beans from all vendors together, the same with rice, tortillas, salsa, spices and juices — with all of the other products carried in that department.

"I asked my customers, ‘Why do you treat us differently?’ It's common sense. We want to be able to shop conveniently, too."

The result is evident, particularly in the Shoppers Food and Pharmacy, where EMD Sales provides some 1,000 items in 350 lineal feet of grocery products covering two aisles in center store. Yes, Goya has a huge presence, but products are presented together by category, not lumped together by brand, in a "store-within-a-store" format. "We are working for the consumer. We want to make it good for them," Devarie says.

Today, her company serves Stop & Shop/Giant-Landover stores, Weis Markets, Wegmans, FoodWay, Food Lion, SuperFresh, and more than 500 independent stores and other wholesalers. Her 60-member staff includes people from 17 countries.

In a report published in December, Packaged Facts predicted that Hispanic buying power will reach $1.3 trillion in 2015, a cumulative increase of about 25 percent. "Considering that one in six Americans is now of Hispanic heritage, Latino consumers will remain influential over the ensuing years, especially because there are a significant number of high-income Latino households," says Don Montuori, publisher of New York-based Packaged Facts.

The report advised marketers targeting Hispanic consumers, however, that they must recognize substantial regional differences in the composition of the Hispanic population. For instance, Latinos living in western and southwestern states tend to be of Mexican heritage, while those in the Northeast have a much more varied country-of-origin background. All of these differences, of course, are represented in the food preferences of consumers from individual Latino countries.

Garrison Miller, director of the Shoppers New Carrollton store, says the location recently did a reset of the ethic food aisles in an effort to help boost sales. Devarie and her team helped, and were pleased that one of the products they supply, Tropical Grove juices, was given placement in the store's Wall of Value just inside the front door.

Certainly, Miller wants to generate as much business as possible from his Hispanic customers, but he's also mindful that many non-Hispanic consumers enjoy Latin American food and that price is an important factor these days. "Tropical Grove is a good example," he says. "It's a strong price point and its flavors are enjoyed by many consumers."

Arly Aguirre is EMD's key account manager for Shoppers. "This is a very nice layout here," he says. "As a consumer, if I come here, I will find about anything that I need."

Focus on Neighborhood

At the Giant Food store in Silver Spring, Gary Budd, center store regional sales and merchandising lead, says ethnic food sales have produced double-digit sales increases year-to-year for the past several years.

"Every time we refresh one of our stores, one of our most important focuses is ethnic merchandising, including Hispanic foods," he says. "We want to make sure that we are right for our neighborhood. We want to represent the community that we reside in, so we try to take care of every potential need that they have. We certainly utilize Elda and her company to do that."

It's essential for retailers to fully understand the diversity of tastes within the Hispanic community, and how individual product offerings can meet those needs, affirms Joseph Perez, SVP of Goya Foods Inc. In fact, he contends, the biggest mistake that retailers make is to assume that all Spanish-speaking customers eat essentially the same products.

"You have to tailor-make each shelf set," he advises, noting that his company works with retailers on category management to help maximize profit of available shelf space. So he sees a big part of his company's job — in common with Devarie, by the way — as educating retailers and helping them understand these differences and how to respond.

Goya, the dominant brand in most supermarkets' Latin American departments, is now marking its 75th anniversary. In January, the company launched several on-pack and online promotions giving consumers an opportunity to win cash and other prizes. Goya.com will feature "Goya's 75th Birthday Bash," an interactive party that includes Goya's Greatest Fan contest.

In March, the company will hold its One World/One Brand Trade Show near its headquarters in Secaucus, N.J., offering supermarkets and bodegas discounts and incentives. Also in March, Goya will team up with The United Way in a nationwide effort to distribute product to food pantries.

What About Snacks?

Snacks offer a good opportunity to increase sales of Hispanic food products, according to Mauro Gomez, VP of sales at Prime Choice Foods, a Denver-based manufacturer of organic, natural and kosher snacks such as tortilla chips, Hispanic chips and baked snacks.

He also emphasizes the need for retailers to understand regional differences and resulting taste and product preferences of consumers, but also stresses the need for manufacturers to include bilingual descriptions on product labels to attract non-Hispanic consumers. "So the messages need to be simple, plain and straight to the point," Gomez says.

"I'm one of those shoppers who looks both for products that I can relate to — that I've grown up with — as well as new products," notes Gomez. "Hispanic consumers are very loyal. They are looking for those brands with which they are familiar, but they will try new things, too." He adds that those factors need to be kept in mind when developing category schematics and planograms.

At Rudolph Foods, a pork rind and crackling snacks manufacturer based in Lima, Ohio, Hispanicconsumersareacritical component of the customer base. The company's Pepe's brand Chicharrones are hugely popular, says Mark Singleton, VP of sales and marketing.

"We went to Mexico City and Monterrey to do focus groups to find out how consumers still use our products, and what they like and don't like about them," he explains, adding that providing authenticity is critical to the brand's success. Among its plants is one located in Pachuca, Mexico, which produces items specifically for sale in Mexico.

Rudolph Foods, launched in 1955 by John Rudolph, is now the largest seller of pork rind products in the world, Singleton says, confident that growth will continue. "Twenty-two percent of all U.S. citizens 18 years or younger are Hispanic," he notes. "There is no telling where the future is going."

Seasoned Marketing Techniques

Former president of Mexico Vicente Fox will be the keynote speaker at the seventh annual Hispanic Retail 360 Summit to be held Aug. 10 through Aug. 12 at the Hilton La Jolla Torrey Pines in Southern California.

Hispanic Retail 360 is the retail industry's premier event for retailers and marketers seeking to increase their business with Hispanic consumers in the United States. A high-level conference and tabletop exhibition, the program will include an impressive lineup of speakers from retailers, consumer product goods manufacturers, and leading multicultural marketing authors, consultants and agencies.

Presenting sponsor of the summit will be PepsiCo. "Supporting the Hispanic consumer's needs with brands that stand for quality — household names such as Quaker Oats, Tropicana, Gatorade, Lay's and Pepsi-Cola — is core to our growth strategy," says Marie Quintana, SVP of PepsiCo multicultural sales.

For more information, visit www.HispanicRetail360.com.