Tastes In Translation

8/1/2010

As traditional Hispanic foods continue to rise in popularity among mainstream shoppers, manufacturers and grocers must pull off a delicate balancing act: welcoming new fans without alienating core Latino consumers.

Mention Latino foods, and most mainstream consumers usually think of enchiladas or rice and beans. But how about Alpina brand Dulce de Leche (caramel spread), offered last month by Sedano's locations in south and central Florida at a price of $6 for two 6-packs? Or Patitas de Puerco en Vinagre (pigs' feet in vinegar), which Bay Area retailer Mi Pueblo Food Centers carries under its own brand and recently featured at $11.97 for a 5-pound jar? If current trends hold, they soon might.

Foods associated with Spanish-speaking cultures have never been more in demand. According to "Hispanic Food and Beverages in the U.S.: Market and Consumer Trends in Latino Cuisine," 4th Edition, a market research study from New York-based publisher Packaged Facts, the growing appetite for Latino cuisine among non-Hispanic Americans, in combination with the burgeoning U.S. Hispanic population, will help drive sales of such products to $10 billion in 2014.

"As the Hispanic community grows, the non-Hispanic consumer experiences a natural curiosity [about] our culture and food," notes Joseph Pérez, SVP at Secaucus, N.J.-based Goya Foods, the largest Hispanic-owned food company in the United States. "By diversifying their palates, the mainstream consumer can experience Latin American flavors right in their own homes. Two years ago, Goya Foods launched a ‘Latin Fusion' campaign with recipes that blend various Latin American favorites into one dish. The campaign was so successful among non-Latinos that the Goya Latin Fusion recipe book will soon be added to the other four regional cookbooks, which currently represent Central and South America, the Caribbean and Mexico."

To make sure it reaches consumers of all ethnicities, "Goya incorporates traditional retail promotional strategies such as POP displays, and in-store events and activities," says Pérez. "Perhaps our most successful strategy is our DSD model, which allows us the opportunity to tailor the proper product mix to fit the needs of stores based on the demographics of their surrounding neighborhoods."

In terms of new products, the rapidly expanding company — which recently added more than 1 million square feet in distribution facilities to accommodate its enhanced presence in the Midwest, Mid-Atlantic and South Atlantic regions — is planning to launch a dozen new products by the fall. Recently introduced items include Sazonador Total, a pan-Hispanic spice blend that can be used during or after cooking and now comes in 18-ounce and 5.5-ounce sizes in addition to its original 11-ounce container. Eyeing further expansion in the coming years, Goya has also increased its organic lineup to include beans and rice, alongside an expansion of its low-sodium offerings, which include not only beans and condiments, but also tomato sauce, vegetables and yellow rice mix, in tandem with its participation in the National Salt Reduction Initiative.

But increasingly, mainstream CPG companies are getting a piece of the Hispanic market action. In October 2009, Austin, Minn.-based Hormel Foods Corp. and Mexican food company Herdez Del Fuerte closed a 50/50 joint-venture agreement to create MegaMex, LLC, a freestanding entity that markets Mexican foods in the United States. Chino, Calif.-based MegaMex's portfolio includes such well-known brands as Chi-Chi's, Herdez, La Victoria, Embasa and Doña Maria, which appeal to Mexican-American and mainstream consumers alike. Notes MegaMex chairman Enrique Hernández-Pons Torres, "By forming [the company], we are able to better serve our retail partners and consumers while positioning our businesses for long-term growth."

And iconic American beer brand Budweiser has joined forces with Latino music superstar Vicente Fernandez for a three-year partnership that includes Bud serving as the presenting sponsor of Fernandez's U.S. tour, which kicked off last month in San Diego and continues in major markets through November. Additionally, the singer will appear in the brand's Spanish-language campaign encompassing TV, print, outdoor, interactive and point-of-sale components. "Through this partnership, Budweiser will help reach audiences across the country," says Eduardo Pereda, senior director of multicultural marketing at St. Louis-based Anheuser-Busch.

In-store Intelligence

To get a better handle on Hispanic grocery trends, however, it's instructive to take a look at grocers with significant numbers of Latino shoppers.

In center store, brand-loyal Hispanic consumers choose familiar names that offer a taste of home. "Jarritos drinks, Gamesa and Moderna cookies, Marinela and Bimbo [baked goods], Ariel and Foca detergents, Clemente Jacques and Valentina sauces, and Abuelita [chocolate tablets and mixes for hot chocolate] are some of the favorites in our stores," notes Juan Enchinton, business manager for innovation at Lubbock, Texas-based United Supermarkets, LLC, which operates the Hispanic-oriented format Amigos United, of the mostly Mexican shoppers who frequent his company's stores. "These items have been on the table for generations, and it keeps people in touch with the items and flavors that they grew up with."

But Enchinton acknowledges that the grocery section isn't just about providing trusted brands from back home: "Our center layout focuses on having imported items and similar mainstream items in the same location, along with seasonings and complementary items to complete the meal. We offer a strong presentation of items based on guest shopping habits, whether it's imported or mainstream."

"As a grocer who has served the Hispanic community for over six decades, we understood early on that product selections among the varying group of Hispanic customers was different and was not ‘one product fits all,'" says Maria Brous, director of media and community relations at Lakeland, Fla.-based Publix Super Markets, whose Latino customers hail "from around the globe, including the [Caribbean] islands and South and Central America," and which operates four Publix Sabor stores aimed at this demographic. "We have worked extremely hard to customize the product selection in each store."

Among San Jose, Calif.-based Mi Pueblo's center store top sellers are masa (dough for tamales) and Goya refried beans, but such mainstream items as salad dressings and wheat bread (as opposed to tortillas) are growing in popularity among assimilated and second-generation shoppers, notes Perla Rodriguez, VP of public affairs at the 19-store chain, which caters mainly to Mexicans, Salvadorans, Hondurans and Guatemalans, although its stores are also shopped by Filipinos, African-Americans, Pacific Islanders, Native Americans and even Anglos.

Not surprisingly, Hialeah, Fla.-based Sedano's is "big on rice sales," according to director of marketing Javier Herrán, with such other staples as beans (dry outsells canned), olives, cooking wine, tomato sauce, and frozen plantains and yucca proving to be fast-moving items among customers. Brands preferred by Sedano's shoppers include the Conchita lines of beans, pasta, fruits and other items, and the Yo Gusto brand of drinkable yogurt. The 34-store grocer's clientele is primarily Cuban, although South Americans such as Colombians are also frequent shoppers.

The grocers haven't found all center store category growth to be uniform, though. "Offerings in frozen foods have not grown to meet the needs of Hispanic guests, although you do see some new lines entering the market, such as La Huerta and La Michoacana," says United's Enchinton. "There is definite opportunity for growth in these areas. In the dairy, there are opportunities such as Lala and Mexican cheese like La Vaquita."

Meanwhile, Sedano's last year developed its own line of private label frozen products, offering such items as tostones (fried green plantains) in an expanded section as more Latino shoppers opt for the greater convenience of pre-sliced and/or-cooked items. The chain also offers under the Sedano's brand shelf-stable items like beans, rice, canned fruit and sofrito (a type of seasoning).

In communities with heavy concentrations of Hispanic shoppers, Publix stores feature a "frozen food section [with] a larger selection of frozen roots, vegetables and fruits," notes Brous.

"Fun for All"

As more non-Latinos learn to appreciate ethnic cuisines, Hispanic-oriented stores and grocery sections are now no longer visited only by Spanish-speaking shoppers, so retailers are keen on making these newer customers feel welcome without losing their loyal base.

Notes Enchinton: "We have a very diverse guest base, and often see non-Hispanics shopping in our stores for Mexican products. As Mexican food continues to grow in popularity, so will the need for Hispanic concept stores in all areas." He adds that United "market[s] to all groups through radio and print, and [has] events in the stores that are inclusive and fun for all. We are actively seeking to grow our brand through caterings and events that reach non-Hispanic guests as well."

According to Rodriguez, along with nostalgic Latino shoppers willing to "drive 30 miles to create a cultural experience at home," Mi Pueblo stores also serve as a "destination place" for foodies of all ethnic backgrounds. The retailer's "great prices" are a powerful incentive as well, she notes, adding that all of the grocer's shoppers "really love what we have to offer."

Sedano's Herrán says that his company is beginning to reach out to what he calls "newer, young second-generation Hispanic consumers" who enjoy granola bars and Wonder bread as well as the authentic dishes of their homelands.

"Publix Sabor locations are tailored to meet the needs of Hispanic and non-Hispanic shoppers in one location," emphasizes Brous. "As shoppers become more savvy and develop expanded palates, [these] foods resonate with all shoppers."

"We are actively seeking to grow our brand through caterings and events that reach non-Hispanic guests as well."

Juan Enchinton, United Supermarkets

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