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Grocery Chains Tweak Formats, Offerings to Lure Hispanics DALLAS (Dallas Morning News) August 24, 2005 - Reina Rosales, a 32-year-old woman in a ponytail, jeans and sneakers, wheels her cart around the Fiesta grocery store like a pro athlete. Her 7-year-old daughter picks tomatoes, her husband selects mangoes and she grabs the freshest melons, meat and milk. Supermarket executives everywhere suddenly seem to be after her heart: Rosales is a woman who still cooks. "I cook all the time, three times a day, seven days a week," said the immigrant from Mexico. "I have to with two kids." Hispanic households spend 46 percent more than the general population on groceries - despite having significantly lower incomes. Hispanics go to the grocery store a whopping 26 times a month, or practically every day, the Food Marketing Institute said. Moreover, the Hispanic population is growing four times faster than the general population. That's why supermarket executives like Ron E. Johnson of Minyard Food Stores Inc., a Texas supermarket chain, are studying Spanish and learning that cactus is a vegetable and that candles to Catholic saints are must-have items. He's finding that Mexicans not only bring home the bacon, but the pig's head and feet, too. The fight for the Hispanic consumer comes as Wal-Mart Stores Inc. punches the profits of big grocery chains like a pinata. The Arkansas-based chain now claims more than one out of four grocery consumers in Dallas-Fort Worth. Traditional supermarkets have been slow to fight back - Albertsons Inc., for one, is still losing ground. But some are coming around, figuring out how to serve customers in ways that Wal-Mart can't or doesn't. Against that backdrop, Johnson, chief executive of the privately held grocer based in Coppell, Texas, recently commissioned a series of market studies to evaluate the company's existing Hispanic strategy. Like a culinary anthropologist, he took trips to the Hispanic capitals of Guadalajara, Mexico; Los Angeles and Houston to muscle up mentally for the North Texas food fight. The result: Minyard will convert nearly a dozen of its general-market stores to its Hispanic-centric Carnival format and open about a dozen new stores under the Carnival brand. With the conversions, Minyard will have more Carnival locations in its current 68-store portfolio than it does Minyard or Sack N' Save stores. "Our focus and commitment is on the Hispanic consumer," said Johnson, who's been CEO since October, when a Fort Worth-based private investor group bought the chain from the Minyard family. "And there will be a lot of emphasis on service and attention to product." Beyond that, the Minyard company will undergo a multicultural metamorphosis, Johnson said. Its demographic studies have drilled down to the trade area of each store to find out ethnic compositions. Thus, greater attention will also be paid to African Americans, Asians and Eastern European immigrants, he said. It's as though Carnival were taking the playbook of Fiesta Mart Inc., which has catered to immigrant markets since 1972, when it opened its first store in a Mexican barrio of its Houston hometown. Fiesta stores feature in-house tortilla production. Chiles come in dozens of temperatures. There's cactus - with or without needles. "Any supermarket in their right mind should have Hispanics in their business plan," said Dennis Daily, the bilingual store manager of a Fiesta in northwest Dallas, "and not just in the Southwest, but across the nation." For one thing, Hispanic households have more mouths to feed. A first-generation Hispanic household contains 3.7 persons and tapers to three by the third generation, vs. a first- or third-generation non-Hispanic white household with 2.5 persons, according to 2001 data from the Pew Hispanic Center in Washington. The median age of Hispanics is more than a decade younger. Hispanic households also have a deep tradition of keeping their kitchens humming, and they dine out less, said Allen Lydick, a supermarket and food consultant who operates MexiGrocers.com. "Hispanics cook a lot more than Anglos," he said. Even when the woman works outside the home, Lydick said, "You see them getting up earlier to prepare meals so that the family will have it later in the day." The Hispanic food wars are particularly obvious near Daily's Fiesta store. Carnival, Fiesta and La Mexicana, with their eye-popping color schemes, are within a block of each other. Carnival and Fiesta, the two biggest players, are both beginning to cater to Salvadoran immigrants with higher-fat sour creams and pastries such as quesadilla de arroz. La Mexicana caters to meat lovers. Fiesta tries to capitalize on the family-event nature of Hispanic grocery shopping. It offers marimbas on weekends, soccer game ticket sales and clowns who paint children's faces for free. Carnival tries to edge out its competitors with extra services for its immigrant customers. It's teamed up with Monterrey, Mexico-based retailer Famsa, or Fabricantes Muebleros. Customers can look at a Famsa catalogue or product displays at the grocery store and order items for delivery to relatives in Mexico via Famsa stores. At La Mexicana, a Bienvenidos sign in red neon hangs over the meats with Las Vegas-like flair. Underneath lies a pig's head. Next to it is a cow's head. All around are cuts of thinly sliced beef sirloin, called milanesas. Hispanic immigrants prefer fresh ingredients, but they don't limit themselves to supermarkets. They also shop at specialty meat markets, or carnicerias, and bakeries, or panaderias. Carnicerias are an important part of the grocery shopping experience, said Arturo Violante, a Mexican immigrant who's the director of the Greater Dallas Hispanic Chamber of Commerce. "It is the same cow, but we cut it differently," Violante explains. "People are looking for special cuts." Violante ticks off the cuts he likes: not-quite-paper-thin milanesa; cecina or machaca, a dried meat that's not as dehydrated as U.S. jerky; and adobo, beef in a chile-based marinade. To feed his fix, he goes to Monterrey Super Mercado - a Dallas-based chain with six stores and two more to open soon. At 10 p.m. on a Tuesday night, the tortilla machines at the store are still cranking. Nearby, the butchers are at the ready. Lupita Beltran eyes the wares. Her family serves meat seven times a week - and it spares no parts. Kidneys, hearts, intestines, tongue. "I come from a long line of organ-eaters," Beltran jokes. Turning serious, she said, "Meat is a protein, especially for workers. It gives energy and it's like a superfood." Beltran is a third-generation American who shops at markets that cater to Mexican immigrants - as well as Safeway Inc.'s Tom Thumb and Wal-Mart. Wal-Mart has responded to Hispanic population growth with such items as Mexican pastries and in-house tortillerias. The retail giant benefits from high name recognition among the newcomers because it's the largest retailer in Mexico. Some marketing specialists say that after a few generations, Hispanics will shop only in the so-called traditional grocery stores. But Beltran disputes that. She thinks her family will zigzag to both types of markets for years to come. Supermarkets that cater to Hispanics simply offer "wonderful produce," she said. Whether Hispanics continue to zigzag as their U.S. roots deepen may be a moot point for some time. One in six persons living in Dallas-Fort Worth is now foreign-born, according to the U.S. Census. It will be several decades before that slice of the market is fully absorbed into the frozen-food aisles and self-checkout lines of the mainstream supermarket. |
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