According to Nielsen, Hispanic power and influence is surging. Half of all United States population growth from 2012 to 2015 came from Hispanics and the U.S. Census expects the U.S. Latino population to more than double within the next two generations.
Hispanics already represent nearly 18 percent of the U.S. population and will likely account for 24 percent by 2040 and 29 percent by 2060.What does this mean for retail foodservice? Everything, when it comes to opportunity. Southeastern Grocers debuted its Fresco Y Mas banner in 2016 and now operates 18 of the Hispanic concept stores throughout Florida, including the conversion of several Winn-Dixie locations.
“Fresco Y Mas was created because there is a tremendous Hispanic population throughout the Southeast,” says Bill Nasshan, Southeastern’s managing director for South Florida. “It’s an ethnic group that continues to grow and in the Southeast we continue to get more Hispanics moving to this part of the country.
“We looked at that and determined there was an opportunity for an authentic Hispanic shopping experience that offered the broadest range of products and services that truly reflect the desires and needs of the Hispanic customers.”
A Fresco Y Mas store is filled with bilingual signage and Hispanic products, but the real differentiator, Nasshan says, sits elsewhere. In fact, it takes much more to even call yourself a Hispanic grocer.
|||Read more: All about the perimeter|||
“I would suggest just having a broad variety of Hispanic foods in center-store doesn’t put you in any position at all to attract the Hispanic or the Hispanic-influenced customer,” Nasshan says. “The real attraction is in the fresh foods area, particularly in produce and the Cocina and for sure in the meat department.”
On the other side of the country, John Gomez, CEO of Cardenas Markets LLC, wholeheartedly agrees.
“Our big focus is improving our quality and innovating in the perimeter,” he says. “We view that area as one where we can really get creative and not only have the staples that every Hispanic wants to see, but also the more creative adventure that maybe our customers weren’t expecting.”
Gomez says more than 65 percent of Cardenas Markets’ sales come from the perimeter. It’s no surprise that it remains a focal point after Cardenas acquired fellow Hispanic retailer Mi Pueblo in July. That merger, along with a new store opening in Calexico, California, just days later pushed Cardenas’ store total to 46 — a 50-percent growth in this calendar year.
Gomez says the company would like to average about seven new stores per year. “And also, we’re certainly open to, and interested in, acquiring other business in the areas that serve our customer, the Hispanic customer,” he says. “That volume gives us the buying power to buy at a better cost and pass that on to our customer. In our view, we’re creating a lot of value for the customer and for the communities that we serve. We’ve had several issues in place to improve our quality, especially in the perimeter.”
|||Read more: The importance of authenticity|||
“With the hot foods, it has to be authentic,” Nasshan says. “You need to cook from scratch. You need to have chicharrones. You have to have arroz con pollo, which is one of our signature dishes. Picadillo is very important and is part of the everyday life eating experiences.”
Fresco Y Mas looked to suppliers that work with well-known Hispanic restaurants throughout Florida and the Southeast to guide the company through the development of its fresh food offerings. “We took great pains to make sure that we had the assortment that everybody was looking for and then we found the right supplier,” Nasshan says.
For Gomez and Cardenas Markets, true authenticity starts with tortillas. “I don’t think you can be a truly authentic Hispanic grocery store without warm, fresh tortillas made from scratch,” Gomez says. “That’s a big part of what we do and I think our customers give us a lot of credit for that. The quality of a warm tortilla made from scratch with corn … that is everything to our customer.”
Nasshan says Fresco Y Mas feels the same way about the influence of coffee on the store’s cafes and panaderias.
“It all starts with having very authentic coffee offerings,” he says. “Coffee is a very important part of life for our Hispanic customer, whether it’s Cuban-style coffee or café con leche. It’s something you give to guests, have at every meal, and use to celebrate.”
Fresco Y Mas offers a number of in-store bakery items — pastelitos — to pair with its coffee, including croquetas, guava pastries and empanadas. The Spanish tortillas — more of an omelette that contains potatoes, cheese and more and is served like a slice of pizza — is perhaps the most popular.
“To be a real, authentic Hispanic café, you need to make sure you offer that,” Nasshan says. “It might be the number one Hispanic food in the world.”
Gomez says Hispanic customers place a high value on fresh bread. Fresh bolillos — a savory bread similar to a baguette traditionally made in Mexico — are increasingly popular. Austin, Texas-based retailer Supermercado Poco Loco says it has continued success with bolillos and conchas, a Mexican sweet bread.
“Our customers come from a wide mix of cultures, so we always want to offer a wide variety of new and traditional items to keep the cases fresh and exciting,” says Israel Guevara, Supermercado Poco Loco’s bakery manager. “Our top sellers continue to be bolillos and conchas, but we also sell a lot of cookies and cakes.”
Traditional Hispanic cakes like tres leches cakes, flan, chocoflan and more are vital to any panaderia.
Part of the reason Hispanic customers are relying so heavily on authentic store-prepared foods, Gomez says, is the simple fact that many of those foods are not exactly easy to make.
“I think convenience is a huge part of it. When we get home, we want to prepare a home-cooked meal, but at the same time you don’t want to go through the whole process,” he says. “I was talking to one of our customers the other day. She’s Mexican-American and told me ‘We love Mexican food, but it’s so hard to cook sometimes.’ She said they come to us for the convenience of being able to buy carnitas or tres leches cake or flan.”
Just as important as authenticity and convenience, though, is freshness. Gomez says Cardenas Markets is in the process of trying to scale some of its production to make things easier on its team members, but it won’t do so at the cost of freshness.
“It’s all about trying to prepare all of these things as close to the point of consumption as possible,” he says. “We want to try to scale and make things simple for our operations team, but at the same time we know our customer doesn’t want to buy something that was made three days ago, or in some cases even yesterday.”
To accomplish that, Cardenas approaches production as a restaurant would, preparing small batches of food as closely as possible to when they think the customer will need it. “I think that really resonates with our customers,” Gomez says.
|||Read more: Keying on culture|||
“In this part of our footprint, if you’re really listening and paying attention and focusing on your customers, you’ll realize that catering to the Hispanic or Hispanic-influenced customer in an authentic and original way will get that customer’s loyalty and will get trips from that customer,” Nasshan says. “I’ll go broader and say that what we’re doing with Fresco Y Mas is a microcosm of what I believe most retailers are looking to do, which is to understand who their customer is in each local market and how to market best for that customer. I think when you look at the success people are having around the country with focusing on how to serve the Hispanic customer the best, it proves that being truly local, no matter what local means, is the way a brick-and-mortar retailer has to operate today.”
And when serving the Hispanic customer, a vital ingredient is the warmth and familial atmosphere of the everyday shopping experience. Gomez recalled meeting a customer outside of the store who told him her non-Hispanic husband insists on doing the grocery shopping because he loved the “warm feeling” he got at Cardenas Markets.
“First, there’s a natural warmth that Hispanics tend to have and like to share,” Gomez says. “Even strangers like to talk about the boxing match or the soccer match. There’s a natural chit-chat that goes on in our culture. And the Hispanic customer is one of the last customers that absolutely finds value in eating most meals at home with family.”
Gomez says the second aspect is the training and care Cardenas team members get from the company. “I have to give a lot of credit to the Cardenas family,” he says. “The founders of this business really created a culture within the company and within the stores that is very familial. Our team members, I think, feel like they have a home and that comes from workplace culture.”
Part of that environment, Nasshan says, comes from the way the Hispanic culture views food and shopping for it.
“There is a high value placed on fresh foods and fresh breads,” he says. “They want to pick out fresh bolillos that are made every day and fresh tortillas made from scratch and really high-quality produce and meats. And they view shopping for these foods as a family tradition.”
But one thing to consider, Nasshan also says, is that Hispanic customers also want some options outside of their culture.
“I think an important thing to remember, especially with meat, is that, yes, you have to have the specific cut of meat that matches the desire for authenticity,” he says. “But you’ve got to be careful not to pigeonhole that customer. They’ll also buy across general market fresh meat and prepared foods as well.”
Room for growth
The exciting part of serving the Hispanic market is its anticipated growth. As mentioned above, Hispanics are expected to account for nearly 30 percent of the United States’ population in 30 years.
That puts Hispanic retailers like Fresco Y Mas and Cardenas Markets in a position to prepare now. But Gomez says that must be done carefully and purposefully, with that warmth of the culture in mind.
“That will be the key to our success. We don’t want to just grow and become this big store that feels like a cold representation of a regular grocery store,” he says. “For us, it has to start from the inside and work its way out. Every team member has to feel good about where they work, they have to be competent because they’ve been trained on how to do their job, and every team member feeling like they have opportunity because of all the growth we have planned. And that will make its way from our team members to our customers.”