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Ignore the ethnic market at your own peril

Though it’s not a scientific poll, this year’s presidential candidates have spent millions upon millions of dollars on U.S.-based Spanish language media, courting votes. This is a growing population, and politicians have discovered they can’t ignore it. In fact, many are saying that any political party that ignores this group is doomed to long-term failure.

The same might be said for marketers of products such as fresh produce. And the great news for fresh produce is that the Hispanic community tends to consume it at a much faster rate than their Anglo counterparts.

Longtime retailer Dick Spezzano, Hispanic-Porduce-Displayfro Progressive Produce launched its successful Hispanic line about 10 years ago. (Photo courtesy of Progressive Produce)who for many years wore the title of vice president of produce for the Southern California-based Vons Grocery Co., said, “You have to remember that a 30-store Hispanic chain does the dollar sales of 60 or 70 Vons and the volume of 100 Vons (in the produce department).”

It is no secret that Hispanics buy a lot of fresh produce and Hispanic retailers tend to have very attractive price points. However, Mr. Spezzano, who now offers his insights via Spezzano Consulting, said one has to remember that as Hispanics assimilate into American society, “they do adopt our eating habits. By the second generation, they still eat a lot of produce, but they like their hamburgers as well.”

Nonetheless, he said, major U.S. retailers would be well served to adopt a Hispanic program, almost regardless of where they are located. Hispanics are a rising population in virtually any big city and many not-so-big cities. He said pretty much any national retailer has stores that are serving Hispanic communities and they should be addressing that constituency.

Los Angeles, with its close proximity to Mexico, seemingly has led the way as a destination for Hispanic immigrants. Consequently marketers in this city might be a bit ahead of the curve. Jack Gyben, vice president of marketing and a partner in Progressive Produce Corp. in Los Angeles, details elsewhere in this section how his firm launched a Hispanic line about a decade ago. With its packaging and labels, the company targeted mainline retailers and has been very successful. “It has been a steep learning curve for us and retailers, even in Southern California,” he said. “The difference between now and 10 years ago is now retailers have an objective to serve this demographic.”

It is part of their game plan. He said that 10 years ago, the majority of retailers carried some Hispanic items but didn’t have a clear understanding of the needs of that constituency. Now they do or at least they try to. Sometimes it is an elusive target as the makeup of a community can be very diverse with many sub-cultures, even under the Hispanic umbrella. He added that many retailers have also taken the next step and drill down so they can serve Guatemalan customers differently than Puerto Rican or Costa Rican customers.

Bryan Silbermann, president of the Produce Marketing Association, has watched the industry evolve over the past couple of decades with regard to ethnic marketing, and he likes what he sees. Of course, he said, there is more work to be done, but “from the supply side, we’ve gotten a whole lot better at identifying the needs of different communities” as well as targeting them and segmenting them. He said distributors have come up with many different niche items for very specific segments of the population. Helping this growth, he said has been the globalization of the industry. In fact, speaking to The Produce News weeks before the opening of the PMA convention, Mr. Silbermann said international attendees will be at an all-time high this year. This interaction among different nationalities at the show can only help increase the knowledge of different cultures. And of course, these international produce people are typically representing crops and products grown in their homelands that appeal to segments of the very diverse U.S. population.

The PMA executive, however, also noted how difficult it is for the national retail and foodservice operators to serve niche populations. Consequently he said the rise of the independent ethnic retailer has given these specific demographics their own shopping venues and access to a wide range of products. On the foodservice side, the rise of food trucks has done the same thing. These food trucks, often gourmet but always with a unique blend of items, are one of the fastest-growing foodservice trends in the country.

While Mr. Spezzano advocates that mainline retailers do enter into the ethnic marketing arena by targeting the demographics of their stores, he said they need to do their research and have realistic expectations. He said some retailers have launched Hispanic programs, and while they have enjoyed better-than-average sales, they have not been quite as large as expected. “You have to remember these consumers also work two jobs and are looking for convenience just like everyone else,” he said.

But while they might shop and eat like Anglos during the week, Mr. Spezzano said they return to their Hispanic roots on weekends and especially on holidays when it comes to preparing meals. That would suggest that ethnic promotions geared around holidays might be particularly successful. “On weekends, they are Hispanic and on holidays they are totally Hispanic, making homemade tamales and other dishes they grew up on.”

He also offered some successful merchandising techniques and said the experience with organic in-store schematics have some utility when building your Hispanic displays. Mr. Spezzano said supermarkets have found success marketing organics when they have both organic sections and merchandise organic products next to their conventional counterpart. He said the same concept might work with Hispanic items: merchandise them in their own section as well as with other like items.

Finally, the longtime produce man said retailers should not fool themselves by thinking they have a Hispanic program if they are only selling cilantro, limes, avocados and jalapenos. “If that’s your Hispanic program, you’ve missed the boat.”