While some firms may be experiencing mixed results with their Latino advertising or promotional campaigns, representatives of Vons Grocery Co. recently announced several sweeping measures intended to make the company a force in this specialized area.
Vons' President Bill Davila told the Mexican-American Grocers Assn. convention here that the supermarket's parent company, Household Merchandise Holdings Inc., was forming a distribution arm that would import about 400 Mexican food products. The move breaks new ground because the retail firm will bypass traditional wholesale channels.
Household Merchandise's entry into the import business complements an earlier announcement, which outlined plans to open four specially designed supermarkets in primarily Latino areas of Southern California.
The as-yet-unnamed markets, which are to be located in Montebello, Cudahy and El Monte, would serve dual purposes. The first would be to have a chain of food stores tailored specifically to the Latino community. This venture was prompted by research which found that in these areas as much as 75% of the population avoids shopping in the big-name markets because of a lack of services or products.
Secondarily, the outlets would act as a testing ground for formats and products that might later be incorporated throughout the overall Vons chain. An example of typically Latino foods which have become extremely popular with the general population is tortillerias , or in-store bakeries for tortillas.
"We're now operating tortillerias in three of our stores in areas with relatively low Hispanic populations that are very successful," Davila said. "The operation in Garden Grove can barely keep up with demand and they're producing 350 dozen corn tortillas an hour."
In the last few decades, Mexican foods and products have become familiar to all Californians, he said, noting that Mexican cuisine is one of the most popular in the state.
Davila, who appears in a television commercial for Vons speaking fluent Spanish, chided his competitors by stating that some companies are uncertain how to operate in Latino areas.
"There's a great concern on the part of some retailers and some food companies (about whether to enter these communities)," he said. "Others are even accused of running away from them. Well, we've always had stores in Hispanic areas and black areas. So, this is not new."
Davila also said some food companies and supermarket chains fail to realize that certain items do not sell in Latino communities.
"If the normal criteria of the average supermarket were applied to the stores we're opening in Hispanic areas, then 40% of the items (traditionally) sold wouldn't make it. (Their) sales wouldn't warrant keeping the products on the shelves," he said. Consequently, the format of new supermarkets will be substantially different from what might be found in Vons stores in, say, Pasadena or Torrance.
"I've been listening to all the (convention's) discussions about a new-found (Latino) market, but it's been here a long time," Davila said. "It becomes clear that these folks are not visiting, they're here to stay. So, we have got to get them to use the products Vons sells."