Food Lion Says ¡Olé!

While many firms talk about catering more to the Hispanic shopper, Food Lion is walking the walk.

Two more markets in North Carolina focusing on Hispanics will be expanded from the current five, with 10 old Triangle stores being converted to serve this new customer base. Estimates put the Hispanic grocery market currently at $30bn. Besides the usual offerings of dry goods like beans, tortillas and spices, the stores carry meat cuts and produce Hispanic shoppers normally search for at specialty markets. Employees receive Spanish language instruction and training in Hispanic culture so as to avoid gaffes and alienating the new clientele.

Signs announcing “Sabor Latino” (“Latin Flavor”) adorn the stores, and even Food Lion’s other stores are offering more products aimed at Latins. Marketing has relied on word-of-mouth, and the news has traveled quickly with sales up according to the company. When finished, 59 stores (roughly 10% of Food Lion’s 503 North Carolina locations) will have an Hispanic focus. FMI (the Food Marketing Institute, a grocery industry trade association) reports 61.8% of food retailers report increasing their ethnic products as a competitive strategy. While Hispanic products are attracting Hispanics, the foods are also luring in non-Hispanic customers looking for new options.

Food Lion isn’t the only one seeing dollar signs in the growing Hispanic market: homeopathic remedy marketer Hyland’s has launched a social networking site for Latina mothers. ComienzosSaludables.com (“healthy beginnings”) offers fully-bilingual culturally-relevant health information to the 25% of U.S. moms of Hispanic origin. The information includes pregnancy, infant care, raising a family, healthy lifestyle and, of course, treating a family’s health issues with natural medicines. The new venture follows Hyland’s other efforts to reach the growing Hispanic market, first with bilingual packaging, a baby development calendar in Spanish, and sponsorship of a community health worker program called Salud con Hyland’s.

According to eMarketer, 23MM U.S. Hispanics went online last year, with the total expected to reach 29MM by 2012 (though only 32% of Spanish-dominant Hispanic adults go online). Statistics show 70% of Latina mothers are under the age of 30, and the social networking component of Comienzos Saludables will include community forums, photo galleries, blogs, personal profile pages, and monthly newsletters.

According to Information Resources, Inc. Hispanic spending topped $34bn in 2008 and will grow to $52bn by 2015. Spending per household among Hispanic consumers significantly outpaces the national spending averages across nearly every channel. Johnson & Johnson launched a Spanish-language version of its parenting web site BabyCenter (Baby Center en Español), and Procter & Gamble (already one of the largest advertisers in Spanish magazines) directed $1MM of its ad-spend on Pampers Swaddlers against Spanish mothers in 2007. Besides baby care, other strong market opportunities among Hispanics include beauty care, laundry care and food and beverages that are either youth-oriented, offer specific health benefits (e.g., low sugar, high fiber) or are an ingredient or component of ethnic meals.

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