Supermarket Targets Minorities

WAVE OF THE FUTURE?

THE sign out front says ``Welcome'' in seven languages, but that's only the beginning. Step inside and you can find everything from tostadas to T-shirts, lemon grass to lentils, sombreros to scuba gear. Fiesta stores are known for their Mexican-market atmosphere. Vendors in colorful stalls cluster in the parking lots and at the entrance. Inside, women mix, pat, and bake tortillas. Pinatas hang overhead, and Mexican music wafts from speakers.

The largest in Fiesta's 21-store chain covers about five acres. Located near the National Aeronautics and Space Administration's Johnson Space Center, the store is likely the wave of the future: supermarkets tailored to the needs of large ethnic populations.

``By the year 2000, the Hispanic population in the United States is expected to exceed 28 million and the Asian population 12 million,'' says Ana Maria Fernandez Haar, president of IAC Advertising Inc. in Miami. ``With that many Hispanics, and with that many Asians, they become a critical mass,'' she says. ``Supermarkets need to take steps if they want to turn these people into loyal customers.

``The age of mass marketing is clearly over,'' Ms. Haar concludes. ``Today, in all markets, it's either target or perish.'' The Fiesta store chain is a result.

The enormous Fiesta store here combines the atmosphere of an international bazaar with a high-tech supermarket. The high-tech part is more than wide aisles and computer checkouts: It's a shiny glass wall enclosing a 10,000-square-foot room of growing vegetables, rising in tiers high above the store's main floor. Two hundred high-intensity lights add sparkle to this hydroponic operation and also power the photosynthetic process for lettuce, herbs, tomatoes, bok choy, edible flowers, and other vegetables.

Cruising the aisles are sari-clad Indian women, African blacks, Caribbean blacks, Arabs, Asians, and Latinos. They browse among bins overflowing with exotic fruits and vegetables. There are corn husks for tamales, ginger root, and fresh sugar cane, foreign-language newspapers, and Spanish-speaking tax advisers and insurance salesmen, consumer electronics and picture frames.

Began in the barrio

Outside most stores, kiosks sell everything from blankets to audio equipment and inexpensive toys. At this store there are from 400 to 600 varieties of fruits and vegetables. Some stores have Chinese or Italian takeout food and half a dozen have sushi bars.

Fiesta began with a single store in Houston's Mexican barrio, a point of pride with its president, Donald Bonham. ``At that time, in 1972, nobody was catering to the Mexican-American,'' he says. So he and partner O.C. Mendenhall, already in the grocery business, decided to try.

``We went into business to give the customers more than they expected - better value, better service, and more variety. Inner-city customers suffer from not being as mobile as their suburban counterparts,'' Mr. Bonham says. ``Comparison shopping is difficult. They also need more goods to choose from for one-stop family shopping.''

``Each store is different, depending on the neighborhood and on what is pleasing to ourselves,'' Bonham adds. ``A year ago, after we opened a new store, we found 200 English families were located in the area. We weren't aware of this in the planning stages, but we immediately started to stock some basic English foods.''

But Hispanics are still the chain's core customers. This explains the Spanish-language name, the red-and-white-striped Mexican motif, and the trademark parrot symbol.

As the Fiesta chain grew, the focus broadened. No two Texas stores are alike. Each is geared to the tastes of the community in which it is located, a strategy known as ``niche marketing.'' The emphasis may be on African, Italian, Oriental, French, Indian, Arabic, or Cuban products.

The merchandise seems comprehensive: from standard, mainstream products in regular-size portions to large containers for bulk buying, packaged foods from dozens of countries, fresh baked goods from a range of cultures and traditions, and fresh seafood.

``We have food products from 32 or 33 different countries,'' Bonham says. ``About 22 countries are represented heavily; others have fewer items.... We try to offer [customers] something new each time they come into a store. We also try to bring in a sense of community to meet the need for social contact. We want shopping to be fun, an adventure.''

From melting pot to mosaic

By the late '70s Vietnamese, Koreans, Thais, Africans, and Central Americans had arrived in Houston. Southeast Asians came in busloads to Fiesta because it had the hottest peppers and the freshest tropical fruits, as well as low-priced clothing and household goods.

But not all of the Fiesta stores are international. Older stores in the chain tend to be more Mexican, newer stores more international, and the suburban stores reflect their neighborhoods.

``America is not a melting pot in the sense we once were,'' says Tim Hammonds, senior vice president for education and research at the Food Marketing Institute in Chicago. ``Today we are a mosaic of ethnic neighborhoods and ethnic styles. Today's ethnic groups are aggressively keeping two elements of their culture - food and language. Successful marketers are must speak to those groups.''

Before founding Fiesta, Donald Bonham spent several years developing food delivery systems for the Inter-American Development Bank in Chile and other Latin American nations. He also worked in a United States program to help minorities enter the grocery business. The son of a grocer, Bonham grew up in Corpus Christi, Texas, learning the grocery business first-hand.

Fiesta stores have a personality of their own that goes past the merchandise on the shelves. ``Our employees are about 95 percent ethnic, minority, non-anglos. We want a mixed group.'' Mr. Bonham says. `` Many are not achievers prior to working for Fiesta, but we have a good training program and about 80 percent of our employees are full time, not part time workers. That's a high percentage for the grocery business,'' he said.

``Our employees have a lot of freedom to make decisions. They take pride in ownership and it shows in their friendliness to the shoppers. ''

An entrepreneur himself, Bonham encourages employee initiatives. For example, a worker in a Fiesta florist department wanted to redecorate her area in purple, explaining that the store's Mexican-American customers respond to this color. While the idea didn't sound particularly reasonable to Bonham, he gave his permission. Florist department sales doubled.

In the '80s Fiesta followed its clientele to the Houston suburbs as the region's oil-related economic ``bust'' made housing outside the inner city less expensive, and as Hispanics became successful and upwardly mobile, says Bonham. The chain is still reaching out for new customers. Although most Fiesta stores cater almost exclusively to non-whites, stores in some areas have 50 percent white shoppers. Many sophisticated Anglos are cooking Chinese, Mexican, and Thai and go to Fiesta to find the necessary ethnic and unusual ingredients.

But perhaps the attraction is more than the food: The stores do seem to have an atmosphere of festivity and fun.