Stripes is among the growing number of convenience store chains providing an authentic Hispanic cuisine to attract this growing demographic.
By Pat Pape, Contributing Editor.
Early each morning the parking lots of Stripes Convenience Stores fill up with the trucks and cars of customers wanting to purchase a hearty meal of breakfast tacos, carne guisada or barbacoa before beginning a busy day.
With 528 store locations in Texas and New Mexico, Stripes serves many Hispanic consumers, and to keep those customers coming back the Corpus Christi, Texas chain has perfected its traditional Hispanic food offerings, focusing on fresh ingredients and authentic flavors.
“Everything is prepared in the store, including chopping the vegetables,” said Ben Hoffmeyer, category manager for foodservice at Stripes. “We once tried using a commissary, but tortillas don’t wrap and transport well.”
Growing Consumer Base
In 2010, the U.S. census counted more than 50 million Americans of Hispanic origin. At 16% of the current U.S. population, Hispanics are the nation’s largest minority group, one that is growing at three times the rate of the general population.
California leads all states with the most Hispanic residents—more than 13 million—while Texas and Florida have roughly 9.2 and four million Hispanic residents, respectively. However, during the past decade, population growth has been greatest in states that have not been major Hispanic centers, such as Alabama, Georgia, Kentucky, North Carolina and Tennessee.
According to a recent report from Technomic, the food industry consulting organization, the total U.S. spending power exceeded $10 trillion in 2009, with Hispanic consumers accounting for almost $1 trillion or 10% of that amount.
Because that figure is projected to reach $1.3 trillion by 2013, “A lot of retailers are putting specific marketing initiatives in place to serve Hispanic consumers,” said Sara Monnette, director of consumer research for Technomic.
Last year, BP’s ampm stores rolled out a new line of proprietary Hispanic snacks in several markets under the brand name El Mero, a term that loosely translates to ‘the boss,’ while 7-Eleven stores announced plans to work with its retailing counterpart in Mexico to create lower-priced private label foods aimed at the Hispanic market.
Retailers across all channels are trying to tap the buying power of Hispanic consumers. In 2009, Walmart opened the first Supermercado de Walmart in Houston. According to Jose Antonio Fernandez, vice president of business development for Walmart, the 39,000-square-foot venue offers a wide selection of fresh and authentic foods, including popular national brands from Mexico and the U.S. It also sells traditional tacos, tortas, aguas frescas, sopes, carnitas and barbacoa at low prices.
In Florida, Publix grocery chain has launched Publix Sabor, a supermarket chain designed to attract Hispanic shoppers.
The store mix focuses on products from the Caribbean and Central and South America, with ads and product information communicated in both English and Spanish. In-store services range from money transfers and money orders to bill payment and fax services.
“McDonald’s, the biggest restaurant chain in the world, is focused on this consumer group,” said Monnette, noting that the company is heavily promoting its new mango-pineapple smoothie. “Mango is a fruit that is really appealing to this and the mainstream consumer.”
Home and Heritage
According to a Technomic survey of Hispanic consumers, most place high importance on maintaining the values of their culture. Growing up, most Hispanics ate home-cooked, traditional meals, with nine out of 10 reporting that a parent prepared the food. When buying meals outside their homes, survey respondents indicated that healthy, high-quality ingredients are important in making their selections.
That is why Stripes has devoted a decade to creating authentic, tasty Hispanic food offerings, a plan that includes hiring Hispanic foodservice personnel who understand exactly what customers want. “Our cooks know what is truly authentic and delicious,” said Hoffmeyer. “My job is to get them the best cost on those ingredients.”
Soups are among the most popular dishes Stripes offers, including menudo, which is made of tripe, hominy, spices and a proprietary menudo mix. A second dish, caldo, is similar to chicken noodle soup, but includes vegetables, and Stripes also sells a beef version. Despite hot summers in south- and west-Texas, “Our soups are sold year round,” said Hoffmeyer. “And sales spike during the holidays.”
For both breakfast and lunch, customers order barbacoa, a dish made from the cheek of a young steer. “It looks like roast beef, and we sell it in tacos and by the pound,” Hoffmeyer said. “When served in corn tortillas, it is a popular breakfast food. In fact, 80% is sold before 11 a.m.”
Another traditional morning/mid-day meal is carne guisada, a thick beef-plus-gravy dish. “It’s almost a stew-type product,” Hoffmeyer said. “We sell it in a taco, on a plate or by the pound. It makes a very popular taco.”
Keep It Fresh
To avoid menu fatigue, Stripes recently introduced several new items, including pork carnitas, small cubes of deep fried pork wrapped in tacos or sold by the pound, and a pork mini-taco. “A lot of customers don’t want a whole meal, just something to snack on,” Hoffmeyer said.
The stores also enhanced the menu with churros, a fried pastry dipped in cinnamon sugar similar to a southern funnel cake. “It has done very well and helped our dessert segment,” he said.
Most ideas for new food offerings come from the operations team and the company’s partners across the border. Once a product is developed, it is thoroughly tested before being rolled out, and regional taste preferences are carefully considered. “The core recipe is always the same, but we allow some flexibility depending on where the market is located,” Hoffmeyer said. “For example, salsa gets spicier the farther south you go.”
As an added bonus, many Stripes locations have a fruit-and-salsa bar, a six-foot-long counter featuring red and green salsas, pico de gallo, jalapeños, onions, cilantro and other toppings. This allows shoppers to customize their meals at no extra charge. The bar also offers seasonal fruit for an additional cost. Having freshly cut fruit on hand “enhances the fresh store image,” Hoffmeyer added.
In more than 340 Stripes stores, the Hispanic food program has been branded Laredo Taco, a proprietary name well known where the chain operates. But not all locations are suitable for this popular concept, Hoffmeyer said. Stores need plenty of parking spaces to serve customers, and locations with a small footprint can’t handle the traffic. It’s a good problem to have, he admits, adding, “Every new store we open will have Laredo Taco.”
Small store operators don’t need 500-plus outlets to introduce products that will appeal to Hispanic customers. Even two-store operators can enhance their foodservice programs to attract more Hispanic shoppers.
“For those smaller operators, it’s important to understand who your customer is,” said Monnette. “The Hispanic population and spending power is growing faster than the rest of the population. You should be thinking about how to appeal to them.’’
Hoffmeyer suggests checking out your neighborhood taqueria to see what Hispanic shoppers are purchasing.