Tuesday, July 14, 2009

UNO designs AVANZA Supermarket


Nash Finch immerses customers in culture

Avanza. From the Spanish avanzar, which means "advance." Nash Finch Co. is doing just that in the Rocky Mountain states with its year-old Hispanic-oriented Avanza supermarket concept.

The Minneapolis-based retail and distribution company has debuted three Avanza stores in Denver and one in Pueblo, Colo. Two Chicago stores are under construction to serve a growing and, to date, wildly underserved market.

Avanza's entrance is no surprise to those who have studied the market. Demographers believe Hispanics will make up 55.1 million of the nearly 332 million U.S. population by 2020. They spend tens of billions of dollars on food every year, and, demographically speaking, they eat at home more often than they eat out.

But it's how Nash Finch has created Avanza that makes the concept stand apart.

First, it decided not to go after the entire Hispanic population in the areas it serves. Instead, Nash Finch specifically focused on creating stores for first-generation Mexican immigrants.

"Sixty-eight percent of all Hispanics in the United States are Mexicans," says Luis Fitch, principal and creative director of Uno Marketing and Advertising, the Minneapolis firm that helped Nash Finch with its Avanza concept. "We're targeting Mexicans, period."

In the Midwest and Southwest, the Hispanic population is growing between 100 percent and 300 percent annually, depending on the area in question, Fitch says. In those areas, he says, Nash Finch has "zero competition" for its Avanza concept from other conventional food retailers.

"When you look at Colorado, you have a Hispanic population of 700,000," says Brian Numainville, director of research at Nash Finch. "That's 17.1 percent of the state's population. In Denver proper, that goes up to 32 percent."

To capture the Mexican market, Numainville says Nash Finch had to focus on two broad areas in its Avanza store presentation: products and community. The focus begins in stores with bilingual signage and advertising, a bilingual staff and what Numainville calls culturally appropriate design.

Store design is inspired by the work of the late Pritzker Architecture Prize-winning Mexican architect Luis Barragán and Mexican artist Chucho Reyes.

"Barragán came up with a palette of colors—pinks and blues and yellows—that has become [emblematic] of Mexico," says Fitch, a native of Tijuana. "We recommended that Nash Finch make something original but also something that had its roots in Mexico—bringing in the old and interpreting it in a new way, so to speak.Toward that end, Fitch and his design team incorporated Barragán's vibrant color palette into the stores' interior and exterior design. The entrance sports a huge swath of pink, with the red and yellow Avanza sign above. Barragánesque colors continue throughout the store's interior. In addition, the stores' signage is designed to be reminiscent of the handwritten signs and lacy papel picado (perforated paper) recent immigrants are used to seeing on Mexican streets.

In the center store, Nash Finch offers between 600 and 750 SKUs of Mexican foods, intermingled with 3,000 total SKUs. "We integrate everything within the center store," says Scott Hillioss, ethnic merchandise manager. "We'll take the Hispanic cookies and put them right next to Nabisco. Peppers are merchandised in with the canned vegetables."

Avanza stores carry brands such as La Costeña, considered the Del Monte of Mexico; Jumex, a Mexican brand of canned fruit juice and nectar; Bimbo, the largest bakery company in Mexico; and Maseca, a specialty tortilla flour. The in-store bakery offers goods such as chirros (popular large cinnamon sticks) and bolillos(torpedo-shaped sandwich rolls that are a staple in Mexico).

The expansive produce department carries fresh fruits and vegetables, like green tomatillos, that Mexican immigrant consumers often can't find in conventional food stores. The meat department carries specialty cuts and the deli specializes in Mexican cheeses.

"The cuts of beef are very thin," Hillioss says. "You won't be able to go into an Avanza store and find a one-and-a-quarter-inch steak."

Avanza also offers several hundred SKUs of its value-priced private-label brand, intermingled with authentic Mexican and conventional offerings.

Avanza stores do not, however, carry natural and organic foods. "That kind of food tends to cost more, and therefore it just doesn't exist in this market," says Linda Gonzalez, president of Viva Partnership, a Miami-based Hispanic marketing firm. "[Our consumers] are not prepared academically or economically for these products. They are not even aware of them. The first-generation Mexican consumer finds out what to buy from friends and family. Those around him aren't familiar with natural products."

Hillioss says he thinks that reality will change over time, and as consumer demand shifts, Avanza's product mix also will shift. "Once this consumer becomes second- and third-generation, they'll get into a more health-conscious mode," he says.

Avanza's community connection is manifested through events, soccer team sponsorships and the active participation of community leaders.

According to Numainville, "We've had each store and all our associates blessed by the local Catholic priest, and Leticia Calzada, the consul general of Mexico in Colorado, has been at every grand opening we've had."

Book drives at the Colorado grand openings brought in hundreds of books in Spanish and English that were donated to two Denver-area elementary schools under the auspices of the "Reading is Fundamental" program.

Avanza also has a mascot. Paco, a large, red, guitar-playing rooster, comes with a legend that recounts his birth in Mexico, his travels, and his eventual settlement in the United States. Cutouts of Paco welcome customers into the market and direct them to specials sprinkled throughout the store.

Viva Partnership's Gonzalez says mascots tend to sit well with Hispanics. "Nash Finch has done its homework," she says. "The rooster is an important part of the Mexican culture. It represents strength and independence."

Even the name of the store works for Gonzalez. "It says, 'Hey, people speak Spanish here.'"Of perhaps most importance to the company's Hispanic community outreach effort, according to Gonzalez, is Avanza's health fair. "Among Mexican-Americans, 39 percent of the women and 30 percent of the men are obese," she says.

The obesity stems from the drastic lifestyle change, including the American fast-food diet, that many Mexicans experience when they come north. "In Mexico, many people don't have cars. They walk and use public transportation. They lead very active lives. Here, everyone has a car," Gonzalez explains.

To help counter the trend, Avanza might consider offering healthy-cooking classes, she says. "Northern Mexicans tend to fry their food. If Avanza can teach them to eat their food in a more healthy way, that would provide a great service."

Uno's Fitch says the Avanza concept has taken root because the initiative came from the top. Nash Finch Chief Executive Ron Marshall told stockholders in advance that the new concept was forthcoming, Fitch says, and that the company would back it wholeheartedly. "Internally, Nash Finch has a clear understanding of what retail and distribution and merchandising should be," Fitch says. "And if you don't have the right mix of merchandise and brands specific to the Hispanic market, you're not going to be successful."

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