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For Vallarta Supermarkets Director of Produce Bob Rapp, the leap into organics produce at the 50-store, Hispanic-focused retailer is customer driven.
“We know there is a demand for it. Everyone is looking at organics,” Rapp said, adding that it can be a very strong point of differentiation for Vallarta and the other supermarkets catering to the Latino community.
Vallarta Supermarkets has 50 stores in the southern half of California. They are as far south as National City near the U.S. border in San Diego County and as far north as Fresno in the San Joaquin Valley and Santa Maria along the Central Coast. The company was founded by Enrique Gonzalez Sr. in 1985 with a single store in Southern California’s San Fernando Valley.
The veteran Rapp joined Vallarta in 2011 with the expressed purpose of building a produce buying department. Previously, the company used broad line distributors. It took three years to develop the in-house buying program and since then efforts have been focused on improving that department within the stores. Rapp said fresh produce is very important to Vallarta shoppers as the core demographic over-indexes on its produce purchases as it still is heavily involved in making home-cooked meals using raw, fresh ingredients.
As such, Vallarta’s average produce departments have grown in size in recent years. And in 2017, the firm greatly increased the amount of real estate devoted to organic produce. “We started in 2016 with about an eight foot display and 25 items,” Rapp said.
Organic sales were brisk and in 2017, the average store more than doubled its space and the number of organic SKUs offered has grown by a factor of three. “We are learning how to manage it and working on our ordering strategy,” he said.
Initially, Rapp said Vallarta used repackers to break down cartons so that smaller quantities of each item could be delivered to the individual stores with less worry about shrink. That is no longer necessary as sales have taken off. “We’ve only been at it (in a big way) for about a year and we still have a lot to learn. It’s going to take time but sales are gaining momentum,” he said.
Hispanic customers, Rapp said, are like everyone else in that quality is still the number one driver of sales. Price is important but it is quality that gets the top nod. And more and more, he said consumers are driven to a specific market because of selection.
That is where the organic option comes in. Again, like everyone else, Hispanic shoppers want the organic option. Vallarta is focused on the Hispanic community but its stores are also trying to attract other ethnicities and are carrying a wider range of fresh produce items.
The company is still family owned with Gonzalez’ son, Enrique Gonzales Jr., now in a leadership position. It has grown at an average pace of two stores per year for the past 25 years, but has grander expansion plans for the future. Its website proclaims that it wants to serve 100 communities by 2030 meaning a growth rate of at least three stores per year in the interim.
