Abogados de Inmigracion

Carlita represents the sum of two dominating trends in food retailing today: private label and ethnic foods. Sales of private label or store brands totaled $13.1 billion in 2004, up 23 percent from 1999, according to a report by Mintel International Group in Chicago. The market research firm estimates store-brand sales will increase at an annual rate of 25 percent through 2009.

With store-branded cookies and cereals already stealing market share from the likes of General Mills Inc. and Kraft Inc., supermarkets are pushing into higher priced growth categories like organic, natural and ethnic foods. Unlike consumer staples, retailers will charge prices that match or even exceed those of national brands in these fast-growing categories.

The ethnic foods category is especially attractive to food retailers. The U.S. Census Bureau estimates that the number of Hispanics and Asians in this country will triple by 2050. While some retailers have developed Hispanic-themed stores with mixed results, other chains, like Whole Foods Markets and Publix Supermarkets, are selling Hispanic foods under their store names.

But Supervalu is taking it a step further. With Carlita, the company hopes to create an authentic brand from scratch that will be more legitimate in the eyes of Hispanic shoppers than, say, Publix taco shells. East Coast retailer Stop & Shop is doing the same thing, having launched its Mi Casa line in 2003.

"There is a lot of buzz in the industry," said John Hauptman, vice president of Willard Bishop Consulting in Barrington, Ill. "Retailers are embracing the concept of ethnic private label."

Supervalu already carries a number of Hispanic foods. Since Cub Foods debuted its "Global Aisle" in 2003, the concept has spread to more than 20 stores. But the company wanted to develop a brand that would be unique to its stores, said Craig Espelien, director of store brands and strategic services.

"It's ours," Espelien said. "We establish our own brand image with the consumer. We put a stake in the ground and we can be a great brand merchant in this category."

Supervalu spent over a year conducting market research. The company hired brand consultants -- and top executives, including Espelien, even took Spanish lessons twice a week.

Supervalu first came up with "Carlota," a name meant to reflect the matriarchal structure of Hispanic families. But Carlota was scrapped because it "sounded too Italian," Espelien said.

The company ultimately chose Carlita, believing it might play better to younger women in the United States who play an increasingly "vibrant role in the family," he said.

Supervalu is selling Carlita products at all 262 corporate stores, including Cub Foods, Shop 'N Save, and Biggs. By the end of the year, the company hopes Carlita will be in at least 2,500 of Supervalu's wholesale customers.

But analysts warn that a Minnesota-made gringo brand might not pass muster with Hispanic consumers. Nash Finch Co. of Edina pulled the plug on its Avanza stores in Chicago because of poor sales. Even though Chicago had a strong Hispanic community, Avanza could not compete with the immigrant-run bodegas.

"Private label might [pose] at least a challenge for retailers to sell ethnic foods to consumers in those communities," Hauptman said. "It's a little tricky."

Espelien admits marketing private label tortillas to Hispanic consumers is more difficult than selling store-brand cereal to Caucasian shoppers. So the company is initially targeting second- and third-generation "acculturated" Hispanics who either were born in the United States or have lived here for many years and are willing to shop at mainstream supermarkets for processed Tex-Mex foods such as refried beans, canned tomatoes and taco kits.

If successful, Supervalu eventually will try to sell Carlita-branded ingredients like spices and corn oil to immigrants who want to cook from scratch.

"We want to give them a reasonable alternative to the bodega," Espelien said. "We want them to be comfortable with a brand that caters to their needs."

Marcia Mogelonsky, a research analyst with Mintel, said Supervalu's graduated strategy is the right one. Ultimately, Hispanic consumers will appreciate the brand's nuances, she said.

"It's great that they realize there are three different groups," Mogelonsky said. "Consumers will like that they put some thought into the products and go to the trouble of putting authentic ingredients into the food."

Analysts said more supermarkets will develop private label ethnic foods, which would put them on a direct collision with established brands like Goya. Just as General Mills and Sara Lee lose market share to private labels, ethnic brands, which have long enjoyed a special niche with mainstream supermarkets, will feel the pinch too.

Espelien said Carlita is too small to threaten a big manufacturer like Goya -- at least for now.

"We are not as broad-based as Goya," he said. "But at some point in the future, they will have to worry."