Economic Development and Transportation, Distribution & Logistics

Groceries go global: Ethnic food stores surge in popularity, number

November 7, 2005

Salsa outsells ketchup. Tortillas fly off the shelves almost as fast as white bread. And if you're looking for these new staples of the American diet, Indianapolis is increasingly a good place to find them.

Sixteen years ago, there were three Latino grocery stores in Indianapolis, according to Manuel Gonzalez, president of the Indiana State Hispanic Chamber of Commerce. Today, there are more than 40.

And that's just the places that specialize in products like milpero tomatoes and serrano chilies. Add in the grocers catering to Asian, Indian, German and Russian diners and Indianapolis is witnessing a surge in local ethnic groceries at a time when some larger conventional groceries are struggling.

Tienda Morelos just opened its seventh Indianapolis location, mak- ing it the largest Mexican grocer in the state. Other local companies include the Slaviansky Bazaar International Food Market at 12540 N. Meridian St. in Carmel. The store, which caters to the city's Russian, Ukrainian, Polish, Bulgarian and German populations, is exceeding expectations after opening in May.

Lee Orient Foods opened in 1976 and will soon celebrate its fifth anniversary in its lone store: a sparkling 10,000-squarefoot location at 2660 Lafayette Road.

The main reason for the popularity of the grocers is the city's increasing ethnic diversity.

"Indianapolis is growing and we're getting more variety," said Jacqueline Belus. Her mother, Ingeborg Belus, will open Inge's German Market at Fishers' Town Center in mid-December.

In 1990, the city's Asian population stood at 6,943, according to the U.S. Census. Hispanics numbered 7,790. By 2004, the Asian population had swelled to 9,527 and the Hispanic population to 45,555. That amounts to increases of 37 percent and 485 percent.

The "explosion of ethnic markets" is why larger retailers are starting to offer lengthy aisles of specialty foods, said Joseph A. Lackey, president of the Indiana Grocery and Convenience Store Association.

"If you go in any of the major operations today, you'll find ethnic foods," he said.

Retailers aren't the only ones rethinking their product line.

Indianapolis Fruit Co. Inc., which distributes produce in 14 states, hired Lori Taylor, a former high school Spanish teacher, in August as its first Hispanic sales representative.

The company started working with Tienda Morelos in August. It sees such arrangements as a natural way to expand. It's in the process of translating its invoices and Web site into Spanish.

Getting a piece of the ethnic market, however, will require more than translating paperwork.

"In the Hispanic area, there are a lot of items that we have not handled before," Taylor said. "It's a new challenge."

Nopal, for example, is an edible cactus indigenous to Mexico that's popular in Latino households. Indianapolis Fruit has never stocked it. It's in the process of figuring out where to buy it and how to get it here.

Gonzalez said grocers who want to capture more of the ethnic market need to figure out more than logistics. They need to know the difference between "tamale eaters" and "tamale makers."

"These large chains cater to the tamaleeater," Gonzalez said. If they want to capture more of the ethnic market, they need to offer products that only specialty markets are providing. In the case of tamales, Gonzalez said, that means fresh pork head.

The burgeoning number of stores may do more than satisfy a jones for curry. Gonzalez called stores like Tienda Morelos "engines of economic development." He knew of at least one employer, the trucking company Transpoint LLC, that is using the growing number of ethnic groceries as a recruiting tool.

"[Transpoint] is going to Texas and recruiting drivers to move to Indianapolis," Gonzalez said. "It couldn't do that five years ago. But now, the word is out that there's a very good [Latino] community in Indianapolis."

Not everybody is so thrilled.

The grocery association's Lackey said the smaller stores often "run afoul of all kinds of health codes," although he admitted the problem isn't as bad as it once was. One of his members recently called to tell him about a Middle Eastern market that had "a table loaded with 300 raw chickens" that weren't on ice.

Health department officials would shut down any grocer that so egregiously violated food codes, but because of language barriers ethnic grocers don't get the same scrutiny, he argued. Lackey would not provide IBJ with the address of the market.

Proprietors said Lackey's position is unfounded.

"It's simply not true," said Pat Jamerson, manager at La Frontera at 2401 W. Washington St. An employee at Oriental Market, 2370 Lafayette Road, said inspectors drop by the store seemingly twice a month.

Health Department officials also sided against Lackey.

"In general, [inspectors] are probably spending more time in these facilities because of the language barriers," said Scott Gilliam, director of the Food Protection Program for the Indiana State Department of Health.

In Marion County, all stores are inspected one to four times annually, said Ed Culver, administrator of the Department of Food Safety. Stores with poor records get inspected more often than stores with good ones.

Culver conceded that "major chains tend to have corporate training programs" that make it more likely for them to follow the rules. But he added: "I'd be hesitant to say there's a real difference" in terms of their records.

Culver also stood by the department's record.

"It's a very good one. We don't have a lot of major food-borne outbreaks," he said.

Observers predict a few trends. The first is the addition of stores in smaller cities such as Terre Haute. The other is an even wider variety of stores in Indianapolis.

"New on the horizon would be grocery stores that cater to the African, Caribbean, and West Indian" communities, said Caterina Cregor Blizter, executive director of the International Center of Indianapolis.

And some predict larger stores will try to elbow out their smaller competitors. Gonzalez said it's already happened in Houston. He hopes it doesn't happen here.

"There's something unique about these small stores that I would hope the city retains."
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