A community anchor
For Anaheim, Calif.-based Northgate Gonzalez Market (Northgate), giving back to the community is not just a “nice thing to do”; it also is a part of its history and is built into its business philosophy and culture. Northgate’s first store, a store that catered to the Hispanic immigrant population in California, opened in 1980. Its founders, Don Miguel González and Doña Teresa Reynoso de González, believed that for their store to prosper, they had to give back to the community. According to the official company website, they began by donating to local sports teams and community events.
Today, Northgate operates 39 Northgate Gonzalez Market stores in California and is the managing partner of 11 Pros Ranch Markets stores in Arizona, Texas and New Mexico (a joint venture with Cardenas Markets). And as the business has grown, so has the retailer’s community involvement, culminating with the creation of the González Reynoso Family Foundation in 2000. The foundation donates to local schools and neighborhood sports teams, helps maintain sport facilities in communities and donates to families in need during the holiday season. It also supports orphanages and convalescent homes in Mexico.
But to Northgate, giving back also means offering high-quality, healthful grocery products at reasonable prices, especially fresh produce, to the communities it serves. In recognition of its commitment to health and wellness, Northgate received in 2012 the first loan given by the California Fresh Works Fund. The fund is meant to help finance grocery businesses that are willing to open stores in food deserts — areas that lack supermar¬kets with affordable and healthful food choices. In California, these areas are typically spurned by tradi¬tional supermarkets because the communities often contain a high immigrant, low-income customer base and have safety concerns, reports a Feb. 1, 2012 ar¬ticle on businessweek.com. But as a retailer that had its beginnings in the Hispanic immigrant community, Northgate welcomes the opportunity and the help to open stores in these areas and offer access to fresh and healthful food choices.
Fresh beginnings
From the very beginning, customers have been attracted to the retailer’s fresh departments at the perimeter of the store, especially its made-from-scratch prepared foods, says Mike Hendry, vice president of marketing for Northgate. In fact, almost everything in the retailer’s prepared foods section is made from scratch daily. This includes tortillas and bolillos (a Mexican bread), as well as salsas, carnitas, ceviches and roasted chicken, to name just a few. And customers’ experience with Northgate’s prepared foods was really their first store brand experience with the retailer.
“We see our high success with the fresh departments as the customers’ way of giving us permission to create these other center-store private label products, because they know we will take the same care with the center-store products that we do with the fresh departments,” Hendry says.
Currently, Northgate offers 300 private label items, 100 of which were introduced in 2013 alone. But the retailer’s success with its two-tier private label program has been so great that it plans to double the number of store brand items it offers within the next year. The retailer offers Gonzalez, a national brand equivalent or better store brand, as well as Gonzalez Supremo, a premium store brand that focuses on differentiated products. Additionally, it offers two niche brands, Northgate Market in its fresh department and Rancho Gonzalez in its produce department.
As Northgate began creating store brand products, it understood it would have to compete in each category not only with traditional national American brands, but also with major Hispanic brands — and that it would need to carefully select which categories it would enter first.
“We’re not yet fully developed with a private label product in every category in the center store,” says Lupillo Ramirez, director of private label, Northgate. “We’ve been picking categories that make the most sense to start with, and then we’re growing from there — it’s an evolution.”
One of the categories the retailer decided to enter right away was the household paper products category.
“Our customers do a lot of outdoor cooking and entertaining, so it was really important to us to offer our customers store brand products, especially since these products are usually the centerpiece of the outdoor barbeque,” Hendry says.
Additionally, Northgate knew that to have a successful store brand program, it would need to offer truly differentiated products.
“Differentiation is what we’ve built our business on,” Hendry says.
Ramirez gives the example of the tostada. To the general public, a tostada is just a fried tortilla, he says, but Northgate’s customers are very sensitive when tasting tostadas and can differentiate brands based on the texture, taste and appearance. For its Gonzalez Supremo brand, therefore, Northgate imports its tostadas from Mexico. The tostadas are made with a proprietary process that differentiates them from other tostadas. The final product is a light-tasting, almost grease-free rough-textured tostada.
“We’ve learned it really matters to be in tune with our customers’ preferences,” Ramirez adds.
Packaging done right
As Northgate began introducing its store brand products, the retailer worked hard to create the perfect label. In 2013, the retailer entered our Store Brand Packaging Awards and won Gold for their Gonzalez store brand (in the category “Line or Line Extension Across Multiple Categories”). The packaging features a white label with a white capital “G” superimposed over an orange square box. Underneath in lowercase script is the name “gonzalez.” Then in both English and Spanish text is the product name with a large photo depicting the product.
During the competition, judge Lisa Pierce, executive editor of Packaging Digest, said the packaging had a very clear family feel while also being simple and elegant.
“It’s a simple logo, but very eye-catching, and I think they’ve done a spectacular job on the product photography that goes along with it on the labels,” she added.
One of the other judges at the 2013 Store Brand Packaging Awards, Rick Lingle, technical editor of Packaging Digest, was also impressed with the Gonzalez logo.
“I haven’t seen a better use of the big ‘G’ since the cereal days,” he said.
Northgate’s Gold medal win meant a lot to the retailer and its store brand team, Ramirez says.
“The feedback we got from participating really encouraged us to keep going in the direction we were headed,” he adds. “They were able to see what we were trying to commu¬nicate: European, clean, uncluttered and fresh.”
One major aspect of the Gonzalez store brand label design is product photography. Most Hispanic consumers are very experiential, Hendry says. They like to feel and smell the product before they purchase it, but of course this is not possible with products such as canned Maiz Morado (an Indian corn) or canned tomatoes from the center aisles.
To overcome this issue, the retailer decided to include very large photos on center-store product labels. The photos are meant to communicate what the product looks like, even though the product is hidden by the packaging.
“We’re trying to help the customer ‘see’ what they can’t see,” Ramirez says. “Plus, we want our customers to be able to look at a package and immediately know what it is.”
Another prominent aspect of its store brand packaging is the bilingual, English and Spanish, text on its labels. While Northgate was initially opened to cater to Hispanics, and counts the Hispanic consumer as its primary shopper, the retailer has tried very hard to appeal to all nationalities.
“The labels for our store brand products are meant to be friendly to both Hispanics and non-Hispanics,” Ramirez says. “And while the inspiration for our labeling design comes from our Hispanic roots and homeland, we try to make sure it appeals to a variety of ethnicities.”
The retailer also offers customers the Gonzalez Supremo brand, which sports a very different look. It features a dark brown label with gold lettering. And while it sports the big “G” logo, similar to the Gonzalez brand, the Supremo big “G” wears a golden crown.
While still in its infancy (currently only tostadas are sold under this brand), Gonzalez Supremo was launched to provide Northgate customers with truly differentiated products. As more products are created and sold under this brand, customers will find they are a “step above” what the category typically offers and are also meant to be truly unique in some way, Hendry says. The brand’s packaging design is meant to convey that sense of exclusivity.
The retailer also is currently in the process of reviewing all of its store brands, including its niche brands, and evaluating whether or not it would be better to consolidate them all under one unified store brand.
“I think it could strengthen our brand appeal and brand awareness if we had more consistency to our offerings,” Hendry says. “I think the center-store team has done a wonderful job of getting the center store to [the right place], and now we have to figure out how we can carry that methodology over to our fresh departments.”
Skilled in own-brand marketing
When it comes to marketing and merchandising store brand products, Northgate always stocks its products to the right of the national brands and is not afraid to eliminate duplication.
“In our dry beans and milk categories, there is no need to have different brands,” Ramirez says. “We only offer our own brand. We try to make it easier for the customer by providing them the best quality for the best price. We give them the best option.”
And store brands, while not necessarily the focus, are always highlighted in promotional events. Northgate is very aggressive and forward-thinking in the way it engages with its consumer packaged goods partners, Hendry says, which allows the retailer to use a lot of interesting and unusual promotional techniques within its stores to integrate brands and build a differentiated experience — something that most retailers of Northgate’s size do not do.
“For example, we just had a big Lent promotion where we highlighted many private brand items with significant displays in the store, custom recipe booklets, on our social media site, on the TV and on the radio,” Hendry says.
And marketing activities are increasingly leaving print for digital. Hendry admits that just a few short years ago, the retailer was very print-centric, with a lot of its marketing money allocated to a traditional weekly ad. But now, it has become much more diverse.
“We think about the total customer experience and where we can engage them,” Hendry says. “To us, that means moving beyond the traditional TV and radio commercials or print flyers. Now we’re thinking about parking lots, community events and grassroots outreach campaigns. And, of course, digital plays a large role in all of this because our customers are digitally in tune and savvy.”
What’s in store
Going forward, Northgate’s strong commitment to connect with the community will continue to play a large role in its store brand growth, as will its dedication to providing fresh and healthful options to the neighborhoods it serves. First Lady Michelle Obama even applauded Northgate for this commitment when she spoke at one of its future store locations in Inglewood, Calif., back in 2012.
“The story of Northgate and the new Northgate Gonzalez Market that is being built here is the story that we want to tell in cities and towns across America,” she said, according to a White House press release. “It’s a story about bringing fresh, healthy, affordable food into communities that need it most. It’s a story about creating jobs, about revitalizing neighborhoods [… and] being a responsible member of the community.”
A motto that means ‘more’
The slogan for Northgate Gonzalez Market (Northgate), Anaheim, Calif., is “Te da más,” which when translated means: “You receive more.” For the retailer, this motto has a dual meaning. First, customers can expect to receive the best service and the best assortment of fresh produce and center-store products. Additionally, they can expect to purchase food from the fresh departments that has been made from scratch every day and cooked in the store.
However, it does not mean that the retailer has the lowest prices around, and the customer knows that, says Mike Hendry, vice president of marketing for Northgate.
“We are fair and affordable and a great everyday value, but we are not the cheapest,” he says. “Our customers know that we offer the best produce, the best-quality products and the best-tasting food; that’s why they keep coming back. That’s what pushes us over the top — those intangibles.”
Second, Northgate aims to be more than just an average grocery store. Each visit to a Northgate Gonzalez Market is meant to be a fun and enjoyable experience with a significant Hispanic twist.
“When most people walk into our stores, they say: ‘Wow!’” Hendry says. “The stores, especially on the weekends, are loud, busy and colorful. It’s a fun and exciting experience. Instead of building our stores to get people in and out fast, we build our stores to be a social place where our customers enjoy spending time.”
A portal to health and wellness
While Northgate Gonzalez Market (Northgate), Anaheim, Calif., might not be the first retailer to stress health and wellness in its stores, it is fairly new and unique for retailers that are focused on the Hispanic space, says Mike Hendry, vice president of marketing for Northgate.
“Our community is underserved when it comes to being provided with good, healthy options and education,” he states. “We have dedicated ourselves, and a big part of what we stand for, to providing our customers affordable healthful alternatives and help in making better decisions about health.”
The retailer first began doing this with its Viva La Salud shelf tag program back in 2009 and revamped the program in 2013. By using bilingual shelf tags, the retailer helps customers identify what foods are more healthful. The shelf tags, which can be found not only in the packaged goods aisles, but also in the produce and meat departments, help customers learn which categories, of 12 options, the product falls into. The categories include good source of fiber, gluten-free, heart-healthy, lactose-free, low in saturated fat, low sodium, no sugar added, omega-3, organic, smart sugar, whole grain and 100 percent juice. For consumers who want more information about what these categories mean, definitions are given on the company’s website.
However, the retailer is very selective when it comes to which products receive a Viva la Salud shelf tag. For example, diet sodas are not marked as sugar-free, and high-calorie chips are not labeled gluten-free even though they technically qualify for the tags, according to an article posted on the Community Commons website.
But the retailer did not stop there. In November 2012, it hired its own dietician. Her main role is to support Northgate’s Viva la Salud program, but she also conducts in-store nutrition classes combined with cooking demos alongside chefs as a way of teaching customers how to shop for and plan nutritious diets, reports a Feb. 5 article on the Retail Dietitians Business Alliance website. Plus, she works with Northgate’s Cocina, its hot prepared foods deli, to create healthful on-the-go meal options that don’t sacrifice on taste.
This attention to health and wellness has not gone unnoticed. One reviewer on Yelp referred to Northgate as the “Whole Foods Market for the working class Latino.”
And Northgate continues to make its store a portal for health. On a monthly basis, the retailer has between 20 and 30 store-based events occurring, Hendry says. It often works with non-profits to help its customers receive immunizations, mammograms, diabetes screenings and access to other free health-related services, as well as with schools to help teach children how to make healthful food choices.