A First For Hispanic Shoppers

It was almost a year and a half ago when Miami-based Navarro Discount Pharmacy, a 31-store drugstore chain serving South Florida, announced that it would launch the first store brand to target Hispanic shoppers across all categories. The new brand — dubbed Vida Mia (which translates to "My Life" in English) — was developed to be a perfect fit for Navarro's shoppers.

"As the Hispanic population in the U.S. continues to grow at staggering rates, we felt it was necessary to develop a brand that encompassed the components that we, the Hispanic consumer, desired," says Juan Ortiz, Navarro's CEO.

Cristy Leon-Rivero, Navarro's vice president, marketing and human resources, agrees.

"Navarro's typical consumer is a Hispanic female over the age of 50," she explains. "And in recent years, Navarro has been successful in servicing its core consumer, as well as attracting a younger Hispanic and non-Hispanic population through the products, services and new businesses within our brick-and-mortar stores — as well as a fully bilingual website."

Vida Mia also was created to be a perfect fit for the Hispanics who shop at other retailers. Through its wholly owned subsidiary Magellan Distribution Solutions, the drugstore chain licenses the brand to noncompeting U.S. retailers that serve a strong Hispanic consumer base (see "License to sell" sidebar on p. 14).

Navarro unveiled the first Vida Mia products at the Private Label Manufacturers Association's 2011 Private Label Trade Show last November. A chain-wide rollout took place in January 2012, says Ed Sacks, Navarro's Vida Mia project lead.

At press time, more than 600 Vida Mia SKUs were on store shelves. And by the end of the retailer's fiscal fourth quarter 2013 (which will take place in February 2013), the brand is projected to total 1,300 SKUs.

Brand basics

Vida Mia is the main brand in Navarro's private label portfolio, but it covers five sub-brands of national-brand-equivalent (NBE) products: Mi Salud (health), Mi Bebe (baby care), Mi Belleza (beauty), Mi Sabor (food and beverage) and Mi Casa (household). In addition, it incorporates "V," a sub-brand of NBE-better beauty products that Leon-Rivero says are of "salon and professional quality." (As a member of the Chain Drug Consortium, Navarro also offers the Premier Value brand — although a number of those products are being replaced with Vida Mia items.)

Leon-Rivero notes that Navarro developed Vida Mia not just to attract a new clientele, but also to better serve its current class of trade. With bilingual packaging and products in every category, Vida Mia is a brand created by Hispanics for Hispanics.

"The brand was thought to be something we believed customers would welcome as an added value to their shopping experience," she explains.

To develop the brand, Navarro contracted Premco Marketing International, which boasts strong expertise in developing a private label program geared toward the Hispanic shopper, Leon-Rivero says.

"Ed Sacks, principal at Premco, has developed several Hispanic labels for retailers in the USA," she explains. "They have been primarily grocery [brands], but his company also has knowledge and experience in the OTC and HBC categories. Therefore, it was a perfect fit."

During development, the team conducted several focus groups to learn what Hispanic shoppers in South Florida were looking for in a brand, Sacks says. Price, quality, accessibility, packaging and user experience were five of the most important factors to the participants.

Sacks is particularly proud of two items. The first is the Vida Mia Mi Casa Multi-Purpose Cleaner (5-liter), which is said to match the "unique fragrance and foaming action" of a regional all-purpose cleaner that's a favorite of Hispanic South Floridians.

"We went to great lengths to match the formula, including importing the fragrance from Spain and buying our own mold for the bottle," he notes.

The second is Vida Mia Mi Sabor Café Espresso ground coffee, which Sacks says satisfies the taste of the discriminating Hispanic coffee drinker. To create the perfect blend, Navarro performed several blind taste tests with its Hispanic shoppers.

"We are very specific about [what Hispanics like in regard to] coffee. It's about [having] the right blend to result in the perfect taste to share in this social — but yet traditional — beverage a few times per day," Leon-Rivero explains.

Quality is key

And Navarro is very specific about product quality expectations, Sacks emphasizes. The drugstore chain holds one-on-one meetings with each of its 30 Vida Mia vendors to make sure everyone is on the same page regarding product specifications. As more vendors come on board to handle Vida Mia, it will hold group meetings with them to determine the brand's direction.

"All vendors who supply national-brand-equivalent products are welcome to participate in the [Vida Mia] program," he explains.

Navarro also relies on a third-party laboratory for quality assurance (QA) testing, Sacks says. Using the retailer's list of specifications, the laboratory evaluates random samples of products throughout Navarro's distribution center.

"We also pull samples from each shipment and have our employees evaluate the product before it is sent to stores," he points out.

Package appeal

Navarro is as careful in package development as it is in product development. According to Leon-Rivero, the drugstore chain took its Hispanic shoppers' opinions into account when designing the Vida Mia logo. But it made sure to stay away from the flag colors of any specific country in the design, as the brand is intended to appeal to Hispanics of all backgrounds.

"Based on consumer preference, it was confirmed that vibrant colors and lifestyle images [needed to be] applied throughout the various package designs," she explains.

Navarro contracts two outside firms to execute specific package design. In some cases, package design emulates that of a product's national brand counterpart. But in other cases, Navarro goes with a more unique look.

Price, placement and promotion

Navarro also must take each Vida Mia product's national brand counterpart into account when pricing an item. Leon-Rivero notes that maintaining an attractive price gap is absolutely critical for a product's success.

"The mantra is: Value equals price savings plus equal or better quality," Leon-Rivero states. "To maintain trust and repeat sales, this is never compromised in any category. We know our competition may have less-expensive private label items, but we are targeting a quality brand offering."

Of course, it takes more than price to attract customers to a store brand product — placement counts, too. Leon-Rivero says Navarro positions Vida Mia products on the shelf alongside their national brand counterparts. It also places the products on end caps, on counters and in dump bins.

Outside the store, Navarro has engaged in several efforts to market Vida Mia. First, the retailer held several well-attended community events in the Miami market geared toward Hispanics — with Vida Mia on prominent display.

"The Vida Mia display consisted of showcasing products and sampling food items," Leon-Rivero notes. "Bags full of Vida Mia products were raffled to customers as well."

Second, the retailer mails a weekly circular via Redplum and The Flyer to 800,000 households and places inserts in The Miami Herald and El Nuevo Herald. It also runs an electronic media campaign and incorporates messaging and promotions on various social media platforms.

"Vida Mia plays an important role in all marketing mediums," Leon-Rivero says.

Speaking of electronic media, Navarro also sells products — including those under the Vida Mia brand — on its online store, www.navarro.com. The site is fully bilingual, allowing for the retailer to "better communicate with [its] customer base in the language of their choice," Leon-Rivero says.

"Navarro Discount Pharmacy wanted to expand its footprint into other markets … with the product assortment and value proposition that is found on Navarro.com," she notes. "The online store allows Navarro an opportunity to branch out and cater to many people throughout the United States, offering unique items at a great price."

What's in store?

Going forward, the Navarro online store and Navarro's licensing program together will play a major role in turning Vida Mia from a regional store brand to one with a national reach. Manuel Leon, vice president and director of wholesale and OTC programs, notes that a key private label goal for Navarro is to have national exposure in all Latin markets through the website and "forward-thinking retailers that also want to better cater to the Hispanic customer base in their markets."

But in the meantime, Leon-Rivero says Navarro's brick-and-mortar stores in South Florida will continue to serve not only as drugstores, but also as "a meeting place in the community." In every store, Hispanic shoppers may consult with bilingual personal fashion advisors, enjoy a hot beverage at a coffee bar, and pick up Vida Mia products — exclusive products that fit into every aspect of their lives.

"We are first and foremost a community pharmacy," she emphasizes.

Navarro Discount Pharmacy, at a glance

Headquarters: Miami

Top Executive: Juan Ortiz, CEO

Retail Banner: Navarro Discount Pharmacy

No. of stores: 31

Store Brands: Vida Mia and Premier Value

No. of Store Brand SKUs: 1,500

License to sell

In addition to offering the Vida Mia brand in its stores, Miami-based Navarro Discount Pharmacy wholesales the brand to noncompeting retailers. Retailers across the country with a strong Hispanic consumer base may offer Vida Mia products in their stores under a special licensing and manufacturing program.

Jim Thatcher, chief operations officer of Navarro, says he has seen this concept work successfully in the supermarket industry. Small retailers, for example, will get much benefit from this arrangement, as it provides them with credibility and additional product lines.

Through market research aimed at Spanish-speaking consumers, Navarro discovered several common areas that need improvement when marketing to the Hispanic trade, notes Juan Ortiz, Navarro's CEO. And it developed Vida Mia to address these areas.

"We believe that our product, packaging and quality will help retailers who are focusing on the Hispanic trade to build trust with the customer when they shop their stores," Ortiz says.

However, Hispanic consumers are not all alike — a shopper with a Mexican background might have different tastes than a shopper with a Cuban background. Ortiz states that Navarro understands this reality.

"No matter the ethnicity, the bilingual package appeals to all groups," he says. "And based on the target Hispanic market, products are available or can be developed to best cater to the retailer's needs. This is why the focus groups and the Castilian Spanish were so important to the development process."

At press time, Navarro was working with several retailers across the country to "design the best approach for their specific Hispanic customer," Ortiz says.

For more information about licensing Vida Mia, contact Ed Sacks at [email protected].