Full-service, scratch panaderias and tortillerias are integral to this Mexican supermarket chain in Southern California. Its customers simply expect it.
To understand the draw of in-store baking for Northgate Market customers, hang around the bolillo case. Most of the chain's 29 stores feature large, full-line bakeries that offer a beautiful array of cakes, Mexican sweet breads and pastries. But, the unassuming bolillo case demonstrates the significance of hot baking to the supermarket.
As customers shop the bakery, they literally stalk the bolillos. If the case is looking about half empty, they know another batch of the piping hot torpedo-shaped buns will soon be delivered directly from the oven about 20 ft. away. So, they linger around the bakery a while, picking up a few other bakery products that are either on their list or look too good to pass up.
When the baker refills the case with hot bolillos, customers line up to get their share out of the self-service case. No announcement is made or schedule posted, but customers from all over the store seem to know the bolillos are ready, and they head to the bakery.
Gonzalez Northgate Market, Anaheim, Calif. caters to this demand for fresh foods in all its departments. Produce is stacked high and orderly, more in keeping with the Whole Foods Market approach than a run-of-the-mill supermarket. The meat department, staffed by real butchers, is one of the busiest areas of the store. Open-production tortillerias demonstrate the entire tortilla-making process, from cooking the corn through baking the flat dough and packaging them off the conveyer of the tortilla machine.
“Our core clientele is Hispanic, specifically Mexican,” says Lupillo Ramirez, marketing director for Northgate. “We're open to everybody, but you need to specialize, and we specialize in the Mexican customer.”
That specialty is a booming niche with Hispanics representing the fastest growing consumer segment in the United States. By 2010, the purchasing power of this segment is predicted to reach $1 trillion, and Hispanic consumers shop for groceries an average of three times more per month than general shoppers, according to the Food Marketing Institute. In Los Angeles, Orange and San Diego counties, Mexican consumers predominate.
Miguel Gonzalez Sr. founded Northgate in 1980, taking the name “Northgate” from the store he purchased because he did not have enough money left for a new sign. Gonzalez died in 2001, but the company remains family run and 12 out of 13 of his children still work for the company.
Oscar Gonzalez is the chief operating officer, while Victor Gonzalez, vice president, marketing, oversees the bakery and several other departments along with his marketing duties. Bakery Director Augustine Cabrera reports to Victor, and Bakery Supervisor Felix Arellano handles bakery merchandising and coordinates bakery operations with the bakery managers of each store.
Growth phase to continue
Northgate is in a growth phase not only because of the booming Hispanic population, but also from other supermarkets withdrawing from certain California markets. In March, the company grew from 25 to 29 stores by purchasing El Tigres, another local Mexican supermarket chain. Northgate also entered the San Diego market for the first time about a year and a half ago by purchasing a former Alberton's location. The 60,000-sq.-ft. store is one of Northgate's largest and has quickly become one of its top selling locations. Plans are in the works to expand further into the San Diego market, according to a report in the San Diego Business Journal.
“We see San Diego as a large and relatively untapped market,” Carl Middleton, Northgate's vice president of real estate, told the Journal. “We would like to open one to three a year if the opportunities presented themselves.”
As the company expands, its in-store bakery program will remain an integral part of Northgate Market's brand.
“Our Mexican customer is really fond of hot, just-baked products,” Ramirez says. “If you are a market, you've got to have a hot bakery.”
Each bakery employs about 12 people, and most of the bakers come to Northgate with prior baking experience. The product line is extensive with more than 200 bakery SKUs offered daily. With such an elaborate product line produced primarily from scratch, each in-store bakery operates like its own retail bakery, and some products vary from store to store.
“Maybe they [experienced bakers] feel attracted to us,” Ramirez says. “For an artisan baker to go from a mom and pop bakery to more structure like ours is a change, but we attract them because we are still doing everything from scratch.”
Scratch baking is on display through open production settings and baking production scheduled throughout the day. Most Northgate bakeries feature a glass-front rack oven as the centerpiece of its retail area, so customers can view products as they bake.
Tres leches (three milks) cake, with origins in Latin America, has become an exceptionally popular bakery product across all borders. While tres leches reigns supreme at Northgate Market as well, the bakeries' mocha-flavored version is the top-selling cake.
Appeal to new generations
Cakes are big business for Northgate, bringing in about a third of bakery sales. Custom decorated cakes are in particularly high demand for Mexican consumers' family celebrations, Ramirez says. “We probably have more celebrations than any other culture,” he says. “We have big families, and every weekend it is somebody's birthday it seems.”
Mexican sweet breads, which include sweeter single-serve products, such as conchas, sweet empanadas and marranitos, are the second largest sales category at Northgate bakeries. Conchas, the shell-shaped pastries, are available in an array of colors and flavors, including chocolate, pink, yellow and chocolate-vanilla. Marranitos, or “little pigs”, are gingerbread cookies shaped like a pig and often decorated with colorful sprinkles or icing glaze.
Bread products are the third largest sales category, and Northgate offers a full variety that extend beyond traditional Mexican breads. Along with the bolillos and telera rolls, which are a daily staple for many households, bagels and European-style crusty breads are increasingly popular among Northgate's customers.
“I'm an immigrant, but my kids are more Americanized,” Ramirez says. “The bagels are for the second generation.”
Bagels along with all other bakery products are freshly baked in-store, which appeals to every generation and ethnicity. That concept is engrained in Gonzalez Northgate Markets' company philosophy and will help drive its future growth.
Northgate Market: a sampling of prices
|Marble cake, 8 in. round||$11.99|
|Vanilla cake, ¼ sheet||$24.99|
|Fruit tart, 9 ins.||$14.99|
|Cheesecake slice, 6 ozs.||$2.69|
|Carrot cake, 8-in. round||$11.99|
Northgate Market: at a glance
Headquarters: Anaheim, Calif.
Founded: 1980 by Miguel Gonzalez Sr.
Management: Oscar Gonzalez, C.O.O.; Victor Gonzalez, V.P., marketing; J.G. “Lupillo” Ramirez, marketing director; Augustine Cabrera, bakery director; Felix Arellano, bakery supervisor
Annual sales: $250 million
Bakery contribution to store sales: 4.5% average per store
Number of stores/bakeries: 29/27
Avg. store size: 50,000 sq. ft.
Major bakery equipment: vertical mixers (2), spiral mixers (2), automatic divider/rounder, sheeter, proofer, rack ovens (2), glass-front display rack oven (1)
Primary production method: scratch/mix
Plans: Remodel and incorporate El Tigres stores under the Northgate Market banner, continue expansion in San Diego and other Southern California markets as opportunities arise, develop more consistency in its bakery products among the stores while still maintaining the individuality of scratch baking in each store
Web site: www.northgatemarkets.com