The growing Hispanic population has many in-store bakery operators adjusting product lines and modifying merchandising tactics, but the nation’s oldest Hispanic supermarket chain is addressing demographic changes of a different sort. An evolving economic base and an expected influx of non-Hispanic residents are spurring 63-year-old Tresierras Supermarkets to adapt its proven marketing strategy to the new conditions.

The late Frank Tresierras, a native of Hermosillo, Sonora, Mexico, opened his first store in San Fernando, Calif., north of Los Angeles in the San Fernando Valley. Currently, his surviving sons operate four stores with three bakeries and tortillerias west through Ventura County to the Pacific Coast.
The family has built the company’s reputation on providing the area’s Hispanic consumers, most of whom are engaged in vegetable farming, with high quality food, especially meat and fresh bakery products, at reasonable prices.

Mr. Tresierras introduced on-premise baking with the opening of his first store. Lote Thistlethwaite, director of foodservice, which includes bakery, explains that freshness is important to Hispanic consumers.
“Just as in their native countries, Hispanics shop for food almost daily, and those trips generally include purchasing bread or tortillas,” he says. “Our emphasis on fresh product will be important as the company grows.”

Bakeries offer about 100 items daily from 250 available products, mostly Mexican items, including specialty and variety breads and rolls, cookies and pastries. In recent years, Tresierras added Anglo-oriented items, including decorated cakes, donuts, pies, puff pastries, cookies, bagels and cheesecakes.

The company developed its Hispanic bakery line with the authenticity of its hot prepared foods menu. Tresierras adapted family recipes for inclusion in its stores’ café menus, dominated by meat entrées, and beans and rice dishes. The in-store bakeries supply breads, while the tortillerias provide tortillas.

“These dishes are truly traditional Mexican food,” Thistlethwaite says. “In many cases, they have become home meal replacements and, thus, must be authentic. We’re using all of our departments to complement one another to attract customers. This makes for a more rewarding shopping experience.”

The most popular items are traditional tres leches cakes, bolillos (mini baguettes) and conchas (sweet breads). Sales of decorated cakes, which were introduced two years ago, have surpassed bread sales.

Switching focus to cakes
“When I joined the company (in 2003), we were trying to beat our competitors by offering good bread, better than what they sold,” explains Thistlethwaite, a restaurateur and graduate of the Cordon Bleu program at California School of Culinary Arts. “We decided to focus on products that the competitors don’t offer, like decorated cakes and pastries, and then get customers to buy our bread.”

Hispanics have “a zillion feasts, holidays and celebrations that call for decorated cakes and desserts,” he adds. “Every event, no matter how large or small, has some type of sweet, such as a cake, flan or gelatina (flavored gelatin cubes combined with tres leches, the three milks used with tres leches cakes).”

Before decorated cakes were added, the cake line was limited to a few varieties of dessert cakes. The company introduced custom-decorated and all-occasion cakes not only to increase sales but also to add color to the bakery. “They have made shopping the bakery more festive,” Thistlethwaite explains.
Most cakes are filled quarter-sheet cakes; single-layer cakes generally are limited to sales promotions. “We would rather be known for and sell filled cakes,” he says. “Plus, they’re more profitable.”

Character kit cakes, featuring popular children’s TV and motion picture characters, sell especially well. “Every child recognizes these characters on the cakes, which we display at eye level in the cases,” he adds.
Cake sales are especially strong in Tresierras’ western-most store in Oxnard, Calif., in Ventura County. The company remodeled the bakery with curved glass showcases for better cake displays and to show off the decorators’ talents at a decorating station open to customer view. The combined efforts have yielded a 60 percent gain in cake sales during the last two years to 200 cakes a week.

Alejandro Cano, store director, says increased cake sales have contributed much to the bakery’s sales growth. Year-to-date revenue is increasing by 40 to 53 percent from 2006, he says, and bakery sales as a percentage of store sales run from 4.5 percent to 6 percent in the store, which has nearly 30,000 SKUs.

Bread varieties
The strategy to use cakes to introduce customers to breads is working. The bread lineup currently includes 75 different types of bread products, largely different shapes and sizes from five different doughs, which with the pastry doughs, provide great flexibility, he says.

An example is pan fino, a moist, slightly yeasted dough with crushed cinnamon and other spices and filled with pasta, or paste, made with flour, sugar, shortening, baking powder and food color. Bakers mould pan fino into several different shapes, including pan de elote, or corn bread. After rolling a dough piece around an oblong piece of pasta, they turn down one end of the dough into three sections to expose the pasta. The effect emulates a partially shucked ear of corn.

Pan de elote is an example of the bakers’ creativity, which has helped Tresierras’ bakeries distinguish themselves from other Hispanic operators and boost bread sales.

The crews prepare most products from scratch and mixes. “We believe in scratch production to make the products that our customers expect,” Cano observes. “These are the products that they would see back home. We want to keep the tradition alive.”

To help maintain scratch and mix production, Thistlethwaite brought in automated equipment to produce bread products in volume and keep a lid on labor costs. “We can dedicate more labor to cakes, which are more profitable and are growing,” he says. “With more cake sales, we can add another baker to handle scratch baking and still keep our labor costs within an allocated percentage of sales.”

The Oxnard bakery installed a semi-automatic divider-rounder and sheeter-moulder to increase productivity of high-volume items, such as bolillos. This has enabled the bakers to make up and retard product for proofing and baking the next day.

In addition, the bakery recently replaced its single-rack oven with a rotating double-rack unit, largely to handle increased bread sales.

To enhance productivity, Tresierras cross-trains sales associates and decorators to handle proofing and baking, such as during afternoons after the bakers have left. At the Oxnard store, one baker and cross-trained decorators and bakery sales associates handle most of a day’s production.

The right production mix
When Thistlethwaite joined the company, he introduced several thaw-and-serve Hispanic items to add variety and spark sales. Since then, the bakeries have dropped about one-half of those products because the bakers began producing freshly baked versions.

“We would much rather display our own products–they’re better and we make more money,” Thistlethwaite says. Ingredient manufacturers are responding to bakers’ needs to produce authentic Hispanic products, yet “many products are not there. But, they’re getting better, especially frozen dough and mixes,” he adds.
Though scratch and mix are the primary methods, the bakers fill in production with frozen items. For example, while bakers use a mix for tres leches cakes, the top-selling sweet item, decorators prepare other cakes with frozen layers. Frozen items also give the bakeries a chance to introduce new products, such as non-Hispanic items like macaroons.

“We’ve had a challenge to introduce Anglo products to Hispanics,” Thistlethwaite says. “However, the Hispanic community is changing. Second- and third-generation families are becoming more educated and have more buying power. They are more inclined to shop at Vons or Whole Foods, compared with their parents who shopped exclusively at Hispanic stores.”

Store Director Cano adds that the area, notably Ventura County, is gradually moving away from agriculture as the land becomes more valuable for real estate development. “This will encourage more education as Hispanic consumers recognize they will need to prepare to work in higher skilled jobs,” he says.
With more education, newer generations are more health conscious, Thistlethwaite says. “They’re more inclined to cook with vegetable shortening, not lard, and are learning about trans fats,” he continues. These and other health issues have spurred the company to offer more health-oriented products.

For example, Cano notes, diabetes has become a major problem within the Hispanic community. During the winter holidays, Tresierras’ bakeries offer sugar-free pies. “We give customers with diabetes an option to enjoy dessert,” he says. “Though we promote these and other healthful products, it will take some time to educate large numbers of customers. Old habits are hard to change.”

Changing demographics
As commercial land development supplants agriculture in Ventura County, Cano says more non-Hispanics likely will move into the area. Asians, to cite one segment, comprise the fast-growing consumer group in the area. “The challenge will be offering the products they and other groups will want,” he says.
To help the bakeries handle the changes, Tresierras plans to remodel its other bakeries to improve merchandising and production and efficiency. The benefits of remodeling the Oxnard bakery have shown what can be done, Thistlethwaite says.

Also, he is working with the company’s human resources department to develop a more-structured bakery training program, which will include a path for promotion and opportunities to reward good performance of employees who want to make bakery a career. “We want to encourage people who want to learn,” Thistlethwaite says. “This, in turn, will enable us to build really strong bakery teams.”

In moving forward, Tresierras Supermarkets has established itself well within the Hispanic community. “Our stores have all the products that the other supermarkets have. We just carry fewer SKUs within the categories,” Thistlethwaite says.

“More importantly, we offer products that the other stores don’t sell. Foodservice cooks everything from scratch. Produce has the freshest fruits and vegetables. And, in bakery, we bake nearly everything we sell.”
The company is in the business of changing consumers’ perceptions of “what we do and how we do business,” he continues. “Our challenge is to increase the number of consumers in our stores who are unaware of the products that make us different. This is coming.”