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P r o d u c e S h o w D a i l y 6 7 F r i d a y, O c t o b e r 2 3 , 2 0 1 5 VOLM ADDRESSES SUPPLY CHAIN CHALLENGES For more than 60 years, Volm Companies has been providing fresh produce growers, packers and retailers innovative and differ- entiated packaging, equipment and supply chain solutions in an effort to improve operating costs and efficiencies. In 2015, Volm will be helping customers manage their packaging supply chain challenges through the introduction of Volm Inventory Management Solution (VIMS). VIMS cre- ates visibility into the grower/shippers' packaging supply chain to help customers strengthen their balance sheets, improve their earnings and simplify their operations. Typically, growers/shippers that implement VIMS in their business are trying to solve the following business challenges: Too much inventory and obsolescence: A typical grower/shipper has between $200,000 and $800,000 of capital invest- ed packaging inventory. This is capital that is not available for investment in more productive uses in their business. Additionally, 25 to 50 percent of their inventory is either slow moving or obso- lete. Obsolescence is the silent killer of the supply chain, having a negative impact on a grower/shipper's bottom line and capital requirements. Implementing VIMS can free up capital, thereby allow- ing the grower/shipper to invest in more productive, value producing assets. Lack of human resources: Another challenge for customers is the lack of supply chain experience or those with the experience have to spend their time on routine, repetitive supply chain tasks instead of using their knowledge to create value for their cus- tomers. Implementing VIMS can either pro- vide that experience or free up customers team members to focus on other more profitable activities. Tired of 911's and supplier failures: Disruptions in the packaging supply chain or unforeseen changes in demand cause customers to have to scramble to take care of customers. These disruptions are expensive – not just financially – but are organizationally taxing to the team as they normally take individual heroics to correct. Implementing VIMS can remove the need for individual heroics by addressing potential supply chain chal- lenges before they become emergencies. Reducing costs by matching orders with supplier economics: Size by itself doesn't create cost savings for customers. Rather, cost savings is created by provid- ing orders and forecasting that a supplier can plan their pro- duction around. Implementing VIMS can provide your sup- pliers with the forecasting needed to not just be another order, but rather a business partner. According to Volm's CEO and President Daniel Mueller, "We are doing something very different than is being done by anyone else in North America as it relates to fresh produce. We are build- ing something that we can take to our cus- tomers and say 'From when your product enters your facility, to when it hits the store shelf, we want to offer the highest quality solution available.' While there are other companies providing packaging or equipment, no one else is pulling all the solutions together to be a single total solution provider for fresh produce." For more information on VIMS and Volm's Total Solutions, go to www.volm companies.com or call 800.253.4737. MASTERING THE SCIENCE AND FAILING AT THE ART: KNOWING THE HISPANIC CONSUMER By Albert Rodriguez, Senior Vice President of Operations, Nogales Produce Inc. The grocery industry today understands the statistical trends of the ever-growing Hispanic consumer market, but many establishments – from the mom and pop stores, to national retail chains, to large chain convenience stores (c-stores) and their smaller operating counterparts – still struggle to understand the art of con- necting with Hispanic customers. Many get a passing grade for appreciating the scientific statistical data, but they still fail to understand the art of actually connect- ing with Hispanic consumers. The Science of the Numbers The Hispanic population remains the fastest-growing demographic in the U.S. and is expected to increase from 17 per- cent of the population to 26 percent by 2050, according to the Pew Research Center, a preeminent public policy and research organization. And, with that population growth there is a surging undercurrent of Hispanic buying power. Hispanics in the U. S. are an eco- nomic powerhouse. According to a Nielsen study, in 2014 the buying power of the U. S. Hispanic market was $1.3 trillion and is expected to reach $1.5 tril- lion in 2015. This statistical trend shows a gain of 155 percent since 2000. That is a highly significant statistic as it repre- sents a far greater gain than the 71 per- cent increase in non-Hispanic buying power. And, at $1.3 trillion, the 2014 Hispanic market is larger than the econo- my of all but 15 countries in the world. By 2019, it is estimated by the Selig Center for Economic Growth that Hispanics will account for 10.6 percent of total U.S. buying power. When it comes to Hispanic buying power within the grocery industry across all channels, the group represents an indomitable consumer force. According to a joint study by the Center for Multicultural Science and the National Grocers Association (NGA), U. S. Hispanics spent an estimated $23 billion in retail grocery stores in 2012, repre- senting 17 percent of the total estimated annual sales of the independent retail grocery channel. The Art of Understanding They say that science and numbers don't lie. So why are businesses – especially in the grocery industry – still challenged to truly understand and properly market to the Hispanic consumer? As the Senior Vice President of Operations for Nogales Produce, a leading nationwide distributor of Mexican produce, Hispanic grocery dry goods, and restaurant supplies, as well as a leading consultancy specializ- ing in connecting businesses with the Hispanic market, I have learned that unfortunately many businesses cut class when it comes to truly learning and understanding the Hispanic consumer. They go to statistics class and analyze the numbers correctly, but they blow off art class and ignore the true craft of connect- ing with Hispanic consumers. When it comes to the art of connect- ing with the Hispanic market, the grocery industry and all businesses must look through a cultural lens to understand Hispanic consumers' needs. Nogales Produce has been in business for 25 years. The family-owned business grew from the humble beginnings of selling produce at the Dallas Farmers Market to now being a national leader in connecting businesses with the Hispanic market by consistently being in tune with the heart and soul of the Hispanic consumers' cul- ture. Merging Art and Science: A Fresh Look at the Hispanic Consumer Market Two recent studies, one performed by Nielsen and another by the NDP Group, clearly illustrate why businesses continue to fail to truly understand the Hispanic consumer. Many businesses today understand Hispanic sta- tistical market data, but they still do not know the number one criterion for attracting Hispanic grocery consumers. Most would be surprised to know that it is 'fresh food.' And, many businesses in the grocery industry would not know that Hispanics are far more likely to purchase grocery items from convenience stores than non-Hispanics. And, it all has to do with merging statistical scientific data with the art of understanding the Hispanic consumer's culture. The 2014 Nielsen study focused on the buying power of the U. S. Hispanic consumer market, its buying preferences and where the consumer group spent money. The study found that Hispanics place a high value on fresh foods. It also revealed that Hispanics spend on the average $175 more than the national average on fresh foods per year. And, why fresh foods? According to the study, Hispanics found fresh foods to be an indicator of quality and health. It also found that Hispanics prefer fresh food, as they tend to prefer to cook from scratch, and add personal touches to dishes. The Nielsen study furthermore reported that Hispanics spend a greater percentage of their income on groceries than non- Hispanics. Another notable cultural trend with the Hispanic consumer market is its shopping experience where c-stores are concerned. The 2013 study conducted by the NDP Group, a leading global market- ing information and advisory services firm, found that Hispanics in the U.S. are more likely to purchase groceries, dairy items and bread from c-stores than non- Hispanics. The study also revealed that U. S. Hispanics, on average, make almost two more visits per month than non- Hispanics to "major oil chain conven- ience stores, and nearly one more visit over a 30-day period to traditional c- stores than non-Hispanics." The NDP study also corroborated the Nielsen study regarding the Hispanic consumers' desire for fresh food. Like the Nielsen study, the NDP Group found that over two thirds of surveyed Hispanics consider having fresh food available at c- stores to be somewhat to very important. Furthermore, the NDP Group reported that fresh foods are more likely to be pur- chased by Hispanics for lunch or break- fast and hot foods are preferred. The study also noted that as one of the fastest growing U.S. population groups, Hispanics are an important segment for the c-store channel, and that having a good range of grocery like items and other staples at c-stores may increase Hispanic traffic. It also stated that "pro- moting fresh foods considered to be more home-made or cooked at c-stores should resonate well among Hispanics." Connecting with the Hispanic Consumer Market: A True Art Form The data is all there. The statistics are front and center. Businesses understand what the scientific statistics reveal about the Hispanic market in terms of popula- tion growth and buying power. They get the science and the math. To truly reach the Hispanic consumer, however, busi- nesses have to become better at the art of truly understanding the Hispanic con- sumers' culture which helps define their buying habits. Even the big guys still get it wrong. CNN Latino, the network's Spanish language programming venture, failed. NBCLatino.com shut down. They did not fold because CNN and NBC did not understand the numbers. They well knew that the Hispanic population and its buy- ing power continues growing faster than any in the U.S. They did not succeed because on some level they failed to understand the art of connecting with the Hispanic market. In order to succeed in connecting with the Hispanic consumer, all businesses that want to target the Hispanic consumer market have to look closely through a cultural lens with pre- cise accuracy to truly understand their needs. And, at Nogales Produce, we knew how important it was to turn that into an art form. For more information, visit www.nogales produce.com.