Natural Foods Merchandiser
Martin Lopez  Herbs of Mexico

Checkout: Find natural retail success in Hispanic market

By focusing on the customer, Martin Lopez has built a Hispanic market that competes with the big natural grocery stores. Here's how.

When a young Martin Lopez would tag along with his mother to Herbs of Mexico, little did he know that he’d someday own the iconic Hispanic herb store in East Los Angeles. But after befriending the owner’s sons as a child, and then later helping the brother who acquired the business to modernize the store, “I knew then that I wanted to own Herbs of Mexico,” Lopez says. After getting his MBA, Lopez purchased the business in 2006. Inspired by his mother, who believed strongly in Hispanic natural remedies, and determined to provide today’s Spanish-speaking consumers with premium-quality products, Lopez has built a highly successful two-store business that honors long-held Hispanic traditions while pushing the market forward.

NFM: Can you give us a “tour” of Herbs of Mexico?
Martin Lopez: Very few stores offer the quantity or variety of herbs we provide. We also sell different botanicals from around the world. We package a lot of our own products—about 75 percent of what we carry is our brand. In that way, we’re kind of like the Hispanic Trader Joe’s. We also bundle almond milk and different oils and grains, but we haven’t branched into a full-scale health food market. Mostly, we focus on formulating our own herbs. The original owners had wonderful formulas that we still use; we’ve just improved the quality of ingredients. We use steam sanitation and no irradiation and are very transparent about that.

NFM: Has the flagship store changed much since 1961?
Until a few years ago, we were a 250-square-foot retail space with wonderful bins full of herbs that we’d scoop out and weigh on the original scale from 1961. But we realized we needed to improve our system and our ability to keep things cleaner and more available. We expanded to a 1,800-square-foot retail space and now package our herbs in half-pound and 1-pound bags. We began properly naming and displaying categories throughout the store. Also, we used to keep a lot of products in drawers, just like an herbalist in Chinatown might do. But we decided to give everyone a peek, which really boosted sales. Actually, as soon as we expanded, we doubled our store’s sales and haven’t looked back.

NFM: Who are your customers today?
The majority are newly arrived immigrants, mostly Spanish speaking. I’d say 65 percent to 70 percent are from Mexico, and another 20 percent are their kids, first-generation Hispanics. The rest are other ethnic groups—Asian Americans, blacks. But 90 percent to 95 percent of our clientele will always be Hispanic.

NFM: Is your packaging and signage all in Spanish?
When we revamped our store, we went into bilingual mode. At first we tried Spanish first and English second, but it wasn’t working. Even though 90 percent of our shoppers speak Spanish only, English needs to be the dominant language in order to make things pop. Why? Mexicans living in the U.S. have assimilated to a more Westernized way of shopping. And since both the U.S. Department of Agriculture and Food and Drug Administration require bilingual packaging, these shoppers are used to seeing—and now expect to see—packaging and signage in English, particularly prices. My theory is they have the most trust and confidence in those items.

NFM: How has your customer base changed over the years?
We used to sell about 50/50 herbs and supplements; now we’re about 80 percent supplements and 20 percent herbs. Generally, the older customers buy mostly bulk botanicals, powders and formulas, while the newer ones buy mostly supplements. That’s where competition gets steep against CVS, Walgreens and Costco, so that retail trend affects us too. We try to maintain our specialty concept of offering unique products. Botanicals are a great way to get people in, and then they’ll see we also offer a good multivitamin or vitamin C.

NFM: How do you attract new shoppers and communicate with current customers?
The biggest way is word of mouth. You wouldn’t believe how many business cards we hand out—about 15,000 a month. People say retailers should go strong on the Internet, but it just doesn’t work that way for us. Our customers don’t go on Yelp, but they talk about us with their families and neighbors and pass along our business cards.

NFM: Who is your main competition?
The traditional outlets from which Hispanics acquire herbs are these esoteric things called botanicas. They are all over L.A.—1,500 to 2,000 in operation at any one time. Botanicas are deeply rooted in religious and mystical concepts of enriching your life. So along with herbs, they sell religious candles, Santeria items, even voodoo and fortune telling—a lot of unauthorized backroom medical treatments too. We don’t sell any of those things, which is how we differentiate. We are fact-based.

NFM: Because botanicals are so rooted in Hispanic culture, do you need to do much education?
Even though there’s a high level of herbal product use among Hispanics—as many as 85 percent used these herbs as children—we are big on education. Our second-most successful marketing tool is our seminars, held every two weeks. The main objective is to teach about a concept such as omegas or fiber. Afterward, we invite people back into the store and show them products that offer these nutrients. This lets us introduce concepts and products unfamiliar to the Hispanic market. For instance, we introduced Barlean’s because, although most already knew about flaxseed and loved it, they didn’t know about flaxseed oil. We translated the Barlean’s info into Spanish and held a two-month promotion during which we sold more flaxseed oil out of our one little store than did four Whole Foods Markets in our area.

Besides competition, what other challenges do you face?
In the Hispanic market, there are always trends and booms. For example, we saw a spectacular boom for canary seed a few years ago because of its reported uses for normalizing blood sugar, weight management and more. This trend started in Mexico, so we had a large influx of interest in Southern California. A lot of companies started providing products with canary seed. There is a lot of piracy of Hispanic-focused products, both in Mexico and the U.S. We’ve been a victim of piracy too, even seeing packaging that mimics ours. There’s also the issue of adulterated products sold as natural but containing pharmaceuticals. These get smuggled into the U.S., and you’ll see them on store shelves. We don’t carry these items, but we have to compete with stores that do. We always have to tell customers we don’t sell something or other because it’s spiked with pharmaceuticals.

Any big plans or new objectives in the works?
This year we put a lot of effort into our bilingual picture catalog that we’ll start sending to customers across the U.S. who buy via mail order. That’s a big push. Next year we’re revamping and introducing another brand of our product line called Herb Emporium. We’ll use that to branch out, just like how Starbucks makes and sells coffee in its own shops but also at retail. We’re not just a retailer but also a repackager, and we believe our wholesale business can really grow.

Tips from Martin Lopez: Meet clientele needs

Get vendors on board. When introducing a new product or concept to your customers, enlist vendor help in tailoring information to your customers’ specific needs. “We’ll ask vendors to translate a one-page info sheet on their product or brand to Spanish,” Lopez says. “We keep a lot of this type of literature on hand, which really encourages shoppers to try things.”

Instill trust to override price conceptions. “Hispanics are very price sensitive and worry less about quality,” Lopez says. “Sometimes shoppers think we’re too expensive, yet we have a reputation for providing guarantees and refunds. If you don’t like it, bring it back. This helps assure shoppers that we’re not trying to pull one over on them.”

Hire your customers. People who already love your store and are passionate about natural remedies can become some of your biggest assets. “We have very knowledgeable, bilingual staff, most of whom are former customers,” Lopez says. “Many other mom-and-pops that we compete with are limited in knowledge. They’re just sales mills. Shoppers say, “Those guys can’t tell me how to use a product, but your staff can."

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