Rafael Cuellar has had a busy summer. The first week of July — when Americans were celebrating Independence Day — he declared his own freedom from the life of an independent supermarket operator by selling President’s Supermarket, a Passaic, New Jersey-based grocery store that had been in his family for 21 years. Nearly one month later, on August 8, Cuellar took over ownership and operation of a neighboring ShopRite supermarket, becoming the first owner of Hispanic descent to join the 44-member, $9.5 billion ShopRite Supermarket cooperative, which spans five U.S. states and includes some 190 stores. All ShopRite owners are members of the Wakefern Food Corp., which buys, warehouses and transports products while providing other support services to its co-op members.
“We have jumped up into the $30 to $50 million range almost overnight, tripling our sales from President’s and going from 12,000 square feet to 61,000 square feet of space,” notes Cuellar, a sharply-dressed 36-year-old who often eases in and out of conversations with store workers in Spanish as he multi-tasks his way through an interview. “Another store would jump us into the six-figure million-dollar range. If things go well here, I would expect in the next three years to be looking at another store, another location.”
Spoken like a true entrepreneur — always building in anticipation of the next opportunity. In many ways Cuellar is the quintessential Hispanic entrepreneur: young, savvy, second generation and focused on wealth. He is one of many Hispanic-Americans who are taking advantage of the exploding Hispanic market in the U.S. They know their own community intimately, already a key advantage over anglo business operators, and are looking to become successful by delivering targeted services to a growing market of U.S. Hispanic consumers.
Figures released by the U.S. Census Bureau on July 28 reflect how minority groups, including Hispanics, are increasing business ownership in the U.S. According to the numbers — drawn from a collection of tabulations titled “Preliminary Estimates of Business Ownership by Gender, Hispanic or Latino origin, and Race: 2002” from the U.S. Census Bureau’s 2002 Survey of Business Owners – the U.S. had 1.6 million Hispanic-owned businesses in 2002, up 31% from 1997. These businesses’ receipts totaled $226.5 billion, up 22% from 1997. Hispanic-owned firms accounted for between 15% and 22% of businesses in New Mexico, Texas, Florida and California.
Shortly after the release of these numbers, Michael L. Barrera, CEO of the United States Hispanic Chamber of Commerce in Washington, D.C., called the findings “further validation of the passion and commitment that drives our Hispanic business community forward. We are delighted that Hispanic businesses, small and large, are being recognized for their vital role in contributing strengthening, and improving the vitality of the U.S. economy.… We are confident this trend among Hispanic businesses will continue to surge, fueling this unstoppable force that lies within our Hispanic business community.”
It is not surprising that Cuellar would focus his own passion and commitment on the northern New Jersey market. As of July 1, 2002, according to U.S. Census data, more than three-quarters of the nation’s Hispanics live in seven states, including New Jersey (1.2 million). The city of Passaic, with a population of 170,000, is nearly 70% Hispanic, and the bordering town of Clifton, where Cuellar lives, has a thriving Hispanic market.
From Madridto New Jersey
Cuellar’s family immigrated long before the most recent population boom. Born in Madrid, Spain, in 1969, he came to Paterson, N.J., with his family when he was nine months old. His parents had moved from Cuba to Spain, and feared for the life of Cuellar’s grandfather, who was in poor health and had no access to health care. The family, led by Cuellar’s father, Evelio, eventually opened a bodega in Paterson that would become the Passaic-based President’s Supermarket.
Cuellar has worked in the grocery business in one capacity or another since he was five. He took some time off starting at age 17 to join the Navy, earn a scholarship to Fordham University in New York City and work as a Naval officer in logistics. Cuellar came home to take the reins of President’s Supermarket when Evelio passed away in 1996.
His decision to sell President’s and buy into the ShopRite cooperative was prompted by an entrepreneurial voice urging him to pursue greater things that could result from his knowledge of the market. Around the time he was selling President’s, he was also approached by a group of venture capitalists proposing that he run a new chain of Hispanic supermarkets. He declined, choosing a path that he assessed as less risky.
“ShopRite is the largest retailer-owned cooperative in the United States,” explains Cuellar, who also toyed with the idea of fulfilling a lifelong dream of going to medical school. But the entrepreneurial voice was louder. “A lot of the decision to go with ShopRite was predicated on knowing my business and the marketplace and realizing that as an independent, there was no growth potential for the future,” he adds. “I decided to give up some of my independence and join this team that is the most adept in the industry. I can take my experience and know-how and use them to my benefit, the community’s benefit and my family’s benefit. I’ve been in the grocery business all my life, so it was easy to transition into that as opposed to something else.”
His expertise, as well as a spark indicative of co-op member owners, identified Cuellar and his wife Monica as suitable to become ShopRite owners, says Karen Meleta, director of communications for Wakefern Food Corp. based in Elizabeth, N.J. “Being an entrepreneur, having a passion for the business, are what define membership in Wakefern in general,” says Meleta. “Each member of the cooperative, each owner, brings his own experience to his store. ShopRite stores reflect their communities. The entrepreneur is living in the community that he is serving or is very close to it. This brings an understanding of what the consumer is looking for that a chain operating from a distance can’t do. The Cuellars have lived in the community, they have operated a store in the community, so clearly they have an advantage that we believe is going to help ensure their success.”
And most likely the success of other Hispanic business owners as well. In addition to leveraging the bargaining power of a giant cooperative to increase the size and scope of Hispanic products on his ShopRite shelves, Cuellar plans to dip more deeply into the services of the Hispanic business community. “I’m going to be bringing in a lot of local vendors that were not with ShopRite before — bringing them into a co-op of 200 stores that they get to sell to, as opposed to just one,” Cuellar explains. “I hope to also have an impact on some of the larger vendors who are already approved by the co-op ….This helps the community by allowing me to give them the right product mix, but it also helps the co-op in letting it be more aware of the sensitivities of certain ethnicities within the Hispanic market.”
Most importantly, adds Cuellar, by bringing on its first Hispanic co-op owner, Wakefern is acknowledging that the growth of the Hispanic market cannot be dismissed.
Is Cuellar’s success guaranteed? Not exactly. “August is the worst month in the grocery business, but it’s been pretty good so far,” he says, adding that competition is stiff in and around Passaic and bordering Clifton from a few Pathmark supermarkets, another ShopRite and several independent owners like President’s Supermarket. Cuellar knows both the success and failure inherent in entrepreneurship; he launched a small grocery-related marketing firm that he says became a casualty of the September 11, 2001, terrorist attacks and savvy competition. Win or lose, he says, the market is too robust not to try.
“If I weren’t in the supermarket realm, I probably would have looked at some different kind of franchising opportunity or even just straight business start-ups,” says Cuellar, adding that the growth of the Hispanic community is encouraging entrepreneurs to open up different businesses – provided they have “a stomach for risk. Being an entrepreneur is not easy,” he adds. “Your savings go away. You risk your home, you risk your family, you risk everything to do an entrepreneurial venture. You need to know what you’re getting into.”
Summer’s over. For Cuellar, now the real work begins.