Out of the aisle: a second generation Herran uses his golden touch with start-ups on the family's supermarket empire

South Florida CEO, July, 2005 by Jaime Hernandez

Marc Silverman, a Miami-based consultant who specializes in family business in Latin America, says Sedano's is a great example of how a family-run enterprise can pass the reins smoothly to the next generation. He says it is common for original owners to be reluctant to let their children run the operation. He also likes the conservatism Sedano's shows when considering an expansion.

"There's a size where [companies] just excel," Silverman says. "Under that they don't reach their potential and over that they're not able to sustain the quality. All successful companies have a core identity, a core purpose and core values."

Indeed, Sedano's has faced staunch competition from larger supermarket chains such as Publix, Winn-Dixie and Wal-Mart Stores Inc. Herran says Winn-Dixie is having a "hard time staying afloat" with its Chapter 11 bankruptcy reorganization, and other supermarkets such as Albertson's Inc. and Xtra Super Food Centers Inc. have tried to thrive in South Florida and failed.

"You just don't want to open up one store at a time," Tino Herran says. "That's very difficult. Albertson's tried it here and it didn't work out with them."

Publix recently opened one of its two new Sabor (Spanish for "flavor") supermarkets across from the Westland Mall in Hialeah. Sabor, which also exists in Orlando, carries a large variety of Hispanic products, along with featuring a Cuban-style cafe bar, Latin music on the store's loudspeakers, and a butcher that cuts meat to customers' preference, similar to small, Hispanic-style butcher shops. The store will eventually house a nail and beauty salon.

Tino Herran says Lakeland-based Publix was wise to open the store in heavily Hispanic Hialeah. However, he says he welcomes the competition and that Sedano's is not worried about losing market share to Sabor. He also questions how successful the store will be because many of Publix's non-Hispanic customers may be turned off by a store heavy on products they may not want.

"It takes them a little out of their core business. It's something very different for them," Herran says. "We've been here for a long time. We know our customer. It's a long learning process. It's not overnight."

Maria Brous, Publix's director of media and community relations, disagrees that Publix is a newcomer to the Hispanic grocery market.

"There have been some [Publix] stores that have been focused on Hispanic customers," says Brous, noting that Publix opened its first South Florida supermarket in 1959. "We just made a formal store with new name. We've learned a lot along way."

For now, Tino Herran says he is trying to find a suitable site for a Sedano's store in Miami Beach, which has a large Argentine population. He also may look to add more stores in Palm Beach County to compliment the one that opened two years ago in Lake Worth. As for expansion opportunities outside of Florida, Herran says Sedano's may eventually tap into the large Hispanic niche markets in New York, New Jersey, Texas and California.

"One of the successes we have is that a lot of our stores have a homey feel to them. People feel comfortable going in there," Herran says. "Sometimes big stores lose a little bit of that coziness to them."