(March 14, 12:18 p.m.) HOUSTON — The success of H.E. Butt Grocery Co. is due, in large part, to its focus on the needs of individual neighborhoods, an HEB executive told members of the Houston Fresh Fruit and Vegetable Association.

“Every H-E-B store is different by design,” said James Harris, director of supplier diversity for the San Antonio-based chain, at the association’s March 12 meeting. “There’s a plan behind that.”

H.E. Butt has more than 300 stores in Texas and Mexico, and with about $13.5 billion in sales in 2007, it was the 9th largest retailer in the country, Harris said. It is the largest privately held grocery chain.

The company uses its various platforms — H-E-B, H-E-B Plus, Central Market and Mi Tienda — to draw on the diverse population in Texas, Harris said. As director of supplier diversity, Harris ensures each department makes it a priority to buy from minority-owned businesses.

This practice is not solely based on altruistic notations, Harris said.

“It has to be financially based,” he said.

Harris pointed to the large ethnic population in Texas as an example. Texas ranks in the top four in ethnic population buying power for Asian, African-American, Hispanic and Native American populations, with a potential buying power of $286 billion.

To help buyers get in touch with more minority suppliers, H.E. Butt added a feature to its Web site for registration and verification of minority-owned suppliers. It takes about 20 minutes for suppliers to register, Harris said.

Once they are in the system, buyers can sort the potential suppliers they choose to work with based on whether they are minority-owned or minority-supplied, in addition to the standard categories.

“This helps them do more business with minority suppliers where it makes sense,” Harris said.


H.E. Butt is also expanding its farmers market programs, which it started in one of its San Antonio stores.

The company offered to host its local suppliers in front of the store to sell seasonal produce in a farmers market-type atmosphere. Each grower was allowed to set up their own booth and sell produce at their own prices and keep all of the proceeds.

The program was a success, Harris said, because it drew more traffic to the stores that participated.

“It allowed us to build a relationship with customers outside of the store,” he said. “We’re going to be doing more of these projects.”