Minority vendors dip int= o giant markets

Photo by Liz Flores, Star Tribune

Majdi Wadi�s Holy Land supplies Supervalu Inc. stores, including Cub Foods, with hummus. He is expanding output through automation. His bakery in northeast Minneapolis ships bread as far as Southeast Asia. <= o:p>

Minority = suppliers are becoming a major goal of many big companies. Supervalu and Holy Land sh= ow how it works.

By H.J. Cummins, Star Tribune

Last up= date: June 24, 2007 – 7:09 PM

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Majdi W= adi is going places -- fast.

Holy Land, his restaurant, grocery store, and bakery in northeast Minneapolis, already is selling its hummus, tabouli and bread in grocery stores throughout the Twin Cities and = even exporting its Middle Eastern bread to the Far East.

Now Wadi, through a growi= ng partnership with Supervalu, will expand from the Twin Cities' Cub stores to close to 80 more across four states. That expansion will double his wholesa= le business to about $4 million, Wadi estimates.

"Everyone's dream is= to deal with the big companies," said Wadi, a native Palestinian. <= /span>

For him, the Supervalu relationship has been particularly fruitful. It started small three years a= go when the Eden Prairie-based grocery store chain, now the third-largest food retailer in the country, put Holy Land in its Midway Cub store in St. Paul.=

The entree was Supervalu's supplier diversity program.

It's a concept employed b= y many giant companies designed to bring small, minority-owned suppliers into their typically larger-scale lineups. For the giants, the local vendors help clue them to the many tastes of their increasingly diverse clientele. For the li= ttle ones who get tapped, it's a dream shot at the big time. <= /p>

There are risks on both s= ides. Big companies can get fooled by entrepreneurs using a minority front person. For small companies, it's a gamble to hitch their growth prospects to the w= hims of a large corporation.

The Franklin Street Baker= y found that out seven years ago, when Caribou Coffee canceled a three-year contract halfway through, leading to the loss of 17 jobs and enough income to threat= en its existence.

As in all relationships, diversity programs work when both sides get their needs met. Supervalu's or= ders help support Wadi's need to grow, he said, as he faces competition from som= e of the biggest food companies stepping into his specialties.

"And on the other si= de of the coin," said this clear-eyed businessman, "our product makes m= oney for them."

Expanding programs

Supervalu aims to roughly= triple its spending with minority vendors, to about 10 percent in three years, according to Mike Byron, corporate director of supplier diversity. Those vendors include not just suppliers, such as Holy Land, but also business services such as accounting, landscaping, and building maintenance, Byron s= aid. The arrangements also put money back into the communities that are, after a= ll, their prospective customers, Byron said.

"There's a lot of lo= cal relevancy to these products," he said.

Wells Fargo considers div= ersity suppliers a "business imperative," said James Terrell in Minneapo= lis, vice president of diversity sourcing and procurement of the banking company= . In two of the company's biggest states -- California and Texas -- the combined minority populations are now the majority, Terrell said. =

Wells Fargo aims to doubl= e its diversity spending -- $500 million last year -- by 2010. =

To find diverse suppliers= , both companies turn to the National Minority Supplier Development Council, which vets claims of minority ownership.

About one in five don't p= ass, according to Alvin-o Williams, president of the Minnesota council, which is part of the national network. Among the disqualifiers: The business isn't really minority owned, or the owner isn't a U.S. citizen.

The Minnesota council now= has a list of about 300 certified minority business enterprises, Williams said. <= o:p>

A new hummus factory

Holy Land fills a low, br= ick building on Minneapolis' Central Avenue, where Latin American, Somali, Arab= and East Indian immigrants are bringing diversity to the traditionally Polish n= eighborhood.

A bright red sign over th= e door says "Holy Land" in English and Arabic. But Wadi will soon replac= e it with one that's a little longer, to honor his now-retired mother: "Holy Land Deli -- The Original Home of Mama Fatima's Recipes." <= /span>

The Wadi family recipes, = brought to America, distinguished the restaurant when Wadi's mother and brother ope= ned it 20 years ago in northeast Minneapolis.

Wadi, the CEO, is one of = four brothers in the family business, which now has 95 employees and about $8 million in sales.

The wholesale business ha= s been a growth area. Besides Cub stores, Holy Land products are also available in Kowalski's Markets, Whole Foods stores and food co-ops throughout the Twin Cities.

Last year Holy Land began exporting its bread to Singapore and on from there to Cambodia and Vietnam.=

Now the company is in the= midst of a $3 million expansion project that includes converting part of an old b= ar next door to a bigger, automated hummus factory that will produce in one ho= ur the 1,500 containers his crews now manage in an entire day.

The restaurant also will = move to that newly acquired building, and its old spot will become part of an expan= ded grocery. No longer concentrating on ethnic foods, Wadi hopes to make this t= he neighborhood's full-service supermarket.

The bread bakery will mov= e from a Minneapolis site and expand into another newly acquired building just down Central Avenue.

From the beginning, Cub's encouragement has meant a lot, he said. The practicalities of connecting Ho= ly Land to Supervalu's computer services took a lot of telephone tutorials, for example.

"It was the first ti= me I felt someone was insisting to have my product, and they went the extra mile," he said.

Getting bigger is a calcu= lated gamble Wadi feels he has to take, as a small businessman and a first-genera= tion immigrant building a family company.

"Maybe if our childr= en come to the business one day, it won't be true for them," he said, "but for us, it's maybe our destiny to stay worried."

H.J. Cumm= ins • 612-673-4671 • hc= ummins@startribune.com