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99 and Counting

Roger Chen's chain of Ranch Markets is growing by leaps and bounds, thanks to his cross-cultural strategy of offering traditional Asian foods in a Western-style setting


Tawa Supermarkets, whose flagship 99 Ranch Markets is a favorite of Asian consumers throughout Southern California, got its start because a Taiwanese immigrant named Roger Chen missed the flavors of home.

Chen, who moved to Orange County with his family in 1983, found himself driving to Chinatown each weekend to buy Tong I cookies, his favorite brand of soy sauce and the green vegetable tong ho (a must for Chinese hot pot).

On those long drives from Fountain Valley, Chen got an idea: Why not build a supermarket that caters to the specific desires of Asian consumers as well as provides the toothpaste, onions and other staples that everybody buys anyway.

As tens of thousands of Asian immigrants poured into Southern California in the 1980s, Chen's idea hit big. Today, there are 16 of the 99 Price and 99 Ranch supermarkets in the United States and Canada that ring up $150 million in annual sales, and 99 Ranch has become the biggest player in California's growing Asian supermarket industry. Most of the Tawa supermarkets are in Southern California.

The company has more than 1,200 employees, averages 10% to 15% growth each year and has expanded into licensing the 99 Ranch name.

"We were trying to upgrade and improve the image of Chinese grocery stores by using Western skills to sell Asian products," recalls Chen, 45, the chairman and chief executive of privately held Tawa, which is based in Buena Park. The company also builds its own retail centers with other partners.

One of the best-known of these shopping centers is San Gabriel Shopping Plaza on Valley Boulevard in San Gabriel, which Chen developed as a joint venture with four partners.


Designed in an attractive, earth-tone, faux-Spanish-mission architecture style, the 250,000-square-foot, two-story shopping center is anchored by a gleaming 99 Ranch Market, where patrons can buy everything from fresh whole lobsters to $400 bottles of aged French cognac.

The plaza also features a department store, jewelry stores, insurance offices, clothing boutiques, bakeries, hair salons and scads of Chinese restaurants for every palate, from Hunan to Peking, including one that dishes up exclusively Islamic Chinese cuisine.

Some businesses even follow the 99 Ranch Market to new locations to piggyback on its vast clientele. One businessman who has followed some 99 Ranch Markets is Victor Kuo, who owns a chain of cosmetics stores called Vitativ, which stocks such products as Clinique, Christian Dior and Shiseido but caters almost exclusively to Asian customers who prefer not to shop at mainstream department stores because of language barriers.

"99 Ranch is very upscale. They have a niche market for Asian customers and more drawing power than other shopping centers," says Kuo, who has placed six of his 10 Vitativ boutiques in 99 Ranch shopping centers. "The rent is a bit more expensive there, but it's worth it. Our business has grown since moving into their centers."

Mainstream chains have responded to the new Asian supermarkets by stocking their own shelves with products such as daikon radish, ground pork and fish sauces to lure Asian customers, says Edie Clark, a spokeswoman for the Food Marketing Institute, a trade association for the supermarket industry based in Washington, D.C.

Mainstream supermarkets are also adding prepared Asian foods for takeout, she says. Overall, sales of Asian food products grew 17% nationally in 1996 to more than $68 million.

But Chen also faces competition from ethnic supermarket chains such as Yaohan, which caters to Japanese Americans, and Hong Kong Markets, whose three outlets offer slightly lower prices and attract Cantonese-speaking Chinese from Hong Kong.

By contrast, 99 Ranch Markets has a loyal Mandarin following from Taiwan. It also has a reputation for slightly higher prices, and some customers say the produce is fresher.

"My wife shops at both 99 Ranch and Hong Kong. From week to week they all have specials, but overall Hong Kong is a little lower," says Christopher Leu, president and chief executive of United Pacific Bank in Los Angeles, whose clients include 99 Ranch and several other Asian supermarket chains.


However, "when you go into a 99 Ranch Market, you feel there's more turnover, so people think the food is fresher."

Leu says that Yaohan, based in Japan, is the largest such chain in the United States but that Tawa is the largest in California.

"The market has been pretty much cornered by Roger's group; he was the first to get the Asian supermarkets independently organized and run more professionally, like Vons," Leu says.

One recent day, customers browsing through the aisles explained why they'll pay more for food at 99 Ranch.

"Why do I shop here? Because the fish is still wiggling," says Ontario resident Calvin Tong, 36, a bus driver originally from Hong Kong, pointing to the packs of fresh fish piled in his cart.

Nantawan Chee, 22, a Thai who studies marketing at Azusa Pacific University, agrees.

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