The Multifaceted Face of Hispanics
According to “Hispanic Food Shoppers in the U.S.,” a June 2014 report from the Packaged Facts division of Rockville, Md.-based MarketResearch.com, spending by U.S. Hispanic consumers for food at grocery and other food stores has grown more than 80 percent over the past decade. Packaged Facts estimates that by 2018, these shoppers will spend approximately $86 billion on food. Therefore, Hispanics will continue to be an important consumer group for retailers to understand.
However, they cannot be treated as a homogenous group. For instance, shopping behaviors, including where and how often they shop and what they buy, depend on whether the Hispanic consumer is U.S.-or foreign-born and his or her nationality.
Focused on fresh foods and family
As a group, Hispanics do have some similarities. For example, across all retail channels, they tend to shop less often and spend more per trip, states Eva Gonzalez, executive director, diverse consumer insights and multicultural marketing for Nielsen, New York. And they tend to spend more on categories that demonstrate their preference for cooking from scratch, including vegetables, grains, oils, eggs, flour, spices and seasonings.
Because of this emphasis on cooking, 42 percent of Latinos agree that the kitchen is the most important room in their home, and 53 percent view the kitchen as the centerpiece of their home life, Packaged Facts states. Additionally, Latinos are 54 percent more likely to spend 20 minutes or more preparing lunch during the week and 45 percent more likely to spend 20 minutes or more preparing lunch on the weekends.
Hispanics often live in large households with more children, and their shopping habits reflect this reality. They have a strong purchasing presence in categories such as disposable diapers, baby food, laundry products and sanitary protection, Gonzalez says.
And more than half of Hispanic food shoppers take their children with them to the store, Packaged Facts states. So stores that present themselves as an enjoyable and even fun place for families to shop could gain a competitive edge with Hispanic food shoppers.
Relatives’ opinions heavily influence Latino purchasing decisions, too, Gonzalez says. Research conducted by Nielsen found that 90 percent of Hispanics consider the recommendation of a family member or friend as a primary influence in their purchasing decisions.
Another commonality among Hispanics is that while 90 percent of them prepare a shopping list before making a trip to the grocery store, those lists tend to be shorter and less detailed than the lists compiled by other shoppers, Packaged Facts states. Latino shoppers, therefore, are more likely to “improvise and make up their minds on the go in the supermarket,” leaving them more open to impulse purchases and in-store merchandising.
Divided by birth
One difference among Latinos that greatly affects their shopping habits is their country of birth. U.S.-born Latinos make up the largest segment of the Latino population in the United States, at 64 percent, Gonzalez says, citing U.S. census data. As a group, they are younger than their foreign-born counterparts; 75 percent are under the age of 35, while the average age is 18. In contrast, foreign-born Hispanics have an average age of 40. Additionally, U.S.-born Hispanics tend to be higher-educated, have smaller households and earn more money.
While Hispanics as a group tend to purchase fresh foods, with the increase of U.S.-born Hispanics, purchases of processed foods and packaged goods in the center store is expected to increase at an even faster rate, Packaged Facts states. After analyzing food buying trends, Packaged Facts found that during the past decade, Latinos’ food buying habits began to mirror those of the American consumer as a whole.
In “Charting a course for understanding the multi-cultural Latino consumer,” the Hartman Group, Bellevue, Wash., found similar results in 2013 when it surveyed a variety of Latino consumers in the United States. The company asked respondents which foods they had purchased in the past three months in categories such as snacks and sweets, frozen foods, dry packaged goods, canned foods and packaged meats. It found that those respondents who had been born in the United States and primarily spoke English at home gave responses that most resembled non-Latinos. However, those who were foreign-born and spoke more Spanish than English at home were much less likely to say they had purchased packaged food products.
Another difference between U.S.- and foreign-born Hispanics can be found in shopping frequency. U.S.-born Hispanics tend to shop more frequently and spend more per year than foreign-born Hispanics, Gonzalez states, because they tend to have higher incomes. Although foreign-born Hispanics spend less annually and make fewer trips, they spend more per trip. This behavior indicates that foreign-born Hispanics place a great emphasis on value; retailers need to better understand this group, as they see them less often in the store.
A multinational group
Another difference that affects Latino purchases is nationality. For example, while Hispanics as a whole are avid shoppers of the bakery, Cubans and Puerto Ricans index much higher for cakes, sweet rolls, strudels and even ice cream cakes than other Hispanics, Gonzalez says. While Hispanics tend to love bananas, Mexicans prefer Cavendish bananas, but Central Americans and Caribbean Hispanics prefer plantains. And while the tortilla is a staple for Mexicans and Central Americans, it is not as popular for Hispanics hailing from South America.
Nationality also plays a role in the effectiveness of Spanish-language labeling. For example, Puerto Ricans and South Americans are the least likely to say that Spanish-language labeling will help them while in the store, while Cubans and Central Americans are most likely to say it will help, Packaged Facts states.
Private label positives
In Latin America and other Hispanic countries, private label products are not as popular as they are in North America and Western Europe. But Hispanics living in the United States are adopting store brands and even over-index on store brand usage in comparison to other U.S. ethnic groups, Gonzalez says. In fact, more than a third of U.S. Hispanics think private label products are a good alternative to brand name items.
“According to Nielsen studies, Hispanics display the most positive attitudes toward store brands among U.S. ethnic groups,” Gonzalez adds, “representing a high-growth, high-potential private label segment. Retailers have a substantial opportunity to increase the penetration of their store brands among Hispanics and other ethnic groups.”
To attract Hispanics to store brand products, the Hartman Group recommends that retailers keep in mind that Latino means more than just someone with Mexican roots. Therefore, they should stock products that will appeal to consumers from a variety of countries, including dry beans, dry rice, etc., at a low price. Additionally, when creating products that are meant to appeal to Hispanics, retailers should focus on flavor profiles that are significant in a variety of countries, including mango, avocado and coconut. And they could also consider dedicating a small part of the store to Latino products.