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They’re 57 million strong and have $1.3 trillion in annual buying power. Their food and flavor interests span the spectrum, from authentic homestyle cuisine to Asian flavors to craft beer. But when it comes to making a purchase, Hispanics in America often have checkboxes that must be met — how are your products appealing to this segment? Let’s take a look at Hispanic consumers and their impact and interest in food and beverage.

Hispanic Consumers: Not One-Size-Fits-All

Currently, the Hispanic is counted as 57 million (18% of the total U.S. population) but it is set to add another 62 million by 2060 according to Nielsen data. As of 2015, this segment controlled $1.3 trillion in annual buying power, an amount larger than the GDP of Australia or Spain. These numbers are only going to grow with Mintel predicting spending power to climb to $1.7 trillion by 2019. And on top of that, food and meal time are extremely important cultural factors, so these Americans are certainly a demographic to consider when developing new food and drink products, marketing restaurants and stocking grocery stores.

First things first: What do we mean when we say Hispanic?

General confusion over the term “Hispanic” paired with the country’s proximity to Mexico can make it easy for Americans to think “Hispanic” directly translates to “Mexican.” But this isn't the case.

The term Hispanic refers specifically to Spanish-speaking nationalities. The term is often confused with “Latino,” which refers to Latin America. Generally, “Hispanic” includes Spain, but excludes Brazil, since they speak Portuguese. Latino, on the other hand, includes Brazil, but excludes Spain because it's not in Latin America.

In this report, we use the term “Hispanic” to refer to consumers from Spanish-speaking countries in North, Central and South America, therefore excluding both Spain and Brazil.

Click here for the full report! 

Hispanic: More than Mexican

Know your customers! When product developers think of the Hispanic market, it’s important to realize it isn’t composed of one single group. There are more than 20 Hispanic countries, each with individual cultures, customs and cuisines.

Luis Lacal, general manager of Bakery Corp. in Miami explains how this affects his business: “In terms of the Hispanic population in South Florida, we don’t have the same situation as California or Texas with Mexicans, where there’s one particular ethnicity. In South Florida, you have (nearly two dozen) different nationalities, so any product you want to bring to the market doesn’t go to just one.”

One-size-fits-all products and flavors don't speak to Hispanic consumers. Non-Hispanics may not notice the tremendously broad brush being painted with, but Hispanics certainly do. Authenticity to regional flavors is extremely important when hoping to reach Hispanics, especially Millennials who represent almost 30% of the US Hispanic market. They have strong interests in foods with cultural ties. (More on this next.)

• “In every single country from Guatemala, Costa Rica, El Salvador, Honduras, even though they use and eat tortillas, each one of them have a different kind of tortilla than Mexico.” —Luis Lacal, general manager, Bakery Corp., Miami


• 48% of all Millennials have eaten Central or South American foods, including arroz con pollo and pupusas, in the past three months. —Mintel's Defining Ethnic Food report

Key Purchase Drivers

1.Cultural Connection & Authenticity

Food is one of the key ways Hispanics celebrate and share their culture with their family and friends. No matter their age or first language, Hispanics have a strong emotional and cultural tie to food, both recipes/ingredients and brands.

One of the biggest influences on Hispanic snack purchases and preferences is their heritage, culture and upbringing. One way Hispanics find this connection in the United States is my shopping at grocery stores specializing in products from home. 57% of all Hispanics in the U.S. say they’re drawn to Hispanic grocers because they typically offer the products and brands that reflect their cultural tastes. 61% of U.S. Hispanic Millennials have shopped at a Hispanic supermarket once in the past year, and even though they may have more options than older generations. About 54% say they are drawn because of culture.

• 51% of Hispanic Millennials who shop at Hispanic grocery stores visit a panadería (Hispanic bakery) or tortilla shop.

Beer 

The category of beer is a great example of this cultural brand loyalty. Hispanic consumers spend a larger share of their money on beer than other multicultural consumers. In fact, according to Nielsen, “44% of Hispanic adults claim to have consumed a beer within the last 30 days, slightly above the U.S. average overall.” But a large portion of these beer dollars are going toward imported beers, many of them Mexican. Of the top 10 growing brands among Hispanics, half are Mexican imports.

“Connecting with their roots attracts Hispanic consumers to beers they very well may have consumed in their native countries,” says Eric Penicka of Euromonitor. He continues: “While roughly 65% of Hispanics in the U.S. are of Mexican descent, Hispanics from neighboring areas in Central America with cultural similarities have also found familiarity with Mexican beer brands and gravitated towards them.”

Constellation Brands attributes its 74% sales growth to its beer category, which consists almost entirely of Mexican imports. In fact, Euromonitor reports that Mexican beers are driving the growth of the entire imported premium lager category.

Craft beer is a rising category with a strong flavor profile that should be a hit with Hispanics, says Gerry Loredo of Lopez Negrete Communications. But it has actually lost share with Hispanics over recent years, with only 18% identifying as weekly craft beer drinkers. Loredo says this is because brewers court Hispanics around Cinco de Mayo, but ignore them the rest of the year. A traditional lack of advertising also hurts. Even if a  and those breweries that do advertise don’t often consider doing Spanish-language ads.

4.Family

SOURCES

Food Business News, Food Dive, Nielsen, Meat & Poultry/Nielsen, The Hartman Group, Mintel, VRTC, San Diego Union Tribune, Brewers Association, USA Today, NPD Group, Euromonitor, Justin Kendall, micfood.com, www.nbc29.com, Institute of Latino Studies, University of Notre Dame,