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SIAL Canada - The US Hispanic Market – Tapping into the fastest growing consumer segment in the US

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Speaker:
Gabriela Alcantara-Diaz, Association of Hispanic Advertising Agencies (AHAA)

Gabriela Alcantara-Diaz kicked off today's seminar with a comprehensive overview of the importance of the Hispanic market in the United States (U.S.). Her presentation emphasized the growing population of Hispanics in the U.S. in addition to new spending practices and changes in the Hispanic consumer market.

The Hispanic population has greatly risen over the past decade. According to the U.S. Census, one in six Americans is of Hispanic descent. Hispanics have accounted for close to half of the population growth the U.S. has seen in the past decade, and now represent 16.3% of the total U.S. population. Gabriela emphasizes that the states in the South and West experienced the largest population growth for Hispanics, with California, Texas and Florida ranking as the states with the largest Hispanic populations. The Hispanic population is also expanding in the suburbs. Currently, more than one third of the 13.3 million new suburbanites in the U.S. are Hispanic.

Not only has the population of Hispanics been growing, but this consumer segment has also experienced a rise in purchasing power, and marketing to the evolving U.S. Hispanic market can drive category penetration and share of wallet. Hispanics are driving growth in several, otherwise stagnant product categories in the U.S., particularly crackers, candy, fish and beef. Canadian exporters of these products will find a particularly lucrative consumer market in the U.S. Not only are Hispanics fuelling product demand, but they are also allocating more of their money towards food. It is estimated that Hispanic consumers spend 15.3% of their wallet on food compared to non-Hispanic whites who allocate 12.5% of their spending to food. Increased spending on food will likely continue to drive growth for the products highlighted above, as well as for new and diverse products that cater to the needs of the Hispanic market in the U.S.

Gabriela stressed the diversity and evolution of the Hispanic household, which creates demand for a wide variety of products. For example, more Latinas are entering the workforce, with 32% employed in sales and office occupation. They represent a growing segment of “time-strained dual earners”, where both parents work and have little time to prepare food. This trend provides increased demand for frozen and pre-packaged foods that decrease the time spent on preparing meals. Hispanic consumers are also more likely to purchase private brand products. It is estimated that this consumer group spends approximately $86 per week on private label products, with dairy, paper and carbonated beverages ranking as the top three most frequented categories. Finally, many Hispanic consumers have become well aware of their health and wellness needs, and have begun demanding more nutritional food for themselves and their children. Consumers are increasingly concerned about the impact the modern U.S. diet will have on their children, which will drive Hispanic demand for ethnic organic and all-natural Latin food.

The presentation also explored best practices to appeal to a growing native-born, convenience-driven, Latino consumer. Gabriela made a great point that Canadians who wish to export to this market should ensure that they integrate the Latino identity into branding practices. Both foreign and native-born Hispanics should be targeted through culturally specific branding, making consumers much more receptive to the product, as it caters to their particular tastes. Another way to draw the attention of this lucrative consumer base is to conduct extensive research on particular Hispanic markets in the U.S., as the national Hispanic market is somewhat segmented, and can vary greatly depending on country of origin, background and region. Companies should also be aware of the relevance of the product to each consumer segment, how competitive a product will be in the ethnic food market, as well as the shopping patterns and retailer preferences of each group. Another effective way of marketing to Hispanic consumers is to facilitate communication through meaningful cultural nuances and native language skew. Gabriela also suggests that educating the market about potential products is very important in building a Hispanic consumer base. This can be done through broadcast and digital media, local-community involvement and relationships with local Hispanic and ethnic retailers, amongst others. By employing cultural branding best practices, Canadian exporters can aid their products in gaining a competitive advantage in the U.S. Hispanic market.

If you have any further questions regarding the information shared during this presentation, please contact:

Gabriela Alcantara-Diaz
G ADMarketing Communications, Inc.
Office – 786.464.9237
Mobile – 305.297.0016
gaby@gadmarketingcomm.com

Until next time…

Cheryl Hogan
Project Officer, ATS
cheryl.hogan@agr.gc.ca

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