Latino insights key to vast growth market

The buying power of Latino consumers in the United States is forecast to reach $1.5 trillion in 2015, up from $1 trillion in 2010.  One of the biggest reasons is a relatively fast rate of population growth. Between 2000 and 2011, Hispanics accounted for 50% of U.S. population growth—14.7 million vs. 14.5 million among non-Hispanics.  But between 2011 and 2016, Hispanics will comprise 60% of growth—7.4 million vs. 5.0 million.

These insights are in a new Nielsen report, State of the Hispanic Consumer: The Hispanic Market Imperative, which explores multiple aspects of this population. In particular, food retailers could more effectively serve this growth market if they understand the sustainability of Hispanic culture.  Nielsen says, “Hispanic culture may evolve but will not go away.”  It points to borderless social networking, the unprecedented exchange of goods, the use of technology as a facilitator of cultural exchange, retro acculturation and new culture generation as reasons why.

The buying power of Latino consumers in the United States is forecast to reach $1.5 trillion in 2015, up from $1 trillion in 2010.  One of the biggest reasons is a relatively fast rate of population growth. Between 2000 and 2011, Hispanics accounted for 50% of U.S. population growth—14.7 million vs. 14.5 million among non-Hispanics.  But between 2011 and 2016, Hispanics will comprise 60% of growth—7.4 million vs. 5.0 million.

These insights are in a new Nielsen report, State of the Hispanic Consumer: The Hispanic Market Imperative, which explores multiple aspects of this population. In particular, food retailers could more effectively serve this growth market if they understand the sustainability of Hispanic culture.  Nielsen says, “Hispanic culture may evolve but will not go away.”  It points to borderless social networking, the unprecedented exchange of goods, the use of technology as a facilitator of cultural exchange, retro acculturation and new culture generation as reasons why.

Nielsen concludes that “Hispanics are the largest immigrant group to exhibit significant culture sustainability, and are not disappearing into the American melting pot….It has become increasingly important to challenge commonly held misconceptions about the Latino market that undermine the importance of its size, uniqueness, and value.”

Rapid Latino population growth will persist, even if immigration is completely halted, says Nielsen.  It cited long-range U.S. Census Bureau forecasts for Hispanic growth of 167% between 2010 and 2050 vs. 42% for the U.S. population overall.

The Latino population is young compared with a graying U.S. population—60% of the group is under age 35, and 75% is under age 45—making the group key to new consumption.  The current median Latino age is 28 vs. 37 in the total market population. An IBISWorld study says grocery and restaurants will especially benefit from this favorable demographic.

Food retailers that know the distinctive ways Hispanics consume products and use media and technology could appeal to them more.  For example:
•    Hispanics make fewer shopping trips per household than non-Hispanics and spend more per trip.  Hispanic Spanish-preferred households make 143 trips per year (all retail channels) vs. 142 for Hispanic English-preferred households and 149 for non-Hispanic white households, according to Nielsen Homescan, data for the total U.S., 52 weeks ended December 25, 2011.
•    Hispanic baskets are bigger—$52 per trip for Hispanic Spanish-preferred households vs. $51 for Hispanic English-preferred households and $47 for  non-Hispanic white households, Homescan reported.
•    Hispanics spend 68% more time watching video on the Internet and 20% more time watching video on mobile phones than non-Hispanic whites.
•    Hispanics are 28% likelier to own a smartphone than non-Hispanic whites.  But they are less likely to access the Internet at home—62% vs. a 76% U.S. average.

The Top 10 product categories in which Hispanics index high, where the average U.S. household use is 100, are:  dried vegetables and grains (221), hair care (154), shortening oil (152), baby food (150), women’s fragrances (149), grooming aids (144), disposable diapers (144), family planning (142), photographic supplies (142) and baby needs (137), according to Homescan data for the January 2 to December 31, 2011 period.