The Hispanic food and beverage market is “expected to embark on a more aggressive growth pattern from now through 2017” as firms pump more dollars into innovation and marketing, predicts market researcher Packaged Facts.
The firm, which estimates that the US market for Hispanic foods and beverages was almost $8.2bn* in 2012 (up 3% on 2011), projects that it could be a $10.7bn market in 2017, up 31% from today.
Consumers are becoming more adventurous with less well-known Hispanic flavors and textures
But where is the growth coming from?
Across the board, says Packaged Facts, with mainstream players such as General Mills, Kraft, Walmart, Kellogg, Heinz and others all increasing product development in this area and upping their marketing dollars, while more niche brands are also growing fast.
Critically, the scope of the market is far larger than Hispanic consumers, says the market researcher, which notes that Hispanic foods and beverages appeal to a wide variety of consumers, including Spanish-only speakers, bilingual consumers, English-only Hispanics and Americans at large, “who have become prime consumers of Hispanic foods and beverages.
“Mainstream consumers are becoming more adventurous with less well-known Hispanic flavors and textures, thanks to the influence of Hispanics and the popularity of foodie culture. Marketers such as Ruiz Foods and Goya have noted this more sophisticated taste and are adjusting their product mixes accordingly.
“Mainstream marketers are adding new Latino inspired flavors to existing product lines, or rolling out entirely new Hispanic food lines, such as what McCormick is doing with its line of authentic Hispanic rice mixes.”
Other firms have developed recipes with a foodie flair such as Chef Rick Bayless’ line of skillet sauces (Key Lime Cilantro Taco), while others have imported novel products such as new items in Mucho Sabor’s snack line or cheeses from Cacique, adds Packaged Facts.
Hispanic brands are growing at faster rates than the categories as a whole
Hispanic brands now make up 17-18% of the frozen hand-held entrees (non-breakfast) category, it notes, while the growth of Hispanic or Hispanic-inspired brands typically outpaces category growth in any given market.
“Hispanic brands are growing at faster rates than the categories as a whole… Mainstream marketers are trying to keep up, with everyone from Hot Pockets to Amy’s creating their own Mexican flavors to help meet demand.
“Two subcategories whose growth exceeded the category overall include Refried beans, up 2.7% and the All Other Mexican Sauce/Marinade category, with sales up 3.3% [SymphonyIRI, food, drug and mass (excluding Walmart),52 weeks to Oct 7, 2012].”
Meanwhile, tortillas now outsell many American staples, including spaghetti/macaroni/pasta, hamburgers and hot dog buns, all other fresh rolls/buns/croissants, and bagels/bialys, while salsa has almost twice the sales of ketchup and more than twice the sales of mustard, says Packaged Facts.
“Certain product categories can be considered more mainstream, while others are decidedly more likely to be used by Hispanic households.
“Mainstream products include burritos, refried beans, salsa, flour tortillas, and various taco products. Meanwhile, Hispanics index heavily for tostada shells, tamales, enchiladas, corn tortillas, pimentos, jalapeno peppers, and green chilies.”
Hispanics more likely to try new products and interact with brands
There are currently around 52 million Hispanics in the US, representing 16.7% of the population. However, this figure is expected to rise to almost 133 million by 2050, when Hispanics will constitute 30% of the population.
The median age of Hispanics is 10 years younger than that of the overall US population, while Experian Simmons Retail Shopper Segmentation data also shows that Hispanics are 82% more likely than average to be categorized in the ‘Mall Maniacs’ segment, which means they find shopping enjoyable, and like to try new products and interact with brands, says Packaged Facts.
“As mainstream as Hispanic products have become, Hispanics are still key consumers… Considering the tremendous—and burgeoning—buying power of Latinos, this is a demographic that marketers cannot afford to ignore even while introducing products that appeal to a wider audience.”
For more information about Packaged Facts’ new report, Hispanic Foods and Beverages in the U.S., 5th Edition, click here.
*The figures exclude tortilla chips, chili, chili sauce and alcoholic beverages.