The growing demand for free-from foods offers Hispanic food, beverage new growth avenue

By Elizabeth Crawford contact

- Last updated on GMT

Source: iStock
Source: iStock

Related tags: Hispanic and latino americans

The Hispanic food and beverage market in the US is growing steadily along with the Latino-American population, but manufacturers can speed its growth and expand the appeal of their products beyond this core group by tapping into the popular free-from food movement, according to new research from Packaged Facts.

In a report published this Fall​, Packaged Fact estimates the Hispanic food and beverage market in the US was worth $17.5 billion in 2015 – up 3.9% from the prior year with a compound annual growth rate of 3.6%. It predicts this growth will speed slightly in the next five years with a CAGR of 3.8%, which will help drive up sales to $21.1 million by 2020. 

In many ways, this growth reflects the expansion in the US of Hispanic-Americans, according to Packaged Facts.

“As of 2015, Hispanics represented close to 18% of the population. The Census project that by 2025, the Hispanic population will represent over 20% of the total population and by 2050 Hispanic Americans will account for one in every four persons in the US,”​ the report explains.

This group remains the core shopper of Hispanic foods with nine out of ten Hispanic households enjoying traditional Hispanic foods and three-quarters especially devoted to them, according to the report. In addition, it found more than half of Latino Americans buy more Hispanic foods than they do traditional American foods.

While Latino Americans over-index for buying Hispanic foods, Packaged Facts notes that at least a third, and as much as half, of the mainstream US population and are a familiar presence for about another third.

“The remaining block of consumers, 20% to 30%, has either not shown an interest in stepping outside of their comfort zone when it comes to trying new foods or have outright rejected the tastes and textures associated with Hispanic foods,”​ the report notes.

Free-from food movement opens door for Hispanic foods

Manufacturers and retailers can further expand the appeal of Hispanic foods to mainstream shoppers – and maybe even to the hold-outs – by integrating their products with other macro trends influencing US shoppers, such as the growing demand for free-from foods, Packaged Facts recommends.

For example, it explains that many Hispanic foods are a “natural fit”​ for shoppers seeking gluten-free foods or substitutes for wheat because on-trend ancient grains such as amaranth and quinoa are native to Latin America. Likewise, corn is a gluten-free staple in many Hispanic foods.

“The tortilla category lends itself easily to the use of ancient grains,”​ as does the tortilla chip category, which often features products marketed as gluten free, the report notes, pointing to La Tortilla Factory’s gluten-free wraps, Siete almond flour and cassava & coconut tortillas and Mission’s gluten and wheat free tortillas.

Beyond gluten-free, Packaged Facts found more manufacturers of Hispanic foods and beverages are joining the free-from movement by offering products that are promoted for the absence of artificial ingredients, allergens and GMOs.

Other trends driving growth of Hispanic foods

Manufacturers also can drive penetration and sales of Hispanic foods and beverages by offering shoppers who have already embraced their products new taste experiences and increasingly authentic offerings.

For example, “spicier versions are increasingly welcome by consumers eager for new taste experiences,”​ according to Packaged Facts.

“A desire for a hot, spicy eating experience is the leading reason that consumers are drawn to Hispanic foods. Another top reason is a desire for something different, something international. Also registering with significant portion of the population is a desire for authenticity in Hispanic foods,”​ it notes.

Manufacturers are rising to meet this demand by offering more than just the traditional classifications of mild, medium and hot, according to Packaged Facts. It explains they now offer “various degrees of sweetness and/or heat and also adapting to new flavor trends from the mainstream such as pumpkin.”

On the opposite front, manufacturers can expand the appeal of Hispanic foods by fusing them with other cultural flavor profiles and styles, such as with European and Asian cuisines, the report suggests.

Finally, manufacturers might be able to break through to some of the hold-outs in the US who refuse to eat Hispanic foods and beverages by offering milder, more mainstream versions of the products, according to Packaged Facts. 

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