Accounting for one-sixth of the U.S. population, Hispanic consumers have increased spending by more than 200% since 2000, with buying power expected to exceed $1.7 trillion by 2017. For a packaged food company with $1 billion in sales, effective marketing to this shopper segment may earn an additional $71 million in incremental revenue, according to a new report from Information Resources, Inc. (I.R.I.).
“Aligning a service and market offering with the needs of Hispanic shoppers is rapidly becoming a critical success factor for sustained C.P.G. and retail growth,” said Staci Covkin, principal at I.R.I. “Recent I.R.I. research has demonstrated that improved insights and activation of these shoppers can result in significant sales and market share uplift.”
While Hispanic consumers vary in terms of income, age, country of origin and lifestyle, like other consumer groups, the population also differs by level of acculturation. Some continue to prefer Spanish-language media, speak mostly Spanish and live in tight-knit Hispanic communities, while others are integrated into American culture and lifestyles.
Acculturated Hispanics have a median income of $62,000, seek value and may be willing to compromise on product quality for a good deal.
Bicultural Hispanics are bilingual but choose to follow Hispanic traditions and tend to buy products marketed specifically to Hispanics. This group is digital savvy, more likely to try new things, and consume both English- and Spanish-language media.
Unacculturated Hispanics rely on Spanish translations on packaging and buy products specifically marketed to them. Money is tight for these consumers, but they are passionate about cooking healthy and traditional meals. This segment also is more easily influenced by advertising before buying a product.
“Manufacturers must design products and packaging to meet these groups’ needs, and retailers must adjust planograms and store layouts to facilitate activation,” the report said. “Manufacturers and retailers should collaborate to create attractive promotions and optimize the retail experience.”
In an effort to reach the Hispanic population, the Kellogg Co., Battle Creek, Mich., this year launched a digital platform called Dias Grandiosos, featuring recipes, tips, articles and original content designed for Latinas and their families.