By 2028, the Hispanic population is expected to account for 22 percent of the U.S. population and the growth and popularity of Hispanic cuisine and grocery retailing is also expected to continue to expand substantially. To compare, Hispanics represented 19 percent of the U.S. population in 2020, a huge increase from 12 percent in the 2000 census
In the Mid-Atlantic alone, the number of Hispanic-owned grocery stores (over 20,000 square feet) has nearly tripled over the past 15 years. Currently, we estimate that there are 111 Hispanic supermarkets in the region (Baltimore-Washington, Richmond-Tidewater and part of Pennsylvania and the Delmarva peninsula) accounting for $1.74 billion in annual sales. That compares with only 38 Latino-owned supermarkets in 2009 which amassed estimated annual revenue of $532 million. Neither figure includes the dozens or smaller markets and bodegas operated by Hispanic grocers.
According to a study by L.E.K. Consulting, the buying power of the Hispanic population grew more than three times faster than that of non-Hispanic consumers from 2010-2020. Hispanic families tend to do more of their shopping at grocery stores (as opposed to eating out) and purchase more historically traditional products (meat, rice, beans) than the other ethnic groups. Moreover, 26 percent of Hispanics live in multi-generational households (versus 13 percent of the white population), basked size is typically larger.
The growth of the Hispanic population also creates potential for traditional supermarkets. As the wide array of Latino foods expands, non-Hispanic retailers are seeing significant growth of the ethnic and specialty departments as many of those international items become more mainstream. And in part, due to the popularity of cooking shows and The Food Network, Americans are learning and buying more Latino products and ingredients.
That can be readily seen with a brand like Goya which enjoys tremendous popularity not only with Hispanic customers but has a strong following with non-Latino consumers in most U.S. supermarkets. Additionally, a distributor like EMD sales, with its diversity of Hispanic products from many countries, offers traditional retailers an opportunity to market and merchandise brands that are becoming more mainstream. And U.S. Manufacturers are taking note, too. In 2020, McCormick acquired Mexico-based Cholula Hot Sauce for $800 million, 25 times EBITDA.
The news is also encouraging for Hispanic foods growth online. In a study published last year by national food broker Acosta in partnership with TV network Univision.
“There are several key takeaways from this study,” said Kathy Risch, SVP-consumer insights and trends at the Jacksonville, FL-based sales agency. “Hispanic shoppers are very digitally savvy and are shopping online even more than they were in 2020,” she said. “In addition, we learned that while equally concerned about inflation, the Hispanic shopper is not as cost sensitive and is more focused on other brand attributes.”
Also important, noted Risch is “the in-store experience is highly valuable to Hispanic shoppers, interacting with products in the aisles, seeking recipe or meal suggestions and obtaining product information.”
The study showed that a majority of Hispanic shoppers continue to choose to shop in-store, with 67 percent of respondents saying they enjoy shopping for the experience, back to pre-pandemic levels. They enjoy browsing in the aisles, and 40 percent say they will try new items if recommended by friends or family.
Online shopping continues to grow, with 29 percent of Hispanic shoppers regularly shopping online for groceries. Nearly all (87 percent) Hispanic and non-Hispanic online grocery shoppers plan to spend the same or more online last year as they did in 2022, with 34 percent of Hispanic shoppers saying they intend to spend more.
Whether online or in-store, this is a digitally savvy audience. Four in five of Hispanic shoppers (80 percent) are using digital apps, and these shoppers are also more likely to use a variety of digital tools to check for recipes, create lists or research events in their local communities, whether shopping online or in-store. Similarly, 79 percent of these customers have at least one shopper loyalty card, an opportunity for engagement wherever shopping is done.
The study found that Hispanic shoppers are spending significantly more than non-Hispanic shoppers on food at home as well as food prepared outside the home, including restaurant meals, takeout and delivery.
“Interestingly, while having nearly identical levels of concern about inflation and an awareness of increased prices, Hispanic shoppers are less likely to notice higher prices across all categories, reflecting their greater focus on product ingredients, new offerings, brand story, and natural and organic products,” says Risch.
U.S. Hispanics are an economic powerhouse, contributing $2.8 trillion (GDP) to the American economy and representing the 5th largest world GDP, tied with the UK and larger than India, Italy, Brazil and Canada, according to the Latino Donor Collaborative’s September 2021 “LDC U.S. Latino GDP Report”.
This audience of more than 62 million is projected to represent 56 percent of U.S. population growth between 2021 and 2030, with those numbers even higher for Hispanics aged 18 to 49, per the U.S. Census Bureau data.
“Understanding the Hispanic shopper’s evolving purchasing behaviors and the drivers behind them are critical insights for brands and retailers,” concluded Risch.