MADISON, Wis. -- Ethnic diversity within the larger Hispanic culture can frustrate retailers looking to market preferred products in an inviting manner, but the effort will be richly profitable, concludes a new study that examines the shopping preferences and buying habits of this fast-growing segment of the U.S. population.
Numbers tell the story: Hispanics currently make up 11% of the U.S. population, but that percentage is estimated to grow steadily to upwards of 25% by the year 2050, and that means good news for supermarkets, especially their delis and bakeries, said Rosita Thomas, president, Thomas Opinion Research, based in Woodbridge, Va.
A complete report on the study has just been published by the International Dairy-Deli-Bakery Association here. Thomas, commissioned by IDDBA to do the research earlier this year, presented highlights of her findings at the IDDBA annual convention in Anaheim, Calif., this summer.
She emphasizes early in the report that properly cultivating the lucrative Hispanic customer base requires respecting the different subcultures that make up the Latino demographic. Retailers need to take into account countries of origin and feast or religious days celebrated by a particular customer base, and even the different names people of Hispanic descent give the same food item, she said. What's more, this micromarketing may require a store-by-store examination of the Hispanic customer base.
Nevertheless, the Thomas poll bred several general conclusions that can help retailers create merchandising programs aimed at Hispanics, Thomas noted. For instance, the study shows that this booming segment of the population does its primary food shopping at American-style supermarkets (as opposed to Hispanic markets or bodegas), eats at home more often than the average U.S. household, has bigger families, celebrates a large number of holidays and cultural events, and buys a lot of cakes.
"Hispanics are a food-loving, social people. They celebrate more than Anglos, and the celebration always involves food. One focus group member said her family celebrates any kind of holiday and eight out of 10 respondents said they prepare Hispanic foods for a lot of holidays like Christmas Eve and Cinco de Mayo," Thomas said.
But that's not to say they wouldn't like a little help with all that holiday preparation. Indeed, more than half said they would like their supermarket to do some of the cooking.
"More than half, 58%, said they would like their supermarkets to offer traditional Hispanic foods, prepared, for such occasions and 62% would like their supermarkets to offer catering services for Quinseaneros," she added.
Quinseaneros may sound arcane to many supermarket operators, but to the Hispanic community, it is an event of great importance. It marks Hispanic girls' 15th birthday -- and the Thomas survey showed that six in 10 respondents had attended one or more Quinseaneros celebrations in the past two years. An astounding 8% of Central Americans have attended 16 or more Quinseaneros in the past two years, Thomas said, pointing to one instance of the subculture nuances at work in the larger Hispanic population.
A full 67% of respondents said they eat at home more often that Anglos. Indeed, 53% said they cook dinner at home every night. But they also buy prepared foods and that spells opportunity for supermarket delis -- particularly since the respondents shop the deli for other items, Thomas said.
Respondents said they purchase prepared foods, but 49% buy them from fast-food restaurants. Another 17% buy them from full-service restaurants. Only 9% said they bought prepared foods from supermarkets.
The supermarket deli, however, is an important source for cooked chicken, they said. Forty-five percent said they buy hot, cooked chicken at supermarket service delis. Among Cuban Americans, that percentage is 49% and among Mexican Americans, 52%. In focus groups, participants suggested supermarket delis offer Hispanic side dishes with roasted and fried chicken.
Focus group participants also said they wanted to know that the chicken is fresh. They suggested supermarkets let them know food is fresh either with signage or with stickers on packages that say when a product was prepared. For 61%, freshness is the top priority, and 80% said they'd pay more for quality prepared foods.
"Sure, you pay more [for prepared foods], but you're buying convenience. If you really think about it that way, it's almost cheaper than making it at home," said one focus group member.
Surprisingly, more than half (52%) said they'd rather buy prepared foods by the pound than by the serving. Most indicated that sampling spurs them to buy items on impulse, and Thomas added that demos offer the opportunity for bonding, too. She stressed that interaction -- such as in demos or at the service counter -- is important to Hispanics.
Given all these positives, supermarkets need to work on making themselves top of mind when it comes to prepared foods, Thomas said. And she said respondents want more varieties of Hispanic foods and they want authenticity. One focus group participant in San Antonio said, "Don't give us Tex-Mex food and say you're meeting our needs. We want authentic Mexican food, but our only alternative is Tex-Mex."
Most respondents (71%) said they do their primary food shopping at American-style, chain supermarkets and 63% buy service deli products from American-style supermarkets. Indeed, 21% are going to the supermarket service deli two to six times a week.
One deli product that's particularly important to Hispanics is shaved meats, the survey showed. Fifty-three percent prefer shaved meat and 40% favor thicker slices. Ethnicity differences showed up in this part of the study as well, Thomas pointed out. The majority of Cubans and Puerto Ricans, for example, prefer shaved meats, but the majority of South Americans prefer thicker cuts.
Cheese is popular, with 91% of respondents saying it is a good source of calcium for their families. The majority of Mexicans, South Americans and Caribbean Islanders buy chunk cheese most often, though most Puerto Ricans buy sliced cheese more often.
Not surprisingly, tortillas are big, too. Sixty percent said they would like their supermarkets to make fresh tortillas on the premises.
And cakes! A full 95% of participants reported celebrating birthdays with cakes. One woman said, "You have to cut a cake to celebrate a birthday!" And 13% said they have bought a photo-image cake.
"I think that's an impressive percentage since those photo cakes haven't been around that long," Thomas said.
While cake and other sweet baked goods are big, cookies are not -- literally. In a focus group, one woman said, "Big cookies turn me off. I'd rather eat 20 little ones."
The participants said they like buying green bread for St. Patrick's Day and rainbow bread for the kids, but still want more Hispanic products. Twenty-one percent are dissatisfied with the variety of Hispanic products in their in-store bakeries and 18% said the same about the deli.
In addition to convening focus groups in four different parts of the country in the spring, Thomas Opinion Research conducted telephone interviews with 1,000 Hispanics nationwide. Sixty-four percent of the interviewees have children under the age of 18 living in the household and 71% have three or more adults living in the household.
The just-published, 96-page research report, with more than a hundred tables and charts, also offers specific advice on how retailers can meet the needs of Hispanic consumers.