Most Wanted in America's Grocery Aisle: Hamburgers, Hot Dogs, and Taco Pizza?


A look at the long-term growth trend shaping the future of the U.S. food & beverage industry

by Charles Moore, president and owner of Premier Products, Inc., and founder of Buena Foods, Inc.


Question: What is the largest U.S. government-verified, long-term growth trend in the food and beverage industry?

Most would guess the continued growth of organic foods. Or maybe gluten-free. Or perhaps private label. While each of these areas is growing, none of them are the answer. The answer? A direct tie to U.S. population growth.
According to the Child Trends Hispanic Institute, in 2013, Latino children accounted for one of every four children in the U.S. The following year, the Hispanic/Latino population reached 55.4 million or 17.4 percent of the total U.S. population. And by 2044, the Census projects Latinos to be more than one-quarter of the population. An article published by Nielsen Research (“Making of a Multicultural Super Consumer”) reports that over half of the population growth between 2010 – 2020 will be Latino.
Combine that with the increased purchasing power of the Latino shopper and the consumer products & goods (CPG) industry has a ripe opportunity. In 2010, Latinos spent $1 trillion in retail and CPG, a number that was expected to grow by 50 percent by last year. More importantly for the food and beverage industry, the average Latino household spends $30 more a month on groceries compared to the total U.S. ($361 vs. $331). To put it in perspective, if the U.S. Latino market were a country, says Mike Valdes-Fauli, president and CEO of Pinta marketing agency, “it would be the world’s 11th largest economy. How can any brand ignore that?”


It’s all in the stats

Let’s take a look at foods that have been historically thought of as “Latino” from a general market standpoint. According to a 2013 report featuring data from IRI (formerly SymphonyIRI):
  • Salsa is the number one selling condiment in the world, outselling ketchup two-to-one.
  • Tortillas outsell both hot dog and hamburger buns combined.
  • Tortilla chips outsell potato chips.
  • Tacos and burritos have become so mainstream to the general American public —as mainstream as pizza and spaghetti — that they are no longer considered ethnic foods.
Now let’s take a deep dive into Latino purchasing. A 2015 report by Univision and Acosta Sales & Marketing found that:
  • Latino shoppers are 18 percent more likely to have sit-down meals with their families compared to the total U.S. population.
  • Latinos eat 3.3 meals daily compared to 2.8 for the total U.S. population.
  • Latinos spend more average time on their shopping experiences (53.2 minutes) versus the U.S. general population (49.9 minutes).
  • Forty-three percent of Latinos are willing to pay a premium price for natural/organic foods versus 30 percent of the general U.S. population.
What could this mean for the future of U.S. food and beverage offerings?
We might see more authentic Latino food products on shelves that feature genuine Latin ingredients. Brands might adapt their flavor profiles or co-brand a separate offering as a line extension. (For instance, in 2013, baby food giant Beech-Nut teamed up with Goya Foods to launch Beech-Nut Goya, marketed as “Authentic Hispanic flavors made especially for your baby”.) And for manufacturers already in the game, we may see positive growth in private label, Latin-inspired offerings and even better numbers for inspired natural/organic offerings.
On the retail front, there might be movement in the aisles. Stores might increase their Latin food sections or opt to position these products more prominently, placing them outside of the traditional “international section” and in main line sets. Additionally, we might see stores re-designed and re-formatted to add the cultural flavor of the Latino community. And, of course, I think we can expect to see new products that are not, nor have ever been, sold in the U.S.


Not just about flavor

As a Latin food producer, my company, Buena Foods, has conducted numerous focus groups, test marketing, and surveys partnering with the National Hispanic Institute, the largest Latino non-profit with a total reach of over 3 million Latinos. In these non-published reports, we found that many Latinos consider authentic food and beverage products as an important tie to their heritage, including 88 percent of second-generation Latinos and 79 percent of third-generation Latinos.
But it’s not just about traditional flavor profiles and ingredients (or at least what many U.S. consumers perceive to be traditional). For example, less than 15 percent of respondents in our surveys considered the inclusion of hot spices or peppers to be an important factor when purchasing food and beverage products, while 72 percent said a connection to the product is more important than its ingredients.
Nearly all of those surveyed (92 percent) said they would definitely purchase a new item if they knew it was owned and operated by a person of Latin or Spanish descent, even if it was not a Latin food product. In contrast, 83 percent noted they would not trust the authenticity of a Latin product if it were produced by a large American food conglomerate, and 63 percent said they would not purchase.
When it comes to marketing, 83 percent of respondents said it was important to include people of Latin or Spanish descent in advertising (16 percent noted they would like advertising of a product to be totally in Spanish). Sixty-four percent said an advertisement would capture their attention if they saw a Latino family together at the dinner table.
I believe the winning manufacturers and retailers will be the ones that adapt to this changing consumer landscape. Maybe we’ll see store managers being hired because they speak Spanish (we found that 94 percent of Latinos speak both English and Spanish at home). It’s possible that we’ll see new products on the shelf (tres leches cakes, horchata, sopapillas, etc.) that are basically non-existent in most grocery retailers today. Or maybe more food and beverage companies catering to the Latino community will pop up, including companies that are owned and operated by people of Latin descent, possibly triggering joint ventures with larger food and beverage companies.


Please note: This article contains the sole views and opinions of Eric Grover and does not reflect the views or opinions of Guidepoint Global, LLC (“Guidepoint”). Guidepoint is not a registered investment adviser and cannot transact business as an investment adviser or give investment advice. The information provided in this article is not intended to constitute investment advice, nor is it intended as an offer or solicitation of an offer or a recommendation to buy, hold or sell any security. Any use of this article without the express written consent of Guidepoint and Eric Grover is prohibited.


Learn how Guidepoint can help with your research needs