Using Salsa & Ketchup to Measure the Growth of Hispanics: Lawrence
Posted: Apr 21 2014
There are two ways to measure the growth of the Hispanic market. One is to measure how much Hispanics are consuming relative to the general population. The other, just as important, is to measure how much Hispanic consumer tastes are shaping consumer patterns as a whole.
Marketers Rating Hispanics Highly in "Influence"
By either standard, Hispanics are proving unusually influential. Although less than one-sixth of the US population, Hispanic consumers, according to marketers, tend to "index" much higher than other ethnic groups; that means they tend to buy more consumer products – especially food, cosmetics and apparel – relative to their numerical weight in the market.
Hispanic Families - Yes They're Big!
One reason is Hispanic demographics. Hispanic families are relatively large – 4.0 persons compared to the national average of 2.9 -- and partly for that reason, they’re also more likely to buy in bulk. The population is also younger – by about 10 years -- which allows marketers to start building "brand loyalty" with this group much earlier in its life span. For both reasons, Hispanics over time can generate enormous sales revenues relative to the “average” American consumer.
For example, Hispanics, on average, purchase 90% more dried vegetables and grainsthan American consumers as a whole. And because of their larger families, they spend 75% more on baby food and baby-related products. Even sports drinks, which are typically marketed most heavily to professional athletes, hold a special appeal to Hispanics, who are 50% more likely than non-Hispanic Whites to buy them.
Who Eats Salsa? Well...Everybody!
Hispanics are also influencing the general consumer market, which makes them even more attractive to marketers. Take, for example, salsa, once a niche food product produced by Hispanic-owned companies like Goya. These days everyone is eating salsa, and large general market companies like Kraft and General Mills are dominating manufacturing. How mainstream is salsa? According to Packaged Facts, Americans in 2012 consumed nearly twice as much salsa as they did ketchup or mustard, making it the nation’s “condiment of choice.”
Hispanics seem to have achieved this broad influence over American consumer culture more quickly than other past groups. For example, it took numerous generations of immigrant assimilation for Italian pasta and wine - and Italian restaurants - to occupy such a prominent place in American cuisine. Hispanics, of course, aren’t just immigrants. Much of the American Southwest once belonged to Mexico. Even before the American conquest, Mexicans exercised strong influence over regional American cuisine. So, in a way, the nation as a whole is just catching up.
The Hispanic consumer market is also larger than any previous ethnic market, and it’s still being replenished by immigrants. That’s led marketers to adopt a two-fold strategy: some advertising is conducted in Spanish to reach the first-generation consumer and to establish brand identity with Hispanics generally. (One example would be McDonald’s “Me encanta” billboards and TV ads). But for Hispanics who are bilingual or English-dominant, marketers may use a single ad for the general consumer market, but with a decidedly Hispanic cultural “spin.” (See, for example, theremarkable Tostitos ad, “And Then There Was Salsa.”).
Hispanic Purchasing Power
With some products, expanding sales to Hispanics are compensating for a steep decline in sales to the general consumer. A good example is credit cards. In the past decade, total sales declined by 7%; however, Hispanic purchases of credit cards increased by 23%. Some of this trend is due to expanded outreach by financial institutions to Hispanic immigrants. However, it’s also due to the rising creditworthiness of Hispanic middle class. Among individuals with incomes of $50,000 or more per year, Hispanics are growing faster than any other ethnic segment, including Anglos.
What's Next? The Burger?
No wonder, then, that salsa’s become the “new” ketchup. And with so many consumer products dependent on expanding Hispanic wallets – and appetites -- perhaps it’s only a matter of time before Mexican tacos and burritos take on another American icon: the hamburger.
Stewart is a policy analyst, author and writer for Hispanic.com