-By César M. Melgoza

One of the most common mistakes made by American grocers and other retailers is when they assume that Hispanic (Latino) consumers are downscale shoppers. Although Hispanics tend to have lower income levels than non-Hispanic white households, the amount they spend on groceries and other products is actually greater than that of non-Hispanic white households and many other segments. Furthermore, some find it counterintuitive that Hispanics spend more on premium products such as fresh fruit, vegetables, fish and premium meat products.

To the savvy marketer, this is not new -- although some still struggle on how to take action on these insights. The savvy marketer knows that Hispanic culture values food prepared and consumed at home because of family values that translate to meals that are more often shared with family members. This is cultural and transcends economics in many ways. Additionally, convenience is a way of life. The traditional way of grocery shopping in Latin America is to buy fresh products at open-air markets daily during the early-morning hours -- some might consider this an upscale attribute of “upscale/modern-American culture.”

Here are some numbers that might help bring this critical subject into focus:

--The median age of Hispanics is 27 vs. 41 for non-Hispanic whites
--Life expectancy for Hispanics is 83 vs. 81 for non-Hispanic whites
--Hispanic households spend an average of $313 vs. $241 on fresh vegetables, $308 vs. $256 on fresh fruit, $155 vs. $119 on fresh fish and seafood, and $136 vs. $127 on non-carbonated beverages -- this ranges from 7 percent to 30 percent above spending for white households
(Source: Geoscape® Consumer Spending Dynamix™ 2009 Series)


From average present life span, Hispanic households will spend far more (on average) than non-Hispanic whites on food consumed at home. As Latinos form an ever large part of the American , they will represent an increasingly large part of grocers’ profits.

Since the year 2000, Hispanics have been responsible for 50 percent of the growth in the U.S. population and have contributed a full 13.4 million new Americans north of the border -- that’s more than all the people in the Chicago metropolitan area. Each year between 2009 and 2014, about 1.25 million Hispanics will join us -- that’s like a new San Antonio every year with nothing but Hispanic people.


Today, Hispanics represent nearly 16 percent of the American population, with 48.6 million steady residents (non-transient) in the nation. Fifty years ago, Hispanics were mainly present along the southwestern U.S. border -- some of them were here prior to their homes bearing a U.S. address, since much of the southwest was once part of Mexico, and, before that, Spain. As of 2010, each and every one of America’s over 3,000 counties has at least one person who identifies him- or herself as being of Hispanic origin, and many of the largest metropolitan areas are “majority-minority” places. (Source: Geoscape American Marketscape DataStream: 2009 Series).

“Hispanicity”™ is a term that facilitates the attribution of Hispanic culture. That is, Hispanics are multi-dimensional, meaning that some Hispanics are bilingual (about 60 percent), and about 20 percent are dependent on either English or Spanish. Furthermore, Hispanics can come from any one of over 20 countries, each with its own subculture, and in some cases distinct word usage -- and certainly varying culinary palates. When you add constructs like lifestage, socio-economic strata, family composition, housing, psychographics and lifestyles you soon will conclude that a little homework -- and honing of the target definition -- will go a long way.

Often the biggest obstacle to capitalizing on the Latino boom isn’t the marketing science, but the organizational complexity. Getting buy-in from corporate colleagues and management is the largest initial challenge to getting a meaningful effort off the ground. Many companies fool themselves into believing that assigning one lead person who will “consult” with the rest of the organization to help them “Hispanicize” their marketing will actually deliver significant results. In fact, that approach may do more harm than good -- because it can lead to lackluster results and frustration. Essential to really capitalizing on the Latino boom is getting upper management bought into a long-term investment plan that goes far beyond an advertising campaign and starts with strategic analytics.

Right-sizing for the opportunity is essential for getting ahead of the competition. What we’ve seen among grocers on the West Coast like Vallarta, Superior and Ranch markets is an example of how “in-culture” shopping experiences result in high volumes of consumer traffic. What they’ve done is build stores that have the right products, pricing and staffing that appeal to the palates and cultural characteristics of Hispanic consumers. Much can be learned from this approach -- and it’s not impossible, as large chains like Publix and Wal-Mart have begun to experience with their Hispanic-themed stores.

So during your next staff meeting, ask your colleagues if Hispanics are upscale or downscale consumers -- and give prizes to the winners!

César M. Melgoza is managing partner and CEO of Miami-based Geoscape®. For more information, go to www.geoscape.com or call 888-211-9353.