A decade ago many regional and national food retailers started to actively target Hispanic consumers in response to U.S. Census figures. These figures indicated that Hispanics are the new majority among minorities, surpassing non-Hispanic African Americans. One of the figures about Hispanics that resonated most with corporate America was the astonishing population growth of nearly 60 percent compared to a 3 percent growth for non-Hispanic Caucasians between 1990 and 2000. Projections show no sign of slowing down.
Food retailers like Publix, Safeway and Wal-Mart began targeting the Hispanic consumer more actively due to this reported growth. The stores expanded their ethnic isles and product offerings to include fresh tortillas, corn husks for tamales and queso fresco. Additionally, national consumer packaged goods (CPGs) increased or began to offer flavor profiles to include jalapeño flavor chips, dulce de leche ice cream and mint mojito gum. This diverse product offering has increased CPGs’ appeal and favorability among Hispanics.
It is not surprising that today the differentiation line between Hispanic and general market (GM) stores have become more nebulous. In many instances, both types of stores offer the same Hispanic products; eliminating the need for Hispanics or anyone else looking to buy Hispanic products to make an additional trip outside the traditional supermarkets.
Currently, 59 percent of Hispanics shop primarily at GM supermarkets while only 12 percent shop at Hispanic stores. According to a 2009 research study commissioned by the Food Marketing Institute, the gap between stores of preference becomes even more pronounced when looking at more acculturated Hispanics – 71 percent visit GM supermarkets and 8 percent visit Hispanic stores.
Marketing strategies implemented by GM grocery stores to attract Hispanic consumers have been duplications of or slight modifications of those that Hispanic grocery stores use. For example, promoting and discounting key items like avocado, tomatoes, and beans, hosting in-store festivals and even opening stores under a Spanish banner.
“The retailers are only scratching the surface of the Hispanic psyches with these initiatives,” explained James Legg, executive vice president of client leadership at The San Jose Group, a multicultural agency specializing in communication solutions that connect brands and consumers. “Both GM and Hispanic grocery stores are failing to look beyond the unacculturated Hispanic; they are ignoring the Nuevo Latino,” adds Legg.
The Nuevo Latino is the bilingual and bicultural Hispanic who navigates between the tradition and heritage of the Hispanic culture and the convenience and pragmatism of the American culture. They are not confined to one or the other, but live in both cultures simultaneously and often look to define a new self identity. A transition is happening and is evidenced by a Synovates – 2008 US Diversity Markets Report, which found that 66 percent of all Hispanic consumers are considered bilingual/bicultural.
“The current strategies that seek to establish an emotional connection through a festive atmosphere filled with bold colors, piñatas and mariachis; or the Spanish music blasted through the store intercom do not trigger the same emotions among Nuevo Latinos,” shares Legg. On the other hand, it does not mean that GM grocery stores are destined to be the recipients of Hispanic defectors of traditional Hispanic stores.
Given that this transition is not unique to Hispanic consumers, some Hispanic grocery stores, such as Fiesta Mart in Texas, Sedanos in Florida and Pete’s Market in Chicago, are also transitioning into large format supermarkets. Even though their marketing strategies are still focused toward unacculturated Hispanics, it will only be a matter of time before they transition their marketing toward more bilingual/bicultural Hispanic consumers.
Nuevo Latinos are an important part of the Hispanic market spectrum. Current data show that between 2000 and 2008 the country’s population grew by 22.6 million people, with Hispanics representing 51 percent of the total growth. It is projected that this growing segment will be even more evident (and influential) when the 2010 U.S. Census figures are released.
With the release of 2010 U.S. Census, Hispanic advertising agencies are expecting grocery giants to rekindle their urgency in targeting Hispanic consumers. This time around, marketers should be chary of Hispanic and non Hispanic agencies that fail to recognize the cultural transition that is occurring within Nuevo Latinos. Consequently, understanding the cultural nuances within the Hispanic segment will be pivotal to successfully target the Hispanic marketplace.