Shining a Light on Hispanic Grocery
As CPG brands and retailers consider market share, consumer buying power and trends for 2025 and beyond, the U.S. Hispanic population offers companies unique investment and growth opportunities. Taking a closer look at the grocery channel provides a snapshot of the growing economic impact of Latino consumers and shines a light on the nuanced and authentic marketing practices needed to deepen connections with these influential multicultural shoppers.
A Growing Economic Driver
According to the Latino Donor Collaborative (LDC), the “U.S Latino GDP was $3.6 trillion in 2022. Considered as a separate country, this would make U.S. Latino GDP the fifth-largest global economy.” The organization’s research further predicts by 2029, the “U.S. Latino economy to rank as the fourth largest worldwide at $5.7 trillion.”
From a population perspective, according to the Pew Research Center, 63.7 million Hispanics of diverse origins in Latin America and Spain were living in the United States in 2022.
LDC reports that U.S. Latinos currently comprise 19.5% of the U.S. population and 25% of young Americans aged 18 and under.
“The cultural diversity within the U.S. Hispanic population and the concentration of youth are important considerations that have current and future implications for brands and retailers. Furthermore, the multigenerational family construct notably influences their shopping behaviors,” says Victor Paredes, vice president of cultural strategy for Collage, a Cultural Intelligence Engine that references consumer, industry and brand data to provide insights on consumer behavior and decision-making.
Ernesto Ruiz, executive group director of Macias Creative, highlights vital nuances for brands and retailers to consider. “This shopper group is complex, and the different levels of acculturation require different approaches that make marketing very interesting,” he describes. “Some shoppers are Spanish-first and closely identify with their Latin American culture of origin, they are best reached with messaging that feels distinct and personally relevant. Then you have bilingual and bicultural shoppers balancing Hispanic traditions with American culture, looking for brands and retailers to reflect their blended identity. Lastly, English-first shoppers tend to identify more with American culture, often responding to broader, mass-market efforts.
“The key to success is in understanding each group’s level of acculturation and the unique nuances, including regional dynamics, that influence them.”
When looking specifically at the Latino impact on grocery shopping, the Hispanic Marketing Council’s 2024 Hispanic Market Guide shares that Latinos represent 15% of all food spending, with an 84% increase from 2012 to 2022 versus only 53% for all households. Furthermore, they spend an average of 6% more than non-Hispanics at food stores in an average week.
The Grocery Landscape
From post-COVID-19 pandemic influences to the impact of inflation, the grocery industry has noted a variety of consumer shopping habits. Whether looking for the best deal, seeking an experience or shopping for specific recipe ingredients, there are a variety of shopper mentalities to address.
According to Laura Strange, chief communications and engagement officer of the National Grocers Association (NGA), an organization representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry, “Despite inflation easing, independent grocers continue to face the cumulative effects of elevated prices, leading to more cautious spending from shoppers. A large majority of consumers, responding to price pressures, shopped across multiple stores and ultimately reduced their overall purchases.”
R.J. Hottovy, head of analytical research for Placer.ai, a location-based analytics company powered by mobile data, concurs with Strange: “One of the trends we have seen across the grocery space is that people are shopping a wider number of grocery stores than ever before as they seek out value. As a result, people are buying fewer units per transaction. Consumers have almost retrained and built a whole new routine around groceries, particularly in the last 12 to 18 months.”
A closer look at Hispanic-focused grocery destinations presents a variety of options depending on the given region and city. There are bodegas and traditional, independently owned Hispanic retailers, regional Hispanic grocery chains such as Cardenas Market and Northgate Gonzalez Markets, and mainstream grocery retailers that cater to a Hispanic audience. From the dominant presence of Wegmans in the Northeast, Publix in the Southeast and Texas-based H-E-B to Kroger and Walmart, big grocery chains are paying attention and adapting stores and marketing strategies to the growing Hispanic population.
With that said, Placer.ai analytics shows Hispanic grocery chains, such as Northgate Gonzalez Markets, Vallarta Supermarkets and El Super, demonstrating higher visitation trends compared to the overall grocery category. “Most of the chains we analyzed are showing high single-digit or low double-digit growth on a year-over-year basis compared to the low to mid single digits within the overall grocery category,” says Hottovy. “These chains as a whole are growing faster than the overall broader grocery category.”
This analysis includes evidence of growth in the non-Hispanic audiences shopping in the Hispanic grocery category. “Hispanic grocery is a faster-growing category, and the mix of people coming to these stores is starting to evolve,” says Hottovy.
Strange concurs that the Hispanic grocery segment is poised for continued growth. She believes its influence on the broader grocery industry will likely deepen as companies increasingly adapt to the tastes and preferences of Hispanic shoppers. “Hispanic foods are increasingly popular in mainstream culture, with the Hispanic food market valued at over $22 billion in 2021. This is projected to grow by more than 6% annually as the Hispanic population in the U.S. expands and their purchasing power increases.”
The In-Store Hispanic Grocery Experience
Authenticity and product diversity, combined with a family-focused experiential environment, set the Hispanic grocery experience apart from mass grocery.
“Hispanic grocery stores often focus on authenticity, offering a wide variety of products that cater specifically to Latin American cuisines, such as fresh produce, meats, and spices that are not always available in mainstream supermarkets,” describes Strange.
Paredes believes the successful diversification of ethnic grocery stores will continue to put pressure on other retailers. “From inception, every aisle is a diverse aisle, and as these grocers expand to bring in other flavors and dynamics, they spread it throughout their store, which makes their footprint a growing evolution and a threat to the other market players.”
Strange credits the growing influence of Hispanic shoppers on several trends in mainstream grocery stores. “Many have expanded their Hispanic food sections, offering a broader range of Latin American products, including spices, snacks and prepared meals.” She also notes that store layouts and marketing strategies are being adapted to appeal to Hispanic consumers, including bilingual signage and culturally relevant promotions.
However, Paredes emphasizes that more transformation is going to be necessary. “Too many retailers still treat the diverse palate as things that belong in the international foods aisle. There needs to be a diversification of the footprint at-large so that the wide array of products serving the ethnic palate, from meats to baked goods, are everywhere. Putting these products in a single aisle is shortsighted and runs counter to how consumers move through a supermarket.”
Other successful attributes of the Hispanic grocery environments are the focus on family and the integration of more extensive trial experiences. “You are more likely to see these markets incorporate a bit of a restaurant function,” describes Paredes. “This function allows them to showcase products in their stores and provide a meal occasion. They know their shopper often brings in the family, so this offers a quick meal solution while supporting a cultural atmosphere and environment of trial.”
From evaluating product assortment, the role of the international food aisle and the integration of Hispanic produce, spices and brands throughout the store, mass retailers can explore and learn from the nuances of the Hispanic grocery store experience to better serve Hispanic consumers.
Resonating With the Hispanic Consumer
While longstanding brands such as Goya Foods Inc. maintain market share, emerging health-conscious and sustainable brands such as Loisa (New York-based certified organic Latin seasonings and cooking sauces) and Amasar (Puerto Rico-based innovative breadfruit alternative flour blends) are finding their distinct place. And, mainstream brands are investing in cultural collaborations and flavor explorations to connect with Hispanic consumers and continue the evolution of America’s multicultural palate.
Collage published a Summer 2024 report on Top Brands for Hispanics. Insights shared reveal that Hispanic consumers resonate with brands that steward cultural duality, blending traditional heritage with modern cultural influences. Furthermore, according to the report, the top brands embrace cultural specificity by “prioritizing the needs of Span-ish speakers, bringing family and friends together and helping them explore their roots.” Offering innovative products and services, supporting the Hispanic community and evoking positive memories were other attributes of brands that successfully connect with Latino consumers. The report’s list of top brands making these connections included Bounty (No. 2), Dove (No. 5), M&M’s (No. 12), Tide (No. 15), Hershey (No. 18) and Oreo (No. 20).
According to Paredes, “In our data, one of the things we see coming front and center is this duality from Hispanic consumers. On one end, they view the food and shopping experience as a way to uphold, preserve and pass on their heritage. On the other side, with so much to do, limited resources and limited time, they desperately need to find shortcuts while delivering the emotional value they want out of their meals.” Paredes notes this is where technology and access to food creators via social media reinforce their unwillingness to sacrifice food quality while providing the agility they seek.
Other areas of interest for Hispanic consumers that continue to gain momentum are a focus on health and wellness and sustainable practices.
Making Meaningful Marketing Connections
Looking more closely at Hispanic-focused brands, retailers, campaigns and collaborations, numerous successful marketing examples demonstrate the effectiveness of achieving authenticity and cultural relevance, the power of experience and the importance of community-building.
Collage’s Fall 2024 Multicultural Media Report shed light on how brands can expand reach and consumer engagement across channels. Noting Latino consumers as media trendsetters, it highlights social media opportunities, referencing Hispanics as “the ultimate social media users,” including Facebook, YouTube, Instagram, TikTok and WhatsApp. Based on this data, it is no surprise that the report also highlights the appeal of the influencer culture, with 75% of young Hispanic Americans aged 18-44 following influencers, celebrities and other popular accounts. Part of the appeal of the influencer culture is authenticity and learning new things.
Paredes points out that in the digital and social space, one of the passion points and content clusters for Hispanics is food. He also notes that Hispanic creators are an explosive group within the food content realm. “They are pushing the recipes, products and cooking shortcuts, and are very influential in generating what we call advocacy within our cultural fluency assessment.”
In addition to the influencer culture driving traffic and conversions, shopper marketing agency Visual Latina emphasizes the importance of segmentation in retail communications to speak to the distinct cultural origins of the target audience and the application of bilingual practices. They find mobile-first digital activations effective with this digitally savvy consumer, as well as in-store sampling and family-focused “retailtainment” or brand entertainment.
“We believe experiential retail will continue to grow, with supermarkets offering more immersive shopping experiences, such as cultural events, cooking classes and interactive product displays,” says Laura Korchinski, VP account services, USA for Visual Latina.
In addition to experiential retail, the Visual Latina team looks to the impact of continued advances in technology and believes enhanced loyalty programs will continue to evolve for more personalized and tailored shopping.
Paredes and Ruiz highlight the effectiveness of cross-category promotions. From meat and beer pairings to celebrate the grilling occasion to flavor experiences and product mash-ups such as coffee and cereal, they believe thoughtful in-store cross-merchandising and events are producing impactful results.
“When you create a cross-category partnership that is relevant to the audience, you show up in the community in a genuine way,” explains Ruiz. “Hispanics tend to be more emotional about things and less transactional. So, if you can create a positive emotional experience that combines products with a passion point where you are not just buying something, but you are having some kind of community activation, it is shown to both resonate and drive conversion.” He has seen these pairing and experiential strategies produce notable sales results and household penetration for the agency’s clients.
Are You Committed, or Latino Coating?
As you examine your retail and brand experiences and contemplate targeting the U.S. Hispanic population, be prepared to make a true commitment. If marketing strategy conversations focus on superficial approaches, such as implementing a one-and-done Hispanic Heritage Month campaign, casting Latino faces or translating an existing campaign, then you are Latino Coating.
“To us, Latino Coating is a form of cultural appropriation that offers a mere illusion of inclusivity by adding Latino elements on the surface, just like greenwashing or rainbow washing — but preying on Latino identity,” explains Hispanic Marketing Council (HMC) Chair Isabella Sanchez, VP of media integration for Zubi.
“The right agency partners are needed to help navigate the nuances of the Hispanic American reality, making strategic choices informed by the target’s acculturation level, regional differences and the knowledge of each of the retailers,” says Ruiz.
Brands and retailers successfully connecting to U.S. Hispanic consumers are investing in understanding and respecting the nuances of the culture, offering meaningful representation and demonstrating a commitment to this consumer group’s distinct sense of community. Are you ready to allocate the appropriate funds and tap into the expert resources to authentically connect with and serve the Hispanic consumer?