Soup-To-Nuts Podcast

Soup-To-Nuts Podcast: How to better reach Hispanic shoppers

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With a collective spending power of $1.5 trillion, the Hispanic and Latino population in the US is a highly coveted group of shoppers who represent a significant growth opportunity for food and beverage brands that earn their trust and loyalty.

But at 55 million people, clearly not everyone who identifies as Hispanic or Latino is going to have the same values, shopping patterns or preferences. And to treat them as a homogenous group is not only potentially offensive to 18% of the US population, but it could have long-term negative consequences for a brand.

So, in the spirit of Hispanic Heritage Month, which stretches from Sept. 15 to Oct. 15, this episode of Soup-To-Nuts Podcast takes a closer look at this very diverse set of consumers. Raul Corzo, president of the Hispanic cookware and housewares brand IMUSA, shares more about the divisions and characteristics of this population and how they approach grocery shopping.

“The biggest takeaway of where the opportunity lies is understanding the differences between the segments. If you try to address the central American community as well as the Caribbean with one stop-shopping the program will fail. They do speak Spanish, they have a lot of similarities, behaviors, way of cooking, family gatherings. But the food they prepare is different,” Corzo said.

For example, he cited a retailer in his home state of Florida that created a marketing promotion around jalapenos, complete with beautiful advertising, excellent price point and significant store presence with end-cap displays. But the problem was in Florida, the Hispanic community is predominately Caribbean and, unlike Central American Hispanics, they don’t cook as much with jalapenos – so the effort completely missed its target.

“So, this generalization about how all Hispanics are going to behave the same, is not really correct,” Corzo said.

He added that for best results, national retailers and brands need to understand “you are going to have two very distinct presences while trying to address the Hispanic community. So it happens that they are somewhat segmented regionally as well. If you go to Florida, Florida is Caribbean. If you go to New York, you have both but the strongest presence is going to be Caribbean. … And if you go from the middle of the country all the way to California it is going to be more of a central American type influence.”

Different shopping styles

Understanding regional differences is only part of the solution. Retailers and brands also need to understand that Hispanic shoppers also have different shopping patterns compared to the US population overall.

Sales and marketing agency Acosta recently worked with Univision to publish their Hispanic Shopper Study, which found 68% of Hispanic shoppers say that they enjoy grocery shopping versus only 59% of the total US population. They also found that 79% of Hispanic shoppers go to the grocery store with someone else such as a spouse or child or friend.

Corzo explained that this phenomenon stems from the Hispanic culture’s “family approach to cooking at home,” which includes the sense that if a family eats a home-cooked meal together they are taking care of each other – even if that meal is not very healthy.

Deals, discounts and displays work

The Latino shopper overall also likes to find deals when they go to the grocery store, Corzo said.

“You will find they are very susceptible to cross-merchandising,” he explained. “I think if you put something in bulk at the head of the aisle, something that is an everyday product for a central American family, let’s say Maseca products, which is a flour to make the tortillas, and if you surround it with basket type items … you increase the size of the basket. The results are tremendous.”

According to Acosta, product demonstrations also are effective with Hispanic shoppers. It cites 18% of Hispanic shoppers respond well to sampling versus only 11% of US shoppers overall.

But Corzo warns that many of the regular “mom and pop” grocery stores where Hispanic consumers shop do not have the infrastructure or space for demonstrations. This is why he recommends bulking items together as a more effective strategy.

Corzo also notes that Acosta’s finding that 26% of US Hispanic shoppers are influenced by coupons on the shelf is low. This is still higher than the total US shopper, only 21% of which said the same thing.

E-commerce resonates with younger Hispanic shoppers

IRI’s recently published Hispanic Link study also found that Hispanic shoppers have a higher affinity for online shopping than other segments of the US population – an observation that Corzo attributes to a large Millennial subpopulation of the Hispanic community in the US.

He also noted that Amazon is a well-trusted brand to the point that shoppers will pay upwards of 5% to 7% more for products from the website than from competing online stores because they know and trust it.

“The growth is there,” he added, noting that IMUSA’s business through Amazon grew 42% compared to last year, which “is a substantial number.”

He attributed part of Hispanic shoppers’ interest in e-commerce due to the fact that as a minority they might not represent a large enough segment of select brick and mortar stores’ consumer base to justify stocking culturally important foods and utensils. But they can find everything they need online.

Other strategies to reach Hispanic shoppers

Retailers and brands that are trying to attract Hispanic shoppers can do so by acknowledging their cultural heritage, including important holidays and staple foods, Corzo said.

“I have been doing this for 20 plus years and I have found when a Latin consumer, or any consumer overall, is able to find the brands that remind them of home, the traditional tastes, the traditional ingredients it makes a difference. It creates a sense of loyalty to the store because it is where they can find the things that they miss,” he said.

With that in mind, he said many mom and pop and smaller brands can effectively compete about the big guys by not just targeting Hispanic shoppers during big American moments, such as the Super Bowl, but also during key World Cup games, Mexico’s Independence Day and Dia de los Muertos.

Take care with language

When to use Spanish or English is a sticky subject and one that Corzo said he is still navigating. But, he said, manufacturers and retailers that opt for Spanish need to use the correct words at the correct times.

He explained different words mean different things to different subsections of the Hispanic community. For example, a plancha is a flat surfaced pan often used for tortillas, but it can also mean a clothing iron depending on where a person’s heritage is rooted.  

Ultimately, all these best practices boil down to taking the time to figure out the differences between the subsections of the Hispanic population – an investment that Crozo said is worth it.

He added: “If you give them what they want, what they are used to, the brands they like – they will be your customers for life.”

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Comments (1)

Anagha Patwardhan - 14 Oct 2016 | 09:34

Cross Country Learnings

So many of these points are equally applicable in Canada. In fact the scope is even wider, given the diversity in Canada. Of course, it is tempered by the fact that the overall population numbers are much smaller and hence less actionable on a mass scale.

14-Oct-2016 at 21:34 GMT

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