Hispanics and Beverages - US - February 2008

SCOPE AND THEMES
What you need to know
Definition
Data sources
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Hispanics can provide growth—even in high-penetration beverages
Value and convenience determine Hispanics’ retail outlet choices for buying non-alcoholic beverages
Diversity among Hispanics calls for local marketing strategies
Acculturation and retro-acculturation—large factor in communicating with Hispanics
Language remains a barrier between Hispanic consumers and marketers
Hispanics present growth potential in fruit juice category
Hispanics continue to drive growth in whole milk category
Coffee remains the favorite hot beverage for Hispanics
Hispanics—ideal target population for regular carbonated beverages
Sports and energy drinks—the biggest growth potential from Hispanic consumers
Hispanics continue to prefer imported beer over domestic beer
Hispanic wine consumption differs greatly by demographics
Targeting specific Hispanic demographics—key to increasing penetration
Language can be a barrier to new product trials
INSIGHTS AND OPPORTUNITIES
Hispanics gravitate towards value shopping; price promotions play important role in building traffic in the beverage aisle
What does a change in acculturation level mean for beverage marketers?
 TAKING INSPIRATION FROM PRODUCTS POPULAR IN LATINO COUNTRIES
Non-alcoholic beverages
Fruit and vegetable juices
Milk, and milk flavorings
Coffee and tea
Alcoholic beverages
Beer
Other alcoholic beverages
FAST FORWARD TRENDS
 TREND: NON-STANDARD SOCIETY
Mexicans drink tequila; Cubans and Puerto Ricans don’t
Getting specific with the country of birth
 TREND: BRAND NAME GAME
What does a brand name mean to Hispanics? Pride, nostalgia or flavor?
Domestic brands take cues from foreign (Hispanic) brands
AN OVERVIEW
The Hispanic population—the fastest-growing minority group; the growth in numbers presents an opportunity for the beverage market
Figure 1: Population, by race and Hispanic origin, 2003-13
Age distribution among Hispanic population bodes well for future growth in the beverage market
Figure 2: Young adults aged 18-34, by Hispanic origin, 2003-13
Figure 3: Incidence of drinking sports and energy drinks, by ethnicity, May 2006-June 2007
INCOME
Low median income underscores the importance of price promotion and value beverage shopping
Figure 4: Labor force participation, by Hispanic origin, 2005
Figure 5: Median household income, by race and Hispanic origin, 2006
Due to the low household income, Hispanics are likely to gravitate towards value shopping
Figure 6: Choice of retail outlets to purchase beverages, January 2008
This underscores the importance of price promotions to attract Hispanic consumers to the beverage aisle
Figure 7: Important considerations in purchasing non-alcoholic beverages, January 2008
Hispanics have high collective purchasing power; reaching a larger base of consumers is crucial for growth
Figure 8: Hispanic disposable income, 1990-2012
Expand consumer base to tap into collective purchasing power
Hispanics exhibits higher growth in spending on non-alcoholic beverages, compared to non-Hispanics
Figure 9: Per capita expenditures on dairy, non-alcoholic beverages and alcoholic beverages, by Hispanic origin, 2005 and 2006
COUNTRY OF ORIGIN AND NATIVITY
Figure 10: Hispanics, by country of origin/heritage, 2006
Figure 11: Consumption of wine by Hispanics, by heritage, May 2006-June 2007
Nativity creates difference in beverage preferences and purchase behavior
Native-born Hispanics are likely to mirror beverage preferences and purchase behavior close to the general population
Figure 12: Native-born/foreign-born Hispanics, by country of origin/heritage, 2006
THE HISPANIC HOUSEHOLD
Hispanics’ above-average households will help drive growth in non-alcoholic beverages
Figure 13: Households, by presence of children and Hispanic origin, 2006
Figure 5: Average household size, by Hispanic origin/race of householder, 2001 and 2006
Figure 14: Households, by number of persons in the household—Hispanics vs. non-Hispanics 2006
Hispanic families shop together; harness children power to drive growth
Figure 15: Shopping companion preferences—Hispanics vs. non-Hispanics, May 2006-June 2007
CULTURE AND ENCULTURATION
Culture—an important aspect in marketing to Hispanics
Enculturation, acculturation and retro-acculturation
Length of residence in the U.S.—an important acculturation assessment metric
Figure 16: Personal incidence of drinking carbonated beverages and household incidence of drinking milk, by length of stay in the U.S., May 2006-June 2007
Language—a key indicator in assessing the level of acculturation of Hispanics
Figure 17: Level of acculturation, by language, May 2006-June 2007
Level of acculturation by region
Figure 18: Language Hispanics speak in the home, by U.S. region, May 2006-June 2007
GEOGRAPHIC CONCENTRATION
Five states account for 68% of the total Hispanic population
Figure 19: Hispanic population in top five states, by country of origin, 2006
Hispanics tend to live in big communities; top ten markets can serve as launch pad for the new beverages
Figure 20: Metropolitan areas with the largest number of Hispanic residents, by country of origin, 2006
Figure 21: Largest Hispanic Markets, by Hispanic disposable income, 2005
Hispanic population by four major regions
Figure 22: Hispanic population in four regions, by country of origin, 2006
INNOVATION AND INNOVATORS
Fruit and vegetable juices
Milk, and milk flavorings
Coffee and tea
Carbonated soft drinks
Other non-alcoholic beverages
Beer; new products imitate Hispanic taste palate
ADVERTISING AND PROMOTION
Heineken Premium light lager
Figure 23: Heineken Premium light lager, 2007
Jose Cuervo Tequila
Figure 24: Jose Cuervo Tequila, 2007
Smirnoff Ice
Miller Lite
Heineken
Coca-Cola
THE PEOPLE: NON-ALCOHOLIC BEVERAGES
Fruit and vegetable juices—Hispanic households have potential to drive growth in this segment
Figure 25: Household consumption of fruit and vegetable juice, by Hispanic origin, May 2006-June 2007
Figure 26: Household consumption of fruit and vegetable juice by Hispanics, by language spoken at home, May 2006-June 2007
Figure 27: Household consumption of fruit and vegetable juice by Hispanics, by number of people in household, May 2006-June 2007
Figure 28: Household consumption of fruit and vegetable juice by Hispanics, by heritage, May 2006-June 2007
Milk, and milk flavorings
Figure 29: Household consumption of milk, by Hispanic origin, May 2006-June 2007
Figure 30: Hispanic household consumption of milk, by nativity, May 2006-June 2007
Figure 31: Household consumption of milk by Hispanics, by language spoken at home, May 2006-June 2007
Coffee and tea
Figure 32: Household consumption of coffee and tea, by Hispanic origin, May 2006-June 2007
Figure 33: Household consumption of coffee and tea by Hispanics, by nativity, May 2006-June 2007
Figure 34: Household consumption of coffee and tea by Hispanics, by heritage, May 2006-June 2007
Carbonated soft drinks
Figure 35: Individual consumption of carbonated soft drinks, by Hispanic origin, May 2005-June 2006
Figure 36: Individual consumption of carbonated soft drinks by Hispanics, by language spoken at home, May 2006-June 2007
Figure 37: Individual consumption of carbonated soft drinks, by heritage, May 2006-June 2007
Other non-alcoholic beverages
Figure 38: Individual consumption of other non-alcoholic beverages, by Hispanic origin, May 2006-June 2007
Figure 39: Individual consumption of other non-alcoholic beverages by Hispanics, by nativity, May 2005-June 2006
THE PEOPLE: ATTITUDES AND MOTIVATION
Important product attributes and considerations in purchasing non-alcoholic beverages
Figure 40: Important product attributes and considerations in purchasing non-alcoholic beverages, by age, January 2008
Influence of marketing and promotions on non-alcoholic beverage purchase
Figure 41: Influencers in non-alcoholic beverage purchase, by age, January 2008
Supermarkets have opportunities to drive growth by increasing penetration
Figure 42: Choice of retail outlets to purchase beverages, by level of acculturation, January 2008
THE PEOPLE: ALCOHOLIC BEVERAGES
Beer
Figure 43: Incidence of personal beer consumption, by Hispanic origin, May 2006-June 2007
Distilled spirits
Figure 44: Incidence of Hispanics’ consumption of distilled spirits and cordials/liqueurs, by heritage, May 2006-June 2007
Figure 45: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by income, May 2006-June 2007
Wine
Figure 46: Consumption of wine, by Hispanic origin, May 2006-June 2007
Figure 47: Consumption of wine by Hispanics, by nativity, May 2006-June 2007
Figure 48: Consumption of wine by Hispanics, by heritage, May 2006-June 2007
Other alcoholic beverages
Figure 49: Consumption of other alcoholic beverages by Hispanics, by nativity, May 2006-June 2007
CLUSTER ANALYSIS
Cluster 1: TV watcher
Cluster 2: Convenience store shopper
Cluster 3: Hispanic store shopper
Cluster distribution and demographics
Figure 50: Hispanics and beverages clusters, January 2008
Figure 51: Hispanics and beverages clusters, by gender, January 2008
Figure 52: Hispanics and beverages clusters, by age, January 2008
Figure 53: Hispanics and beverages clusters, by income, January 2008
Methodology
CUSTOM CONSUMER GROUPS
Traditional Hispanics may rely on family/friend recommendation; but packaging in English can deter sales
Figure 54: Influencers for trying a new non-alcoholic beverage, by level of acculturation, January 2008
Important product attributes and considerations in purchasing non-alcoholic beverages
Figure 55: Important attribute considerations in purchasing non-alcoholic beverages, by level of acculturation, January 2008
Spanish-speaking store associates and bilingual packaging crucial in garnering sales from un-acculturated Hispanics
Figure 56: Choice of retail outlets to purchase beverages, by level of acculturation, January 2008
APPENDIX: OTHER USEFUL CONSUMER TABLES
Fruit and vegetable juices
Figure 57: Household consumption of fruit and vegetable juice by Hispanics, by presence of children in household, May 2005-June 2006
Milk and milk flavorings
Figure 58: Household consumption of milk by Hispanics, by presence of children in household, May 2006-June 2007
Coffee and tea
Figure 59: Household consumption of coffee and tea by Hispanics, by income, May 2006-June 2007
Figure 60: Household consumption of coffee and tea by Hispanics, by language spoken at home, May 2006-June 2007
Figure 61: Household consumption of coffee and tea by Hispanics, by presence of children, May 2006-June 2007
Carbonated soft drinks
Figure 62: Individual consumption of carbonated soft drinks by Hispanics, by nativity, May 2006-June 2007
Figure 63: Individual consumption of carbonated soft drinks by Hispanics, by gender, May 2006-June 2007
Figure 64: Individual consumption of carbonated soft drinks by Hispanics, by income, May 2006-June 2007
Figure 65: Individual consumption of carbonated soft drinks by Hispanics, by presence of children in household, May 2006-June 2007
Other non-alcoholic beverages
Figure 66: Individual consumption of other non-alcoholic beverages by Hispanics, by language spoken at home, May 2006-June 2007
Figure 68: Individual consumption of other non-alcoholic beverages by Hispanics, by gender, May 2006-June 2007
Figure 69: Individual consumption of other non-alcoholic beverages by Hispanics, by presence of children in household, May 2006-June 2007
Figure 70: Individual consumption of other non-alcoholic beverages by Hispanics, by region, May 2006-June 2007
Figure 71: Individual consumption of other non-alcoholic beverages by Hispanics, by age, May 2006-June 2007
Alcoholic beverages
Beer
Figure 72: Incidence of personal beer consumption by Hispanics, by nativity, May 2006-June 2007
Figure 73: Incidence of personal beer consumption by Hispanics, by language spoken at home, May 2006-June 2007
Figure 74: Incidence of personal beer consumption by Hispanics, by gender, May 2006-June 2007
Figure 75: Incidence of personal beer consumption by Hispanics, by income, May 2006-June 2007
Distilled spirits
Figure 76: Consumption of distilled spirits and cordials/liqueurs, by Hispanic origin, May 2006-June 2007
Figure 77: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by nativity, May 2006-June 2007
Figure 78: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by language spoken at home, May 2006-June 2007
Figure 79: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by gender, May 2006-June 2007
Figure 80: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by age, May 2006-June 2007
Wine
Figure 81: Consumption of wine by Hispanics, by gender, May 2006-June 2007
Other alcoholic beverages
Figure 82: Consumption of other alcoholic beverages, by Hispanic origin, May 2006-June 2007
Figure 83: Consumption of other alcoholic beverages by Hispanics, by gender, May 2006-June 2007
APPENDIX: TRADE ASSOCIATIONS