Hispanics and Non-alcoholic Beverages - US - December 2017

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
Overview
Figure 1: Share of expenditures on non-alcoholic beverages, by segment and Hispanic origin, at current prices, 2017
The issues
Trial occasions may not happen naturally
Figure 2: Hispanics’ attitudes toward trying new beverages, September 2017
Family likes and health benefits don’t appeal to the same Hispanics
Figure 3: Factors Influencing Hispanics’ non-alcoholic beverages purchases – family likes and health benefits, September 2017
Concerns about sugar content and price can hinder further growth
Figure 4: Non-alcoholic beverages purchase barriers for Hispanics, September 2017
The opportunities
Associating brands with specific meal occasions
Figure 5: Correspondence analysis – Association of beverages and occasions, September 2017
Leveraging the social component
Figure 6: Influencers for Hispanics’ non-alcoholic beverages purchases – Thinking of others, by gender and age, September 2017
Leveraging the health component
Figure 7: Influencers for Hispanics’ non-alcoholic beverages purchases – Health claims, by gender and age, September 2017
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Hispanics spend $16.6 billion on non-alcoholic beverages
Expenditures growth is driven by bottled water
Flavor matters to Hispanics
Health is important, but Hispanics are keeping it simple
Hispanics tend to have larger families
Hispanics are young
Hispanics are value-oriented
Hispanics have 20 countries of origin
MARKET SIZE
Hispanic share of expenditures on non-alcoholic beverages is growing
Figure 8: Hispanic consumer expenditures on non-alcoholic beverages, at current prices, 2012-17
MARKET BREAKDOWN
Bottled water and other beverages driving growth
Figure 9: Hispanic consumer expenditures on non-alcoholic beverages, by segment, at current prices, 2012-17
Figure 10: Hispanic consumer expenditures on non-alcoholic beverages, by segment, at current prices, 2015 and 2017
MARKET PERSPECTIVE
The importance of flavor
The carbonated soft drinks example
Figure 11: Beverages consumed to replace soft drinks, by race and Hispanic origin, indexed to all, December 2016
The energy drinks example
Figure 12: Energy drinks drinking motivation, by race and Hispanic origin, indexed to all, February 2017
When thinking about health, Hispanics are pragmatic
Figure 13: Motivations for drinking water, by race and Hispanic origin, indexed to all, November 2016
MARKET FACTORS 
Larger families hint at a more complex dynamic
Figure 14: Average household size, by race and Hispanic origin, 2016
Figure 15: Households with related children, by race and Hispanic origin of householder, 2016
The Hispanic market is young
Figure 16: Population distribution, by Hispanic origin and generation share, 2017
Lower median household income forces Hispanics to search for value
Figure 17: Median household income, by race and Hispanic origin of householder, 2015
Figure 18: Household income distribution, by race and Hispanic origin of householder, 2015
Hispanics’ country of origin/descent includes 20 countries
Figure 19: Hispanic population, by country of origin/heritage, 2015
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Distribution can be key to grow
Tropical flavors can get Hispanics’ attention
Staying relevant
Brands from Latin America struggle to grow appeal
Some categories may introduce private labels to Hispanics
The convenience of vending machines
The meaning of ingredients
Flavor and met expectations
WHAT’S HAPPENING?
For some categories, it’s all about distribution
Figure 20: Brands of non-carbonated bottled water that Hispanics drank in the past 7 days, by region, April 2016-May 2017
Tropical flavors can resonate with Hispanics
Figure 21: Flavors of fruit juice or drinks that Hispanic households drink, indexed to all, April 2016-May 2017
Leveraging brand equity
Brands from country of origin
Private labels to set a foot in the house
Figure 22: Reasons for purchasing more private label products, by race and Hispanic origin, indexed to all, November 2016
WHAT’S NEXT?
An increasing focus for on-the-go
An increasing focus on ingredients
Despite the noise, it all goes back to flavor
THE CONSUMER – WHAT YOU NEED TO KNOW 
More Hispanics increased their purchases of non-alcoholic beverages than decreased
Hispanics enjoy trying new beverages, but are okay with current options
Family likes and health benefits are important
Hispanics clearly associate beverages with different meal occasions
Hispanics show flexibility when thinking about non-alcoholic beverages
Price and sugar content are the main purchase barriers
CHANGES IN NON-ALCOHOLIC BEVERAGES PURCHASES 
Hispanics feel they are purchasing about the same or more
Figure 23: Hispanics’ non-alcoholic beverages purchases and change over the past year, September 2017
Bottled water
Figure 24: Hispanics’ perceived change in bottled water purchases over the past year, by key demographics, September 2017
Dairy milk
Figure 25: Hispanics’ perceived change in dairy milk purchases over the past year, by key demographics, September 2017
100% fruit juice
Figure 26: Hispanics’ perceived change in 100% fruit juice purchases over the past year, by key demographics, September 2017
Tea
Figure 27: Hispanics’ perceived change in tea purchases over the past year, by key demographics, September 2017
Juice drinks
Figure 28: Hispanics’ perceived change in juice drinks purchases over the past year, by key demographics, September 2017
Coffee
Figure 29: Hispanics’ perceived change in coffee purchases over the past year, by key demographics, September 2017
Regular soda
Figure 30: Hispanics’ perceived change in regular soda purchases over the past year, by key demographics, September 2017
Sports drinks
Figure 31: Hispanics’ perceived change in sports drinks purchases over the past year, by key demographics, September 2017
Diet soda
Figure 32: Hispanics’ perceived change in diet soda purchases over the past year, by key demographics, September 2017
Figure 33: Hispanic consumption of regular soda and diet soda – Coca-Cola and Pepsi products, April 2016-May 2017
ATTITUDES TOWARD TRIAL OF NON-ALCOHOLIC BEVERAGES
Trying is nice, but it is not a must
Figure 34: Hispanics’ attitudes toward drinking non-alcoholic beverages, September 2017
Moms more likely to be influenced by family
Figure 35: Hispanics’ family influence in the beverages they purchase, by household income and level of acculturation, September 2017
More affluent Hispanics tend to be audacious mixing beverages
Figure 36: Share of Hispanics who like to experiment mixing non-alcoholic drinks, by household income and level of acculturation, September 2017
PURCHASE INFLUENCERS
Not all Hispanics have the same priorities
Figure 37: Factors Influencing Hispanics’ non-alcoholic beverages purchases, September 2017
Flavor is the path of least resistance
Figure 38: TURF analysis – Non-alcoholic beverages purchase influencers, September 2017
Figure 39: TURF analysis – Non-alcoholic beverages purchase influencers, September 2017
Hispanic women more likely to think about others’ likes
Figure 40: Influencers for Hispanics’ non-alcoholic beverages purchases – thinking of others, by gender and age, September 2017
Need to please others decreases with acculturation
Figure 41: Influencers for Hispanics’ non-alcoholic beverages purchases – thinking of others, by level of acculturation, September 2017
Health claims more likely to influence Hispanic women aged 35+
Figure 42: Influencers for Hispanics’ non-alcoholic beverages purchases – Health claims, by gender and age, September 2017
All-natural/organic claims are welcomed—budget permitting
Figure 43: Importance of all-natural/organic claims in Hispanics’ non-alcoholic beverages purchases – Health claims, by household income and level of acculturation, September 2017
ASSOCIATIONS OF BEVERAGES AND OCCASIONS
There is value in associating drinks with meals
Figure 44: Share of Hispanics who think that the right drinks are key to enjoying meals, by gender and age, September 2017
Figure 45: Share of Hispanics who think that the right drinks are key to enjoying meals, by household income and level of acculturation, September 2017
Hispanics clearly associate specific beverages with specific meal occasions
Figure 46: Correspondence analysis – Association of beverages and occasions, September 2017
Who is driving associations
Breakfast
Lunch and dinner/supper
Snacks
Figure 47: Association of beverages and occasions, September 2017
ATTITUDES TOWARD NON-ALCOHOLIC BEVERAGES
Hispanics are pragmatic about non-alcoholic beverages
Figure 48: Hispanics’ attitudes toward non-alcoholic beverages, September 2017
Are Hispanics willing to pay for premium beverages?
Figure 49: Hispanics’ attitudes toward premium non-alcoholic beverages, by household income and level of acculturation, September 2017
Is tap water a competitor?
Figure 50: Hispanics’ attitudes toward tap water, by household income and level of acculturation, September 2017
PURCHASE BARRIERS
Price and sugar content discourage trial
Figure 51: Non-alcoholic beverages purchase barriers for Hispanics, September 2017
Too much sugar can raise flags
Figure 52: TURF analysis – Purchase barriers, September 2017
Figure 53: TURF analysis – Purchase barriers, September 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
TURF analysis methodology
A note on acculturation
APPENDIX – THE MARKET 
Figure 54: Hispanic consumer expenditures on non-alcoholic beverages, at inflation adjusted prices, 2012-17
APPENDIX – THE CONSUMER
Figure 55: Brands of regular soda drinks that Hispanics drank in the past 7 days, by Hispanic origin and language spoken at home, April 2016-May 2017