Hispanic Gen Y and Gen Z Food Culture Collides With Macro Trends

August 12th, 2017

Macro Food Trends Are Closely Tied to Hispanic Food Culture

Organic, locally sourced, natural, sustainable, Non-GMO, fresh, and socially responsible are all macro food trends that resonate loudly with consumers under 35, and Hispanics are no exception.

In fact, according to The Hispanic Millennial Project study by Sensis Agency and Think Now Research, over half of Hispanic Millennials believe it is “very important/somewhat important” that the food and beverages meet macro trend criteria. Hispanics are willing to pay up to $4.89 or 22% more for a more natural product that would otherwise cost $3.00, according to the same study.

Younger Hispanics’ tendency to place importance on natural and fresh foods is not surprising given how closely tied these food characteristics are to their food culture of heritage. We could say that “fresh and natural” and otherwise “clean” foods are really not a trend among Hispanics at all, but rather a culturally-driven orientation.

Hispanics are Impacting Food Choices of Younger Consumers at Large

In general, as younger generations’ orientation to being green and socially responsible grows, it will continue to fuel a greater orientation to fresh and natural foods. And, NPD Group expects that the tastes and choices of U.S. Hispanics, which make up a large percentage of Millennials and Gen Z, will continue to grow in importance over the next five years significantly impacting what consumers at large buy and eat.

Non-Hispanics’ affinity to Hispanic foods is driven by a perception that Hispanic foods are more healthful because the cuisine emphasizes legumes, fruits, vegetables, herbs and ancient grains.  The NPD Group confirms that as younger Hispanics continue to observe food traditions of their culture, they are influencing all Millennial and Gen Z’s eating patterns, reinforcing interest in buying fresh and natural foods and cooking from scratch.

Fresh and Scratch Cooking on the Rise

Between 2003 and 2013 fresh foods saw a sales increase of 20%. NPD predicts that between 2013 and 2018, we’ll see an increase in fresh food sales of 11% for Gen Z and 7.5% for Millennials, far outpacing their respective shares of the population change (2% and 2%, respectively).

Interestingly, Gen Z is shaping up to have an even greater orientation to fresh food and cooking from scratch. Simmons National Consumer Teen Study indicates that 56% of Hispanic Gen Z goes grocery shopping; 46% say they typically grocery shop with their parents; and they focus on the perimeter of the store, meaning they are influenced by parents’ choices – many of whom are Millennials.

NPD forecasts that between 2013 and 2018, we’ll see an increase of 6% for Gen Z and 5% for Millennials consuming meals prepared from scratch and an increase of 11% for Gen Z and 8% for Millennials consuming meals using fresh products. They also report that top foods purchased/consumed by Gen Z include fresh chicken, eggs/omelets, potatoes, fresh bananas, fresh apples, fresh carrots, and bacon.

By all accounts, the growth trend for fresh and scratch cooking is on a steady course with Hispanic Millennials and Gen Z aligning closely with their non-Hispanic cohorts on this front.

Younger Hispanics’ Food Choices Remain Strongly Rooted in Culture of Heritage

One might think that as most Millennials and Gen Z Hispanics were raised or where born in the U.S., their Hispanic food traditions would have weakened as they adopt more mainstream food habits and that they would be less influenced by their culture when they shop and cook.  However, this is far from the truth irrespective of place of birth. Hispanic culture is not fading among younger generations. According to Univision, 96% of Hispanic Millennials say they will never stop doing things that are part of their heritage.

As it turns out, 73% of U.S.-born and 71% of foreign-born Hispanic Millennials say heritage and cultural background drive the food and beverage brands they buy and 80% of Hispanic Millennials with incomes higher than $40K agree according to The Hispanic Millennial Project report. Additionally, 56% of U.S born Millennials agree with the statement, “I use/buy ethnic brands of food and beverages” according to the Hispanic Millennial Project report.

When asked how often Hispanic Millenials cook from scratch in a given week, 78% of U.S.-born and 86% of foreign-born Millennials said they cook at home once a week or more, often according to The Hispanic Millennial Project report.

Most important of all, the NPD report It’s Mealtime with Hispanics indicates that Hispanic Millennials are just as likely as total Hispanics to say they always or often follow tradition when planning and serving meals at home.

The NPD report shows heavy use of stove top versus microwave and oven use among Hispanic Millennials compared to Non-Hispanic Millennials as further evidence of scratch cooking dominance.

Hispanics’ Top Food Choices

Looking at the top 15 meals and meal components consumed at home among Hispanic and Non-Hispanic Millennials, it is clear to see how in home food orientations differ.

Regardless of language dominance, Hispanic Millennials are more likely than non-Hispanic Millennials to choose fruit, bread, salads, rice, Hispanic dishes, poultry, eggs, soup, homemade dishes and tortillas as top meals and meal components.

Non-Hispanic Millennials are more likely than Hispanic Millennials to choose vegetables and legumes, RTE cereal, sandwiches, salty snacks and potatoes for their in home meals.

The Bottom Line

While the majority of Millennials and Gen Z Hispanics are mostly U.S. born and speak English, their food traditions remain strongly rooted. Food manufacturers wanting to attract them must develop a full understanding of what this means. This includes their natural inclination for fresh and scratch cooking and for the flavor profiles of heritage to which they remain connected. That said, their adventurous side should be considered as they are still a product of their generations.

Given Hispanics’ steadfast adherence to their food of culture, it is not surprising that sales of Hispanic foods (excluding frozen) are expected to increase by 7% over the next five years among Hispanic Millennials, according to The NPD Group.

This said, non-Hispanic Millennials’ appetite for Hispanic foods continues to grow and sales of Hispanic foods and beverages are expected to reach $10.7 billion in 2017, up 31% from the present market level.

Manufacturers who want to leverage these generations’ love for Hispanic food, including among non-Hispanics, would do well to lead with Hispanic flavors and textures as innovation drivers. This is where the greatest upside growth opportunity exists.

Hispanic Millennials like variety and like to explore new flavors and will surely view new flavors and textures as different and appealing.

Terry Soto is a Hispanic market strategist and CEO of About Marketing Solutions Inc. For  25 years, Terry has consulted for best in class Fortune 1000 companies in the U.S. and Internationally. Clients have included ALDI Supermarkets, August Storck KG, Verizon Wireless, H&R Block, Walgreens, CVS Pharmacy, Disney Theme Parks, Autozone, Citibank, El Pollo Loco restaurants.

Terry partners with top executives to accelerate Hispanic market revenue growth and drive overall business performance. Known for being bold, straight-forward and persuasive, Terry is sought out by business leaders who need her expertise to accelerate results. Terry is constantly interviewed and quoted by business and trade media and is frequently engaged to speak to executive groups across the country. Terry can be reached at terrysoto@aboutmarketingsolutions.com or 818-842-9688.

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“Total Market” – Still Misunderstood By Marketers

July 18th, 2017

I just spent three days at the Multicultural Retail 360 Summit in Anaheim, California where I was invited to MC for a day. A new and fun experience for me! The conference agenda was solid and the speakers were great! But here’s the thing that caught my attention. Total Market is still a misunderstood concept.

As much as Total Market was discussed during the sessions, companies are still confused and speak to multiple definitions of Total Market, and they question its value, purpose and how it should be executed.

Integration, Total Market’s predecessor is a topic I cover extensively in my book, Marketing To Hispanics – A Strategic Approach To Assessing And Planning Your Initiative.

In my book I explain the premise behind integration as taking a company’s stated growth platforms and acknowledging that the company’s highest potential targets vis-à-vis its growth platforms likely include non-Hispanic whites, Hispanics, Asians, African American and other ethnicities and nationalities who fit specific consumption, attitudinal and lifestyle profiles given a brand’s positioning.

Stakeholders would then consider these racial, ethnic and cultural backgrounds as they think, plan and implement solutions relevantly across every area in the company that plays a role in the creation and production of the products and services, how these products and services are made available in the marketplace, how consumers are serviced pre, during and post purchase across all channels and how the company communicates its offerings – marketing.

Stakeholders would also work to align and coordinate back-end operations which support the delivery of its products and services, including human resources, suppliers, infrastructure, customer service centers, and reporting.

Total Market is no different. And, it is not a concept that only applies to marketing communications, it is a way of doing business which must be applied more broadly to how a company organizes to operate more relevantly.

Total Market does not mean a brand is all things to all people as I heard some folks say in disapproval. It is not about finding the common denominator marketing insight at the expense of more engaging cultural insights as some marketers have adopted it. It is not about creating one size fits all marketing communications that reaches all target consumers in the same way in order to create efficiencies in agency services and production.

Total Market is about creating alignment within an organization so a company’s go-to-market strategy is optimized for relevancy among its target consumers in context with how a target normally interacts with a category and how it fits in targets’ lives.

This type of alignment requires some organizational and operational optimization (yes, change). It also still requires leveraging diverse target insights to plan and implement dedicated marketing efforts based on what is most engaging to each cultural sub-segment under an umbrella consumer target and strategy.

In my view, the concept of Total Market, is meant to advance companies from a homogenous to a global consumer view within our own borders because this is the reality of the U.S. consumer market today. The U.S. consumer market is far from the way it used to be even just 5 years ago.

If companies want growth in today’s increasingly diverse shopper environment, companies must evolve their thinking and approaches. Today, it’s simply counterproductive and unprofitable to think that anything but a Total Market approach will place companies on an accelerated growth path.

Terry Soto is President and CEO of About Marketing Solutions, Inc., a Burbank, California – based strategy consulting firm specializing in helping her clients to dramatically improve overall business performance by optimizing their strategies to also succeed in today’s diverse U.S. market. Terry is the author of Marketing to Hispanics and Strategic Approach to Planning and Implementing Your Initiative and co-author of Grow With America Best Practices in Ethnic Marketing and Merchandising. She is a contributor to a variety of trade publications and is a frequent speaker at industry conferences. Terry can be reached at terrysoto@aboutmarketingsolutions.com or 818-842-9688.

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Infrastructure Alignment is Fundamental to Delivering Growth

March 24th, 2017

By Terry Soto, Author and CEO, About Marketing Solutions, Inc.

Some of us use the terms infrastructure and organizational structure interchangeably. In this blog, I will use the word infrastructure to refer to technology platforms and digital assets. There is a myriad of technology, information systems and digital assets on which your companies rely to operate your businesses. However, given the diverse customer base which shop your products you must ask if your infrastructure is optimally aligned to support your goals across all customers Hispanic and non-Hispanic regardless of language preferences. Consider the various ways in which your company relies on its infrastructure and determine if your company has created the necessary alignment to:

  • Generate reporting – For companies who target Hispanics, it’s important to ask if your company’s Information Systems are aligned to deliver on the company’s information needs on all your customer including your Hispanic customers. Are you able to track sales, segmentation, demographic, geographic, product categories, usage and other behavior your Hispanic customers may exhibit so appropriate decisions can be made in a manner that is relevant to your Hispanic customers and relevant to your business model?
  • Communicate with customers – Ask if your Information Systems are set up to effectively communicate important information bilingually so your Hispanic customers understand your letters, forms, brochures, user guides, warranties, rebate forms, and statements the way your company intended. Ask if your current methods effectively communicate with Hispanic recipients and whether they truly understand your messages, the intended level of urgency, the action that is required of them, by when, and where and how the action needs to be taken.
  • Drive cost away from your business by using technology to automate activities which would otherwise be handled by people – Ask if your company’s technology and digital assets support a quick and comfortable transition and adoption of automation so Hispanics grow less dependent on people and more dependent on your technology to shop your products, ask tech support questions, send emails, chat with customer service representatives and even make payments in automated ways. If Hispanic customers do not understand the purpose of that fabulous kiosk your company just installed in all your locations and can’t understand the screens, it might as well just be a fabulous piece of store décor as far as Spanish dependent Hispanics go and the phone will keep ringing for live support.
  • Enhance the shopping experience for our customers and drive sales through the digital assets you have in your locations – If every piece of technology with which you want your consumers to interact to browse your products, and help customers fall in love with your experience so they ultimately buy is not understood by a proportion of your Hispanics customers, they simply won’t engage and your digital assets won’t work across those Hispanic customers who are excluded from utilizing and enjoying these digital experiences.

Take a few moments to assess the many ways in which your company relies on infrastructure to 1) understand your customers so you can make better decisions, 2) communicate with them, 3) drive cost away from the business and 4) enhance the shopping experience and ask if you are having the same effect on your current and potential Hispanic customers. If not, ask yourself why you’d want your infrastructure investment to perform at anything less than 100% and why you would want to deliver anything but a seamless customer experience.

Terry Soto is President and CEO of About Marketing Solutions, Inc., a Burbank, California – based strategy consulting firm specializing in helping her clients dramatically improve overall business performance by optimizing their strategies to succeed in the Hispanic market. She can be reached at terrysoto@aboutmarketingsolutions.com or 818-842-9688.

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Why Total Company Involvement Is So Critical To Effective Alignment and Results

March 18th, 2017

Terry uses a recent client experience to explain that marketing insights are great, but true team involvement is the only catalyst to real and substantive action towards a sustainable Hispanic market strategy that support the company’s overall goals and priorities.

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Are You Going Against the Corporate Tide

February 26th, 2017

By Terry Soto, Author and CEO, About Marketing Solutions, Inc.

This week I presented a webinar entitled, Is Hispanic Strategy Still A Separate Initiative? Here’s How to Create Strategic Alignment That Makes Good Business Sense. I wanted to begin this year’s webinar series with a topic that I sensed continues to challenge most Hispanic marketers. Suffice it to say, registration numbers where the highest of any webinar I’ve hosted in the last 15 years.

Here’s the crux. In spite of the fact that as an industry of Hispanic marketers we’ve become very sophisticated in our methods and resources, we’re still stuck in a time warp. What do I mean by this? We continue to focus on US, what WE do well, what WE need and what the Hispanic market needs instead of focusing on our clients’ companies or the companies where we own responsibility for Hispanic Marketing and where we’re responsible for contributing to OVERALL growth.

I know this because, in my consulting work I’m engaged in ongoing conversations with the very high level folks who typically hire me, a team of 20-30 folks in different parts of the company, the Multicultural Managers (MC Managers) and their respective Hispanic agency counterparts.

The common theme in conversations with the MC Manager and their Agencies is the feeling being marginalized. Feeling like they’re not a part of the high level strategic conversations. Feeling like order takers. Not having the attention or the support they need from the rest of organization. And the ever recurring concern that Hispanic marketing is an afterthought.

From client leadership, I hear “Our agency is not strategic. They don’t bring us the strategic solutions.” Or worse, “Our agency or MC Managers understand Hispanics but they don’t understand the business.” Or “We don’t think what we’re doing in the Hispanic market is in sync with where the company is focused or headed.” I’ve even heard client leadership call their agencies and MC Managers self-absorbed and self-serving.”

There is clear misalignment between those who drive business results, agency partners and MC Managers. I’ve propose to agencies and MC Managers that they immediately refocus and broaden of their thinking so they think about and speak to the business not just the Hispanic plan. I’ve cautioned that if the current focus and conversation is maintained, agencies and MC Managers will continue to be marginalized and pigeon holed into the realm of advertising and promotions execution and will find it difficult to be considered valuable partners in growing the business in a way the company values.

Here’s where I believe the misalignment exists.

Consider that Hispanic Market Strategy is not synonymous with Hispanic Marketing (which is where many of us focus) and beyond this, Hispanic Marketing, which technically includes product, price, promotion and place is not synonymous with just advertising and promotion (which again, is where many of us focus).

Much of what we call Hispanic Market Strategy (and I use the term “strategy” loosely) are really communication strategies (P for Promotion). To make matters worse, while brilliantly planned and executed, many of these communication efforts are conceived first and foremost with the Hispanic market in mind RATHER than with the companies’ business goals and strategic direction as context.

As a result, our “Hispanic Market Strategies” are often out of alignment with our companies’ or clients’ strategic imperatives which by the way, is where companies’ resources and attention will be laser focused. And THIS is the main reason most Hispanic efforts remain separate, disconnected, underfunded and are the first to be cut when budgets are reduced.

A Hispanic Market Strategy cannot exist separately from the corporate strategy. It is born first and foremost from the goals and strategic imperatives a company has identified to achieve growth this quarter, next quarter and the following.

Developing an aligned Hispanic Market Strategy is about recognizing and heeding the company’s strategic direction and optimizing existing strategies to be effective among Hispanics across the organization structure, operations, infrastructure and marketing. There should be no such thing as a Hispanic Market Strategy that doesn’t follow from this premise.

This focus and conversation is what creates cohesiveness, collaboration and engages management’s full attention and financial support. It’s not enough to be culturally relevant, you must be business relevant first.

Terry Soto is President and CEO of About Marketing Solutions, Inc., a Burbank, California – based strategy consulting firm specializing in helping her clients dramatically improve overall business performance by optimizing their strategies to succeed in the Hispanic market. She can be reached at terrysoto@aboutmarketingsolutions.com or 818-842-9688.

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