Hispanic and Latino consumers are an influential shopper demographic with nearly $4 trillion in buying power. But grocers’ bilingual signage and broad “ethnic” aisles aren’t enough to reach these shoppers, sources say.
With the Hispanic and Latino population expected to increase by nearly 6.5 million people by 2028, mainstream grocers are expected to begin expanding into ethnic product lines and offering a more diverse range of goods, Coresight Research noted in a recent report. Rather than limiting international products to a single aisle, grocers will increase brand visibility of these goods, the firm concluded.
Several grocers have started building out well-curated assortments to reach this shopper cohort. Kroger, for example, debuted Hispanic-inspired food and beverage private brand Mercado in late 2023. Last summer, Big Y expanded its Hispanic grocery section when remodeling a store in West Springfield, Massachusetts, adding traditional ingredients from across Latin America, including Brazil and the Caribbean.
But traditional grocers still have a long way to go to fully meet the needs of their Latino customer bases, according to consumer research. Here’s what retailers should know about the U.S. Latino and Hispanic market and how to best meet their shopping needs.
Choosing where to shop
Latino consumers seek out Hispanic grocery stores more than conventional or specialty supermarkets at a rate five times higher than the general population, said Diana Leza Sheehan, principal and CEO of PDG Insights.
In addition, Hispanic shoppers visit an average of six different food retail banners per week, Kymberly Graham, a NielsenIQ representative said during an FMI — The Food Industry Association webinar in October. She added that Hispanic consumers prioritize relevancy over loyalty, as they expect retailers to show up for them and meet their shopping and product needs.
To a “significantly higher” degree than the general population, the most important determinants of a grocery store for Latino shoppers are product quality and the “breadth of assortment” offered, according to Sheehan. A wider assortment from grocers should include goods with proper cultural representation in staple products and fresh offers as well as match a community’s ethnic makeup, she added.
Though a majority of the U.S. Latino population consists of Mexicans and Puerto Ricans, it’s how a grocer caters to specific cultures in their area that makes a difference, she said, adding that this gives independent and regional grocers a leg up over national traditional grocery chains.
“If a store caters to [Latino consumers] intentionally, they are going to choose that store over a national chain any day of the week,” Sheehan said.
The power of young Latino consumers
The shopping preferences of the Latino population are generally magnified when looking at younger generations.
Seventy percent of the U.S. Latino market is under the age of 45, according to a PDG Insights U.S. Latino Pulse Study report, and practicing authentic, accurate cultural representation is one of the most impactful ways to attract and retain younger Latino consumers, Sheehan said.
Latino shoppers aged 18 to 34 consistently say they trust brands that recognize differences in their respective cultures and intentionally choose brands that highlight their culture, according to the PDG report.
Younger Latino consumers place more value on cultural representation
Latino consumers over age 55, on the other hand, put more emphasis on quality than those under age 35, PDG noted.
Though brand recognition and authentic representation drive interest and purchase intent more for Latino consumers, Generation Z and millennial Latino shoppers do not shy away from store brand products. In fact, Latino consumers purchase private label on par with the general population, according to Sheehan.
Across age cohorts, 65% of Hispanic consumers surveyed said store brands are usually on par with national brands and 30% believe that name brand items are worth the additional cost, according to NielsenIQ survey data.
Contrary to popular belief, Latino shoppers are just as drawn to private label goods, if not more, than the general population
“[Latino consumers] are excited to try private label products [and are] significantly more likely to say they’re excited to try new private label products than gen pop consumers,” Sheehan said.
She added that younger Latino consumers are particularly drawn to private label product innovation — an area that is already a high priority for grocers.
Going beyond bilingual signage
While bilingual signage is a start to connect with shoppers, it’s not a foolproof solution for grocers looking to resonate with Latino customers.
It’s a common misconception that Spanish is the best way to reach Latino shoppers, according to the PDG report. While a majority of U.S. Latino households speak Spanish, 80% say they’re bilingual or English-dominant, with most combining English and Spanish in everyday conversation.
In addition, nearly 70% of U.S. Latinos were born stateside, and the later the generation, the less likely they are to speak Spanish at home, per the report’s findings.
Later generations are less likely than previous generations to speak Spanish at home
In the same way that specialty grocers like Sprouts Farmers Market and The Fresh Market highlight natural and organic offerings, grocers should incorporate Latino cultures and foods, Sheehan said, noting that H-E-B already does this well.
Texas-based H-E-B doesn’t shy away from catering to a prominent base of shoppers of Mexican descent, Sheehan said. One example is the grocer’s private label line, Mi Tienda, which was “created to help its consumers make authentic Mexican meals at home,” Sheehan wrote in a blog post.
Like H-E-B, other grocers should look to their surrounding community’s needs rather than stocking their shelves with generic Latino and Hispanic goods, Sheehan said. For instance, Florida is home to a large Cuban population while New York City is home to more Dominicans and Puerto Ricans, per PDG, so an assortment of Mexican products would be fairly moot to those shoppers.
Top 10 states with the highest Hispanic consumer population
Nearly 60% of Latino consumers said they’re willing to spend more on a product or with a retailer that they believe knows them and reflects their values, Sheehan said.
“You don’t have to be an independent retailer — you just have to authentically reach them,” Sheehan said.
