Today’s Session ▪ Research Overview ▪ Hispanic Consumers ▪ Shopping Habits ▪ Retailer Preference ▪ Hispanics and Dairy 2
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HISPANIC CONSUMERS 4
Hispanic Population Fastest growing ethnic group …will be the 2 nd largest in the U.S. by 2020 16% 21% 27% Source: U.S. Census 5
Hispanic Population …residing in all states across the U.S. 6 Source: U.S. Census
Hispanic Population …growth in all regions of the U.S. 7 Source: U.S. Census
Hispanic Buying Power …U.S. Hispanic buying power has increased 500% since 1990 $1.5 trillion in 2015 …expected to reach $1.7 trillion by 2017* $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 1990 2000 2010 2012 2015 2017* Trillions in U.S. Dollars Source: Statista.com 2016 – via IRI 8
SHOPPING HABITS 9
Hispanic Shoppers …shopping behaviors that drive decisions 1. Like to shop with others 2. Fewer pre-shopping activities 3. Spontaneous and Impulsive 4. Willing to try new products 5. Chooses ‘Fresh’ over ‘Price’ Source: Latinum Hispanic Household Survey 2016 10
Like to Shop With Others …when shopping for groceries, Hispanics prefer to shop with others Hispanic 46% Myself Non-Hispanic 56% Hispanic 33% Spouse/Partner Non-Hispanic 25% Hispanic 25% Children Non 12% Source: Latinum Hispanic Household Survey 2016 11
Influencing Decisions …family members play a big role in making shopping decisions Source: Latinum Hispanic Household Survey 2016 12
Pre-Shopping Behavior …Hispanics practice fewer pre -shopping activities than Non-Hispanic shoppers Hispanic 51% Check my pantry Non-Hispanic 62% Hispanic 31% Refer to a recipe Non-Hispanic 37% Hispanic 19% Check product online Non-Hispanic 21% Source: Latinum Hispanic Household Survey 2016 13
Pre-Shop for Coupons …before shopping, Hispanics clip coupons less often than Non-Hispanic shoppers Hispanic 47% Ad Circulars Non-Hispanic 54% Hispanic 28% Online Non-Hispanic 36% Hispanic 21% Mobile Non-Hispanic 24% Source: Latinum Hispanic Household Survey 2016 14
What Drives Store Visits …Hispanics are more spontaneous shoppers before and during their visit to the store Hispanic 38% On a schedule Non-Hispanic 49% Hispanic 40% For a sale Non-Hispanic 42% Hispanic 30% For an upcoming event Non-Hispanic 23% Source: Latinum Hispanic Household Survey 2016 15
Willing To Try New Items …for Hispanics, trying new items is an important part of the In-Store experience Hispanic 72% Food Items Non-Hispanic 65% Hispanic 58% Non-Alcoholic Beverages Non-Hispanic 43% Hispanic 40% HBC Non-Hispanic 29% Source: IRI Hispaniclink 2016 Study 16
Hispanic Millennials …are even more willing to try new products , especially food and beverage 58% 72% 43% 62% Household 55% Food Cleaning Healthcare Products Non-Alcoholic 53% Beauty Products OTC Beverages Products Medications Beer, Wine & Spirits * Significantly more likely than Non-Hispanics Source: IRI Hispaniclink 2016 Study 17
Freshness beats Price …Freshness wins with Hispanic shoppers Hispanic 33% Freshest products Non-Hispanic 27% Hispanic 16% Lowest cost Non-Hispanic 21% Hispanic 9% Brands I always buy Non-Hispanic 12% Source: Latinum Hispanic Household Survey 2016 18
In-Store and Online Hispanics use their smartphones in- store… but Hispanic Millennials use it at a higher rate 43%* use smartphones in-store while 54% of hispanic millennials use smartphones in-store 51% look for coupons 37% compare retail prices 27% look up recipes *43% of Non-Hispanics also use smartphones in-store Source: Latinum Hispanic Household Survey 2016 19
View Coupons In-Store …Hispanics look for coupons while in -store much like Non-Hispanics Hispanic 60% Retailer Website Non-Hispanic 61% Coupon Hispanic 57% Retailer App Non-Hispanic 55% Hispanic 43% Coupon App Non-Hispanic 50% Hispanic 38% Brand Website Non-Hispanic 39% Source: Latinum Hispanic Household Survey 2016 20
Post-Shopping Behavior …Hispanics engage in social media much like Non-Hispanics 56% 89% 50% 44% 23% 20% 18% Source: Latinum Hispanic Household Survey 2016 21
Post-Shopping Behavior …Hispanic consumers engage with retailers and brands on social media Source: Latinum Hispanic Household Survey 2016 22
BOTTOM LINE Hispanics shoppers make more of their purchase decisions in-store! Source: Latinum Hispanic Household Survey 2016 23
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Multi-Channel Shoppers …like most consumers, Hispanics shop a variety of different retailers Source: IRI Hispaniclink 2016 Study & Innovation Center 25
Walmart Wins on Price …but drug leads with loyalty program 80% 74% 70% 60% 50% 49% 50% 47% 46% 46% 44% 44% 40% 34% 34% 32% 32% 31% 30% 30% 21% 21% 20% 10% 0% Offers good prices Has a good loyalty program Walmart Target Walgreens CVS Dollar General Family Dollar Costco Sam's Club Source: Latinum Hispanic Household Survey 2016 26
Loyalty Card Usage …most Hispanic consumers have loyalty cards and they use them frequently 83 % of Hispanics use Reasons… loyalty cards for using the card In-store savings • Coupons • Gas rewards • For credits / points • Special events • Compared to 57% of all shoppers Source: VozLatinum Loyalty Card Usage Study 2014 27
Walmart Wins on Fresh Hispanics believe Walmart has the freshest products …with dairy ranking highest 80% 71% 68% 70% 59% 60% 55% 54% 54% 52% 48% 50% 40% 30% 20% 10% 0% Offers fresh produce Offers fresh dairy products Walmart Target Costco Sam's Club Source: Latinum Hispanic Household Survey 2016 28
Walmart and Target …rank high in connecting with Hispanic shoppers 70% 62% 58% 60% 50% 46% 43% 41% 41% 38% 40% 36% 30% 20% 10% 0% Is a store for people like me Walmart Target Walgreens CVS Dollar General Family Dollar Costco Sam's Club Source: Latinum Hispanic Household Survey 2016 29
Hispanic Connection …making shoppers feel welcome Regardless of their preferred language, 58% of Hispanics want access to Spanish translations in-store and on product packaging Source: IRI Hispaniclink 2016 Study 30
Prefer Spanish Language …different Hispanics desire different levels of access to Spanish Language Spanish English Speaking Bilingual Speaking 67% lived in US >25 years 49% lived in US >25 years 18% lived in US <5 years 34% of Hispanic population 30% of Hispanic population 36% of Hispanic population Instructions on Package 22% 54% 78% Product Features 23% 54% 75% Ingredients on Package 25% 58% 76% Spanish Signage 13% 38% 61% Source: IRI Hispaniclink 2016 Study & Innovation Center 31
More Dollars per Trip …the in -store experience often drives Hispanics retailer choice On average, Hispanics spend 9% more per shopping trip than Non-Hispanics Source: IRI Hispaniclink 2016 Study 32
Product Choices …Hispanics are less likely to be driven by habit when choosing products 42% of Hispanics are influenced by the “brand they always buy” when choosing products …compared to 60% of Non-Hispanic shoppers Source: IRI Hispaniclink 2016 Study 33
Private Label Perception …not as valued as national brands 78% of Hispanic shoppers believe private label food items are equal to or not as good as national brands Source: IRI Hispaniclink 2016 Study 34
HISPANICS & DAIRY 35
Hispanics and Dairy …dairy consumption is high among Hispanics, who contribute significantly to overall sales Milk 13% of Sales Natural Chees e 12% of Sales Yogurt 12% of Sales Yogurt Drinks 30% of Sales Ice Cream 9% of Sales Source: IIRI Dairy Hispanic Consumption Trends May 2017 36
Hispanics = Milk Growth …driving growth in milk category For the past 10 years, Hispanic consumers drove all of the growth in the milk category Source: Package Facts 2016 & IRI Dairy Consumption 37
Milk Volume vs. YAG …Volume growth for Hispanics exceeded All Volume growth in all channels except Dollar Hispanic Volume 14% All Outlet Volume 10% 9% 5% 4% 4% 1% Mass Club Walmart Grocery Dollar -3% -3% -4% Source: IRI Specialty Panel – All Channels 2017 38 38 38
Milk Consumption …Hispanic households purchasing milk Milk consumption decreases as Hispanics become more acculturated… but, milk consumption remains high for Hispanic children Source: US Dairy 39
Hispanic Kids and Dairy …Top 4 favorite foods for Kids Hispanic kids 86% Pizza Non-Hispanic kids 85% Hispanic kids 73% Cereal Non-Hispanic kids 73% Hispanic kids 68% Dairy Milk Non-Hispanic kids 67% Hispanic kids 65% Yogurt Non-Hispanic kids 60% Source: Whitman Insight Strategies 2016 40 40
Hispanics and Milk …when and why they consume Milk Milk is mostly consumed at home during breakfast Nutritional value is the primary reason for purchasing milk Source: Latinum Multi-Cultural Beverage Consumption 2016 41
Nutritional Value of Milk …Hispanics recognize the nutritional value of Milk based on the following: 90 79% 80 70 58% 60 54% 50 44% 40 30 20 10 0 Calcium Folic Acid Omega 3 Probiotic Source: US Dairy 42 42
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