One language, many cultures and a myriad of fruits and vegetables to feed specific customer profiles.
Who is today’s Hispanic shopper? Is she a native Spanish speaker who shops only in Hispanic stores and cooks traditional recipes? Or is she bilingual and serving her family a combination of Latin and American foods? Or is he an English-speaking Millennial who is fully acculturated but wants to maintain his Hispanic food heritage? And how does today’s produce department serve all of them?
Sizeable and Growing
The U.S. Hispanic population is second in size only to Mexico, growing 43 percent between 2000 and 2010 and projected to grow by 86 percent between 2015 and 2050. With rapid growth comes an increase in spending power that could reach nearly $1.7 trillion by 2017, according to Nielsen’s Fresh View of Hispanic Consumers. The median age of the Hispanic population is 27-years-old, with a high percentage of Hispanic shoppers in the Millennial generation.
A Love Of Fruits And Vegetables…And Shopping For Them
Hispanics in the U.S. are more likely than others to enjoy grocery shopping, especially if they have children at home, according to The Why? Behind the Buy U.S. Hispanic Shopper Study, sponsored by Acosta Sales & Marketing (the Jacksonville, FL-based sales and marketing agency serving consumer packaged goods companies and retailers across the United States and Canada) and Univision Communications Inc., a Los Angeles-based media company.
The shopper study compiled by Univision reveals nearly three-quarters of Hispanic shoppers say they enjoy shopping in the produce area of the store and one-quarter note a great selection of produce is one of the most important features of a great grocery store. Twice the percentage of Hispanic shoppers, compared to the percentage of all shoppers, say it’s extremely or very important to have new products in fresh produce.
Nielsen points out the fresh and healthy qualities of the produce department attract the Hispanic shopper because this shopper group displays a passion for food and nutritious dishes made from fresh ingredients.
Acculturation and Generation Drive Trends
The degree of acculturation of the Hispanic American population influences purchasing behaviors in general, and particularly in the produce department. Chicago-based IRI Worldwide segments Hispanics into three groups: Acculturated Hispanics are assimilated into American culture, have the highest median income, and use digital technology; Bicultural Hispanics are bilingual, follow Hispanic traditions, and often purchase products directly marketed to Hispanics; Unacculturated Hispanics, with their limited knowledge of English, are most attracted to products specifically marketed to Hispanics.
Generational differences overlap with degree of acculturation. Millennials (those born between 1980 and 2000) make up a high percentage of the Hispanic population. They tend to be fluent in English; prefer whole, fresh, and “natural” foods; enjoy cooking and learning to cook; are not deal-seekers or coupon-users; and often introduce their non-Hispanic friends to Hispanic foods.
“As second and third generation, Hispanic Millennials may not even speak Spanish,” observes Alfonso Cano, produce manager, Northgate González Markets, Anaheim, CA. “We see a lot of retro culturization and pride in Mexican culture and food in these generations. Every step away from the first generation means losing language and culture, but Hispanics stay connected to their food.” Cano points out, while first generation Hispanics tend to be highly price-sensitive, younger, more acculturated Hispanics look toward quality.
“Retailers have to cater produce to different generations,” says Jin Ju Wilder, director of corporate strategy, Valley Fruit & Produce, Los Angeles. “First generation Hispanic shoppers want to see familiar products. Second and third generation shoppers are more willing to substitute and may not even shop in an ethnic market.”
Third-generation Hispanic Millennials are influenced by the same factors as their non-Hispanic counterparts — specialty, natural, and organic. Carlos Villarreal, international products director of Kansas City-based Associated Wholesale Grocers (AWG), says Hispanic Millennials retain what they like about Hispanic cuisine and gain a mix of other cultural influences in the way they cook and eat.
“Our in-store communications lead in English but are bilingual,” says Stephanie Bazan, Hispanic marketing director, Avocados from Mexico, Irving, TX. Avocados from Mexico targets the young Hispanic female shopper, the “Nueva Latina.”
“The Nueva Latina can move easily between English and Spanish. She uses food, often cooked from scratch at home, as a way to connect with her kids and family and to reinforce tradition and heritage as her family acculturates. Fruits and veggies such as the avocado represent culture.” Bazan also says the family of the Nueva Latina celebrates both U.S. holidays and events and traditional holidays, such as Hispanic heritage festivals.
One Language, Many Cuisines
While a majority of Hispanics in the U.S. is of Mexican heritage, Hispanics from Central and South America share similar cultural influences on shopping behavior. “We Hispanics tend to eat more fruit, mainly tropical, than vegetables, with vegetables in mixed dishes rather than on their own,” says Diana Romano, assistant state specialist — Adults, Community Nutrition Education Program, Oklahoma State University, Stillwater, OK.
Lorena Drago, founder of Forest Hills, NY-based Hispanic Foodways, a consultancy that designs culturally innovative education programs to reduce diabetes healthcare costs, says Hispanics may incorporate vegetables in dishes such as rice with chicken (arroz con pollo), sofrito (a seasoning used in Caribbean cuisine prepared with peppers, tomatoes, onions, cilantro, etc.) and soups; they also eat a lot of salads made from lettuce, lettuce mixes and salad kits.
“On the East Coast, Hispanics tend to come from Puerto Rico, the Dominican Republic, Cuba, and the Caribbean,” says Dick Spezzano, a retail produce expert, Spezzano Consulting Service, Inc., Monrovia, CA. “We often bunch them together, but they’re not the same. Central Americans, for example, eat more yucca and other starchy roots.”
Connie Moro, center store category manager at Food Lion, Salisbury, NC, explains Food Lion stores strive to provide a diverse offering to satisfy the needs of Hispanics of both Mexican and Caribbean heritage. “We currently offer more than 50 items in our produce department that appeal to our Hispanic consumers, from multiple varieties of peppers such as jalapeno, poblano, anaheim and serrano; to vegetables and root vegetables like boniato, chayote squash and jicama; to fruits such as mangos, cactus pears, maradol papayas and avocados.”
Some preferences differ by region, says CeCe Krumrine, merchandiser for several commodity boards, Nashua, NH. “For avocados, the retailers I work with tell me the Caribbean Hispanic customer prefers greenskins over Hass avocados, but this is changing somewhat since greenskins are not always available.”
The cultural blurring of lines presents an opportunity for produce retailers. “It would be helpful to provide information about selection, storage and preparation of various Hispanic fruits and vegetables,” suggests Drago. “A customer from Colombia, for example, may want to purchase an item from another Hispanic country but is uncertain how to prepare it. A cross-cultural education campaign with food demonstrations and sampling may increase sales. Most people will not purchase produce if they don’t know how it tastes or how to prepare it.”
The Top 20 Sell Themselves
What are the top 20 best-selling Hispanic produce items? While lists vary somewhat, they generally include a combination of the vegetables avocado, tomato, potato, mushrooms, carrots, lettuce, onions, chile peppers, white onions, Roma tomatoes, cilantro, chili peppers, and tomatillos, Caribbean root vegetables, and the fruits mangos, bananas, papayas, pineapples, apples, citrus fruit, grapes, and watermelons.
ACNielsen “Target Track” Hispanic service provides a measurement of retail sales for a proprietary client database. The recent data for the 52 weeks ending July 11, 2015 reports salad kits, value-added lettuce products, and green beans are the fastest growing, and that sapote, cactus leaves, hot pasilla peppers, and guava index highest among traditional Hispanic produce. Nielsen Perishables Group’s Fresh Facts Shopper Insights points out, however, that some items – avocados and guavas, for example – are bigger sellers in non-Hispanic stores, and jalapeños and jicama are more popular in Tex-Mex than Hispanic stores.
“The top 20 percent of items tends to sell themselves, because Hispanic shoppers buy them every week,” observes Cano of Northgate González Markets. “So we put our effort into the bottom 80 percent. How do you sell more of those items? Do you raise prices? Put them in an ad? We might not make a bigger display of bananas and tomatoes, but we could try to upsell by locating an 80 percent item such as dinosaur plums on the way to the banana display.” He adds, sometimes the store goes splashy on a 20 percent item, as in its 17-pallet-long “Loco Por Mangos” display with 80,000 pounds of three varieties.
Cross-merchandising helps sell items. Avocados from Mexico suggests displaying avocados next to tomatoes, onions, lemons, limes, or other recipe partners to remind shoppers to buy them. Secondary displays in other parts of the store also drive sales, for example, onions and peppers near the steak case.
Merchandising can attract non-Hispanic shoppers too. The Produce Marketing Association says many Hispanic staple commodities are popular with non-Hispanic shoppers as well. PMA suggests mixing displays featuring unique Hispanic fruits and vegetables, for example, prickly pear, with the more mainstream Hispanic products such as avocado to increase exposure and attract all shoppers. Non-Hispanics who are interested in Hispanic food, coined “Ethnic Explorers” by Nielsen, may be more willing to try, for example, a prickly pear if it is placed next to the Bosc pears.
Celebrty Influences Sales
For the first time, Avocados from Mexico selected a celebrity, professional host, chef, lifestyle expert and mother, Maggie Jiménez as a brand spokeswoman. “Hispanics place a certain amount of importance on celebrity endorsements, especially if they are perceived to be a trusted source for information,” says Hispanic marketing director Bazan.
“We use celebrity endorsements to align with our Nueva Latina target shopper. Our objective is to help educate her, not only on core uses for avocados, but how to select, preserve and ripen an avocado.” Avocados from Mexico also used its spokeswoman to help promote a contest that rewarded social media activity, another distinguishing feature of the Hispanic shopper.
Shopping As A Social Event
Acosta and Univision’s The Why? Behind the Buy found a significant 74 percent of Hispanic shoppers say they enjoy grocery shopping, 16 percentage points higher than total U.S. shoppers, in part, because they turn shopping into a social experience. Shopping offers Hispanic families a way to spend time together, and it is not unusual to see a multigenerational family in the market.
Technology in general, and social technology in particular, is integral to the Hispanic shopping experience. As discovered in The Why? Behind the Buy, almost three-quarters of Hispanic shoppers use technology for grocery shopping, compared to just 60 percent of total U.S. shoppers. Millennials are particularly avid integrators of technology and shopping, using digital shopping lists, sharing information digitally with friends, and responding to social networking, text messages, websites, and email they receive from markets.
Avocados from Mexico capitalizes on the Nueva Latina’s penchant for social media through digital and mobile campaigns to generate awareness and encourage sign-ups to its loyalty club.
“Social media plays a significant role in reaching the Nueva Latina,” says Bazan. “She over-indexes in technology versus the non-Hispanic, specifically in smartphone usage by using her smartphone to connect on a daily basis with her family and kids. She emails, texts, picture messages and accesses the Internet and her social networks. As a result, mobile must be included in any marketing plan. This community is very receptive to offers, promotions and recipes delivered via social platforms.”
Avocados from Mexico created a community of 350,000 Hispanics on its Facebook page in less than 9 months.
Every Community is Different
Retail giant Wal-Mart sustains a community-based approach that allows each store to tailor its inventory to its shopper base. “We call it the ‘Store of the Community,’” explains John Forrest Ales, Wal-Mart spokesman, Bentonville, AR. “We go aisle by aisle and item by item based on what a store’s shoppers request. Produce comes and goes based on cultural holidays and regional celebrations.”
Ales notes produce department staff changes displays to align with what customers are looking for. Store personnel, chief merchants, and the home office work together to determine the product mix. Bilingual signage is available as needed but is not used in every store with a Hispanic shopper base.
“We offer popular items, such as peppers, in our stores, and the selection doesn’t differ too much from store to store,” says Chris Jacoby, director of produce, Southwest division for Bellingham, WA-based Haggen, Inc. “But our stores have the autonomy to expand a display and adjust pricing to meet demand. For example, our store in San Ysidro, on the California/Mexico border, has a very large Mexican/American shopper population. The store runs ads in Spanish and English, and suppliers provide tie-ins to Mexican holidays.”
Produce departments can do a lot to reach shoppers, from “signs in Spanish to arranging fruits and veggies in a colorful way, to selling produce in packs of four or five — making it easier to spot and buy,” says Oklahoma State’s Romano. “What might not work, however,
is marketing organic. Hispanics are used to eating natural produce and many don’t know what organic means, so it’s not important
Small Chains and Independents Stand Out
“Hispanic merchants do a better job than the national chains do of catering to Hispanic shoppers,” says Spezzano. “An Hispanic owner might eliminate one or two full aisles of groceries, cut down the size of the floral section, and then give the extra space to produce. Many stores reduce variety but present items in bigger displays at lower prices.”
Spezzano notes the more traditional stores catering to less acculturated shoppers do not stock a lot of value-added produce, because it is more expensive and doesn’t appeal to shoppers who are accustomed to preparing food themselves. Displays of value-priced produce typically greet shoppers as they enter the market, with popular items that are ready-to-eat, modest size, utility grade, and positioned for rapid turnover. Less variety and lower pricing means more rapid turnover.
However, with acculturation and younger shoppers come changes in Hispanic markets. “Hispanic markets are trying to differentiate themselves from each other to attract this younger shopper,” says Wilder of Valley Fruit & Produce. “Maybe the store hires a dietitian or adds a focus on healthy lifestyle. Still, shoppers can walk in and know they are in a Hispanic market because of the tropical fruit displays.”
Carlos Villarreal of AWG says changes in focus accelerated in recent years and even recent months. When Solvang, CA-based El Rancho Market joined AWG in 2012, Villarreal explains the the two-store operation looked more at the cost of items than at the quality. “During the past six or seven months, we noticed our members are putting more emphasis on quality. They realize we compete with national chains such as Albertsons, Kroger, and Tom Thumb for a more educated, sophisticated shopper. Those chains emphasize quality, in addition to natural and organic, so we need to do the same.”
The Price is Ripe
“What hasn’t changed in marketing produce to Hispanics is that fruit has to be ripe and ready-to-eat,” says Wilder. “To manage pricing, some stores will sell a high quality but smaller size fruit.” Valley Fruit & Produce ripens fruit at its facility.
So does Northgate González Markets. “Since Hispanics often shop several times a week, they want ripe fruit. And we sell a lot of it. That is a huge selling point for us. We play to win on ripeness. We do not worry about what we might lose to shrinkage, instead we focus on how much more we can sell by merchandising ripe and ready-to-eat fruits.”
The Health Connection
arketing to Hispanic shoppers. The Irvine, CA-based Hass Avocado Board (HAB) recently joined the Alexandria, VA-based American Diabetes Association in marketing the national Stop Diabetes movement to Latinos, a community with a high incidence of diabetes. “The fresh Hass avocado industry is proud to be the first whole food to nationally partner with the American Diabetes Association in the battle to stop diabetes,” says Emiliano Escobedo, executive director, HAB.
“Our campaign includes website support, social media messaging, and recipe cards that will be available in stores that sell Hass avocados.” Escobedo says HAB also is working with Northgate González Markets on health programming for its employees, a win-win in terms of helping to improve employee health and empower produce department employees as health influencers.
Brokers and Suppliers Monitor Trends
“As a supplier, we monitor trends by visiting stores, talking to store buyers, and meeting with owners, and then we put together a strategy,” says Wilder. “Store owners mandate the changes for their produce departments. Southern California is saturated with Hispanic stores; so, just like mainstream markets are trying to attract Hispanic shoppers, Hispanic stores are appealing more to mainstream consumers. They’re changing signage, giving stores a more upscale feel, and increasing the sizes of the fruits they carry.” Wilder also sees crossover between Asian and Hispanic markets, because both ethnic groups value fresh produce. In addition to Hispanic employees in Asian-owned stores — a growing number of Hispanics shop in Korean markets — she notes Hispanic stores are adding Asian employees to help connect them with Asian shoppers.
“We carry a full line of Hispanic and tropical fruits and vegetables, with the exception of bananas,” says Stephanie Katzman, executive manager, S. Katzman Produce, Bronx, NY. “Because we import directly, we can be more competitive on price.” S. Katzman supplies a range of customers from small mom-and-pop bodegas to mid-level independents, big chains, and higher-end grocers such as DeCicco in Westchester County, NY, and Agata & Valentina in New York City. “We market by looking at the location of our customers, considering the shoppers living in the area of each store, and we select items that are likely to move well in those neighborhoods. We offer a staff expert to our customers who merchandises and advises stores on displays based on variety, color, and product placement relative to other items in the produce department.”