Hispanics and Beverages - US - February 2008

Table of Contents

• Scope and Themes
• What you need to know
• Definition
• Data sources
• Consumer survey data
• Abbreviations and terms
• Abbreviations
• Terms
• Executive Summary
• Hispanics can provide growth--even in high-penetration beverages
• Value and convenience determine Hispanics' retail outlet choices for buying non-alcoholic beverages
• Diversity among Hispanics calls for local marketing strategies
• Acculturation and retro-acculturation--large factor in communicating with Hispanics
• Language remains a barrier between Hispanic consumers and marketers
• Hispanics present growth potential in fruit juice category
• Hispanics continue to drive growth in whole milk category
• Coffee remains the favorite hot beverage for Hispanics
• Hispanics--ideal target population for regular carbonated beverages
• Sports and energy drinks--the biggest growth potential from Hispanic consumers
• Hispanics continue to prefer imported beer over domestic beer
• Hispanic wine consumption differs greatly by demographics
• Targeting specific Hispanic demographics--key to increasing penetration
• Language can be a barrier to new product trials
• An Overview
• The Hispanic population--the fastest-growing minority group; the growth in numbers presents an opportunity for the beverage market
  • Figure 1: Population, by race and Hispanic origin, 2003-13
• Age distribution among Hispanic population bodes well for future growth in the beverage market
  • Figure 2: Young adults aged 18-34, by Hispanic origin, 2003-13
  • Figure 3: Incidence of drinking sports and energy drinks, by ethnicity, May 2006-June 2007
• Income
• Low median income underscores the importance of price promotion and value beverage shopping
  • Figure 4: Labor force participation, by Hispanic origin, 2005
  • Figure 5: Median household income, by race and Hispanic origin, 2006
• Due to the low household income, Hispanics are likely to gravitate towards value shopping
  • Figure 6: Choice of retail outlets to purchase beverages, January 2008
• This underscores the importance of price promotions to attract Hispanic consumers to the beverage aisle
  • Figure 7: Important considerations in purchasing non-alcoholic beverages, January 2008
• Hispanics have high collective purchasing power; reaching a larger base of consumers is crucial for growth
  • Figure 8: Hispanic disposable income, 1990-2012
• Expand consumer base to tap into collective purchasing power
• Hispanics exhibits higher growth in spending on non-alcoholic beverages, compared to non-Hispanics
  • Figure 9: Per capita expenditures on dairy, non-alcoholic beverages and alcoholic beverages, by Hispanic origin, 2005 and 2006
• Country of Origin and Nativity
  • Figure 10: Hispanics, by country of origin/heritage, 2006
  • Figure 11: Consumption of wine by Hispanics, by heritage, May 2006-June 2007
• Nativity creates difference in beverage preferences and purchase behavior
• Native-born Hispanics are likely to mirror beverage preferences and purchase behavior close to the general population
  • Figure 12: Native-born/foreign-born Hispanics, by country of origin/heritage, 2006
• The Hispanic Household
• Hispanics' above-average households will help drive growth in non-alcoholic beverages
  • Figure 13: Households, by presence of children and Hispanic origin, 2006
  • Figure 5: Average household size, by Hispanic origin/race of householder, 2001 and 2006
  • Figure 14: Households, by number of persons in the household--Hispanics vs. non-Hispanics 2006
• Hispanic families shop together; harness children power to drive growth
  • Figure 15: Shopping companion preferences--Hispanics vs. non-Hispanics, May 2006-June 2007
• Culture and Enculturation
• Culture--an important aspect in marketing to Hispanics
• Enculturation, acculturation and retro-acculturation
• Length of residence in the U.S.--an important acculturation assessment metric
  • Figure 16: Personal incidence of drinking carbonated beverages and household incidence of drinking milk, by length of stay in the U.S., May 2006-June 2007
• Language--a key indicator in assessing the level of acculturation of Hispanics
  • Figure 17: Level of acculturation, by language, May 2006-June 2007
• Level of acculturation by region
  • Figure 18: Language Hispanics speak in the home, by U.S. region, May 2006-June 2007
• Geographic Concentration
• Five states account for 68% of the total Hispanic population
  • Figure 19: Hispanic population in top five states, by country of origin, 2006
• Hispanics tend to live in big communities; top ten markets can serve as launch pad for the new beverages
  • Figure 20: Metropolitan areas with the largest number of Hispanic residents, by country of origin, 2006
  • Figure 21: Largest Hispanic Markets, by Hispanic disposable income, 2005
• Hispanic population by four major regions
  • Figure 22: Hispanic population in four regions, by country of origin, 2006
• Innovation and Innovators
• Fruit and vegetable juices
• Milk, and milk flavorings
• Coffee and tea
• Carbonated soft drinks
• Other non-alcoholic beverages
• Beer; new products imitate Hispanic taste palate
• Advertising and Promotion
• Heineken Premium light lager
  • Figure 23: Heineken Premium light lager, 2007
• Jose Cuervo Tequila
  • Figure 24: Jose Cuervo Tequila, 2007
• Smirnoff Ice
• Miller Lite
• Heineken
• Coca-Cola
• The People: Non-alcoholic Beverages
• Fruit and vegetable juices--Hispanic households have potential to drive growth in this segment
  • Figure 25: Household consumption of fruit and vegetable juice, by Hispanic origin, May 2006-June 2007
  • Figure 26: Household consumption of fruit and vegetable juice by Hispanics, by language spoken at home, May 2006-June 2007
  • Figure 27: Household consumption of fruit and vegetable juice by Hispanics, by number of people in household, May 2006-June 2007
  • Figure 28: Household consumption of fruit and vegetable juice by Hispanics, by heritage, May 2006-June 2007
• Milk, and milk flavorings
  • Figure 29: Household consumption of milk, by Hispanic origin, May 2006-June 2007
  • Figure 30: Hispanic household consumption of milk, by nativity, May 2006-June 2007
  • Figure 31: Household consumption of milk by Hispanics, by language spoken at home, May 2006-June 2007
• Coffee and tea
  • Figure 32: Household consumption of coffee and tea, by Hispanic origin, May 2006-June 2007
  • Figure 33: Household consumption of coffee and tea by Hispanics, by nativity, May 2006-June 2007
  • Figure 34: Household consumption of coffee and tea by Hispanics, by heritage, May 2006-June 2007
• Carbonated soft drinks
  • Figure 35: Individual consumption of carbonated soft drinks, by Hispanic origin, May 2005-June 2006
  • Figure 36: Individual consumption of carbonated soft drinks by Hispanics, by language spoken at home, May 2006-June 2007
  • Figure 37: Individual consumption of carbonated soft drinks, by heritage, May 2006-June 2007
• Other non-alcoholic beverages
  • Figure 38: Individual consumption of other non-alcoholic beverages, by Hispanic origin, May 2006-June 2007
  • Figure 39: Individual consumption of other non-alcoholic beverages by Hispanics, by nativity, May 2005-June 2006
• The People: Attitudes and Motivation
• Important product attributes and considerations in purchasing non-alcoholic beverages
  • Figure 40: Important product attributes and considerations in purchasing non-alcoholic beverages, by age, January 2008
• Influence of marketing and promotions on non-alcoholic beverage purchase
  • Figure 41: Influencers in non-alcoholic beverage purchase, by age, January 2008
• Supermarkets have opportunities to drive growth by increasing penetration
  • Figure 42: Choice of retail outlets to purchase beverages, by level of acculturation, January 2008
• The People: Alcoholic Beverages
• Beer
  • Figure 43: Incidence of personal beer consumption, by Hispanic origin, May 2006-June 2007
• Distilled spirits
  • Figure 44: Incidence of Hispanics' consumption of distilled spirits and cordials/liqueurs, by heritage, May 2006-June 2007
  • Figure 45: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by income, May 2006-June 2007
• Wine
  • Figure 46: Consumption of wine, by Hispanic origin, May 2006-June 2007
  • Figure 47: Consumption of wine by Hispanics, by nativity, May 2006-June 2007
  • Figure 48: Consumption of wine by Hispanics, by heritage, May 2006-June 2007
• Other alcoholic beverages
  • Figure 49: Consumption of other alcoholic beverages by Hispanics, by nativity, May 2006-June 2007
• Appendix: Other Useful Consumer Tables
• Fruit and vegetable juices
  • Figure 57: Household consumption of fruit and vegetable juice by Hispanics, by presence of children in household, May 2005-June 2006
• Milk and milk flavorings
  • Figure 58: Household consumption of milk by Hispanics, by presence of children in household, May 2006-June 2007
• Coffee and tea
  • Figure 59: Household consumption of coffee and tea by Hispanics, by income, May 2006-June 2007
  • Figure 60: Household consumption of coffee and tea by Hispanics, by language spoken at home, May 2006-June 2007
  • Figure 61: Household consumption of coffee and tea by Hispanics, by presence of children, May 2006-June 2007
• Carbonated soft drinks
  • Figure 62: Individual consumption of carbonated soft drinks by Hispanics, by nativity, May 2006-June 2007
  • Figure 63: Individual consumption of carbonated soft drinks by Hispanics, by gender, May 2006-June 2007
  • Figure 64: Individual consumption of carbonated soft drinks by Hispanics, by income, May 2006-June 2007
  • Figure 65: Individual consumption of carbonated soft drinks by Hispanics, by presence of children in household, May 2006-June 2007
• Other non-alcoholic beverages
  • Figure 66: Individual consumption of other non-alcoholic beverages by Hispanics, by language spoken at home, May 2006-June 2007
  • Figure 68: Individual consumption of other non-alcoholic beverages by Hispanics, by gender, May 2006-June 2007
  • Figure 69: Individual consumption of other non-alcoholic beverages by Hispanics, by presence of children in household, May 2006-June 2007
  • Figure 70: Individual consumption of other non-alcoholic beverages by Hispanics, by region, May 2006-June 2007
  • Figure 71: Individual consumption of other non-alcoholic beverages by Hispanics, by age, May 2006-June 2007
• Alcoholic beverages
• Beer
  • Figure 72: Incidence of personal beer consumption by Hispanics, by nativity, May 2006-June 2007
  • Figure 73: Incidence of personal beer consumption by Hispanics, by language spoken at home, May 2006-June 2007
  • Figure 74: Incidence of personal beer consumption by Hispanics, by gender, May 2006-June 2007
  • Figure 75: Incidence of personal beer consumption by Hispanics, by income, May 2006-June 2007
• Distilled spirits
  • Figure 76: Consumption of distilled spirits and cordials/liqueurs, by Hispanic origin, May 2006-June 2007
  • Figure 77: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by nativity, May 2006-June 2007
  • Figure 78: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by language spoken at home, May 2006-June 2007
  • Figure 79: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by gender, May 2006-June 2007
  • Figure 80: Consumption of distilled spirits and cordials/liqueurs by Hispanics, by age, May 2006-June 2007
• Wine
  • Figure 81: Consumption of wine by Hispanics, by gender, May 2006-June 2007
• Other alcoholic beverages
  • Figure 82: Consumption of other alcoholic beverages, by Hispanic origin, May 2006-June 2007
  • Figure 83: Consumption of other alcoholic beverages by Hispanics, by gender, May 2006-June 2007
• Appendix: Trade Associations