The U.S. Market for Hispanic Food: Volume 1 in the series

Scope of This Report

Report Methodology

The Market

• Market Definition
• Hispanic Population Growth
• Hispanic Purchasing Power
• Buying Power of Hispanic Consumers
• Regional Distribution of U.S. Hispanic Population
• The Broader Market for Mexican and Hispanic Foods
• Figure 1-1: U.S. Total Retail Sales of Mexican Foods (in millions), 1998-2002
• U.S. Retail Sales of Mexican Foods By Category, 1998-2002
• Mexican Sauces
• Frozen Foods
• Refrigerated Tortillas
• Juices
• Tortilla Chips
• Consumer Patterns
• Household Usage Rates by Racial/Ethnic Origin
• Consumption Trends
• Use of Mexican Foods by Age Group
• Projected U.S. Retail Sales of Hispanic Foods, 2003-2007

Competitive Situation

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• Hispanic Food as an Investment Opportunity
• Major Mainstream Players
• Leading Specialists
• From Mexico to Mainstream
• Frozen Food Specialists
• Private-Label Power
• Overall Category Shares of Mexican-Food Brands
• Figure 1-2: Market Share (as Dollar Share) in Hard/Soft Tortillas/Taco Kits, Based on U.S. Sales in 2002
• Subcategory Shares
• Hard/Soft Tortilla/Taco Kits
• Mexican Food Items
• Refried Beans
• Mexican Sauces
• Growth Beyond Mexican

New Products And Product Trends

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• Table 1-1: 5-Year SKU Counts of New Mexican/Hispanic Food Product Introductions, 1998-2002
• Flavorings Lead, Products Follow
• Trends Influencing New-Product Creations
• Adventure and Intensity
• Desire for Greater Authenticity
• Beyond Mexico
• Portability
• Convenience: Frozen Heats Up
• Portability+Convenience=Bowls
• Meals for One

Retail Strategies

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• Opportunities and Challenges
• Frozen Mexican Drives Sales in Supermarket Segment
• Consolidation May Affect Distribution
• The C-Store Connection: Young Males, Frozen Burritos
• Courting Ethnic Consumers
• Retailer-Driven Strategies
• Customized Formats
• Ethnic Store-Within-A-Store
• The Online Channel

Foodservice Trends

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• Mexican on the Mainstream Menu
• The Influence of Chefs
• High-End Trends
• The Fast-Casual Segment
• "Fresh Mexican Grills"
• Latin American Competitors Turn up the Heat
• Table 1-2: Fast-Casual Mexican Restaurants, The Top 3, By the Dollars, Revenue and Percentage, for 2001
• QSR Tries to Keep Pace

The Consumer

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• Overall Usage
• Usage Skews West
• Usage of Specific Categories by Region
• Bigger Household, Bigger Mexican Appetite
• Women Have Slight Edge
• Usage Increases with Household Income
• Table 1-3: Usage of Mexican Food by Household Income
• Education Level Also Equates to Usage

Chapter 2 The Market

The Market

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• Latino Jell-O
• An Inaugural All-Latin Food Show
• What are "Hispanic Foods?"
• Scope of This Report
• A note about nomenclature
• A Note about IRI Data
• A Note about Simmons Market Research Bureau
• A Note about Advertising Data

The Market for Hispanic Foods: Who' s Buying, What and Where

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• The Hispanic Market
• Population Growth
• Table 2-1: U.S. Population Break-down, By Race, As of July 1, 2001
• Purchasing Power
• Buying Patterns
• National Origins of U.S. Hispanic Population
• Figure 2-1: Nationals Origins of U.S. Hispanic Population
• Regional Distribution of U.S. Hispanic Population
• Figure 2-2: Regional Distribution of U.S. Hispanic Population
• The Broader Market for Mexican and Hispanic Foods
• Latin Influence on Mainstream Consumers
• Consumers Exhibit Widespread Interest in Ethnic Foods
• Hispanic-Americans Have Highest Household Usage Rate for Mexican Products
• Figure 2-3: Percentage of Households Using Mexican Foods/Ingredients, By Racial/Ethnic Origin
• Salsa Is No. 1 Mexican Food Product Cited
• Figure 2-4: Household Use of Mexican Food Products by Type
• Gen-Xers, Younger Boomers Are Most Frequent Mexican Food Users
• Go West, Mexicans Food Markets
• Mexican Food Should Have Age-Spectrum Appeal

The Market for Hispanic Foods: Past and Present

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• Retail Hispanic Foods Market Reaches $2.7 Billion (Tortilla/Corn Chips Excluded)
• Retail Sales of IRI Mexican Foods Categories Exceeds $1 Billion
• Figure 2-5: U.S. Total Retail Sales of Mexican Foods (in millions), 1998-2002
• Mexican Sauces Outpace Other Mexican Food Categories
• Growth in Terms of Sales
• Figure 2-6: CAGR of Mexican Foods and Sauces, by Category, 1998-2002
• Figure 2-7: Growth of Mexican Foods and Sauces (in millions) by Category, 1998-2002
• Figure 2-8: Comparison of 2002 Total Retail Sales of Mexican Foods and Sauces by Category
• Table 2-2: Sales (in millions) of Mexican Foods Subcategories and Mexican Sauces, 2002 vs. 2001
• Frozen Mexican Sales Heat-Up
• Tortilla/Corn Chips
• Refrigerated Tortillas See Solid Growth

Retail Outlets

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• Food Stores Dominate Mexican Food Sales
• Role of Internet

Projected Market Growth

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• Hispanic Foods to Exceed $3.4 Billion by 2008
• Market Growth Projections for Hispanic Food Segments
• Mexican Foods: $1.31 billion
• Figure 2-9: Projected U.S. Retail Sales of Mexican Foods, 2003-2008 (in millions)
• Mexican Sauces: Mexican Sauces: $1.11 billion
• Table 2-3: Projected U.S. Retail Sales of Mexican Sauces, 2003-2008 (in millions)
• Refrigerated Tortillas: $256.8 million
• Table 2-4: Projected U.S. Retail Sales Refrigerated Tortillas, 2003-2008 (in millions)
• Frozen Foods: $659.1 million
• Table 2-5: Projected U.S. Retail Sales of Frozen Mexican Foods, 2003-2008 (in millions)
• Tortilla/Corn Chip Market: $7.7 billlion
• Table 2-6: Projected U.S. Retail Sales of Tortilla/Corn Chips, 2003-2008 (in millions)

Chapter 3 The Competitive Situation

• Hispanic Food as an Investment Opportunity
• Major Mainstream Players
• Leading Specialists
• Frozen Food Specialists
• From Mexico to Mainstream
• Private-Label Power
• Up-and-Comers

Marketer Shares

• Overall Category Shares of Mexican-Food Brands
• Figure 3-1: Mexican-Food Brands Used Most Often, 2002
• Subcategory Shares, With Extra Sauce
• Hard/Soft Tortillas/Taco Kits
• Figure 3-2: Market Share (as Dollar Share) in Hard/Soft Tortilla/Taco Kits, Based on U.S. Sales in 2002
• Table 3-1: Dollar Share of Hard/Soft Tortillas/Taco Kits Market 2002 vs. 2001
• Table 3-2: Top Hard/Soft Tortillas/Taco Kits Brands, 2002 Sales
• Mexican Food Items
• Table 3-3: Top Marketers of Mexican Food Items, 2002 Sales
• Refried Beans
• Table 3-4: Top Marketers of Refried Beans, 2002 Sales
• Sauciest Marketers, By Brand Sales
• Table 3-5: Top U.S. Marketers of All Mexican Sauces, By Total Sales (in Millions) 2002 vs. 2001
• Table 3-6: Top Marketers of Salsa, 2002 Sales
• Table 3-7: Top Marketers of Taco Sauce, 2002 Sales
• Table 3-8: Top Marketers of Picante Sauce, 2002 Sales
• Table 3-9: Top Marketers of Other Mexican Sauces, 2002 Sales
• Frozen Dinners and Hand-Held Entrees
• Bottled Juices and Nectars
• Refrigerated Tortillas
• Table 3-10: Top Marketers of Refrigerated Tortillas, 2002 Sales

Profiting from Growth Beyond Mexican

Competitive Profiles: The Mainstream Players

• Nestle (Ortega)
• Product Areas - Ortega
• Competitive Advantage: Ortega is a Salsa Leader
• Kraft Foods (Taco Bell)
• Product Areas - Taco Bell
• Competitive Advantage - Synergy Over Authenticity
• But Is That Changing?
• Bilingual Web Site for "Latina Moms"
• PepsiCo (Frito Lay/Doritos)
• Product Area: Doritos/Frito-Lay
• Competitive Advantage: Chips, Chips, Chips
• Table 3-11: Top Marketers of Tortilla/Tostada Chips. 2002 Sales
• Saying "Si" to Sabritas
• Salsa Leade
• Pillsbury/General Mills (Old El Paso)
• Product Areas: Old El Paso
• Competitive Advantage: Convenience and Depth
• Heinz (Delimex)
• Heinz Acquires Delimex Foods
• New Product Lines
• Up and Down Sales Pattern
• ConAgra (Rosarita, Fernando' s Foods)
• Product Areas: Rosarita and Other Brands
• Foodservice Through Fernando' s
• Hormel (Chi-Chi' s)
• Product Area: Chi-Chi' s
• Product Area: "Authentic Products"
• Campbell Soup (Pace)
• Product Area: Pace
• Competitive Advantage: Picante is Hot
• A Smattering of Mexican/Hispanic Products
• Cargill
• Uncle Ben' s
• Ice Cream Manufacturers
• Candy Companies
• What' s Next for Mainstream Marketers?

Competitive Profiles: Hispanic Market Specialists

• Goya
• Competitive Advantage: Authenticity and Depth
• Product Areas: You Name It in Spanish, Goya Probably Has It
• Grupo Bimbo
• Competitive Advantage: Roots and New Branches
• Iberia
• La Fe
• Mission (Gruma SA)
• La Victoria/Embassa (Authentic Specialty Foods)
• What' s Next for the Major Specialists?

Competitive Profiles: The Frozen/Refrigerated Food Speciaists

• Table 3-12: Top 15 Marketers of Frozen Hand-Held Foods (Nonbreakfast), 2002 Sales
• Ruiz Food Products
• A Leader in Most Channels
• Considerable "Cross-Over" Appeal
• New Product Introductions
• Snacking All the Way to the Bank
• Don Miguel
• Specialty Brands
• Camino Real

Competitive Profiles: The Up-and-Comers

• Urys
• Jugos del Valle
• Fresh Foods Concepts (Senor Felix)
• Others to Watch
• Excelline Foods
• Juanita' s Foods

Chapter 4 New Products and Product Trends

• Product Categories Used by Consumers Most Often
• Figure 4-1: Household Use of Mexican Food Products, by Type
• New-Product Introductions
• Table 4-1: 5-Year SKU Counts of New Mexican/Hispanic Food Product Introductions, 1998-2002
• Flavorings Lead, Products Follow
• Table 4-2: A Sampling of New Mexican/Hispanic Product Introductions, 2001-2002
• Frito-Lay Gives Snacks a Latin Twist
• Spices and Seasonings Get Spicier

Trends Influencing New-Product Creation

• Flavor Trends
• Adventure and Intensity
• Desire for Greater Authenticity
• But No to Dulce de Leche M&Ms
• Venturing Beyond Mexico
• Lifestyle Trends
• Portability
• Convenience: Frozen Heats Up
• And Convenience Expands Its Boundaries
• Burritos Are Not Just for Dinner Anymore
• Mexican Dinner Kits
• Mini Mex-es Are Big Business
• Portability+Convenience=Bowls
• Meals for One

New Mexican/Hispanic Products

• Table 4-3: Selected Mexican/Hispanic Products Introduced 2000-2002: Meals and Entrees
• Table 4-4: Selected Mexican/Hispanic Products Introduced 2000-2002: Meat & Poultry
• Table 4-5: Selected Mexican/Hispanic Products Introduced 2000-2002: Dairy/Dairy Substitute (excluding ice cream)
• Table 4-6: Selected Mexican/Hispanic Products Introduced 2000-2002: Frozen Products
• Table 4-7: Selected Mexican/Hispanic Products Introduced 2000-2002: Convenience Items
• Table 4-8: Selected Mexican/Hispanic Products Introduced 2000-2002: Snacks
• Table 4-9: Selected Mexican/Hispanic Products Introduced 2000-2002: Spices/Sauces (including Salsa)/Seasonings
• Table 4-10: Selected Mexican/Hispanic Products Introduced 2000-2002: Sweets (including desserts/ice cream)
• Table 4-11: Selected Mexican/Hispanic Products Introduced 2000-2002: Miscellaneous (including beverages)
• Niche Categories
• Table 4-12: Selected Mexican/Hispanic Products Introduced in Niche Categories, 2000-2002

Chapter 5 Retail Strategies

• Mass and Supermarket Channels Dominate Sales
• Growth Up in Mass and Supermarket, Down in Drug
• Figure 5-1: Compound Annual Growth Rate of Mexican Food Sales by Channel, 1998-2002

Trends in Retail Sales

• Frozen Mexican Drives Sales in Supermarket Segment
• "Premium" Paves the Way to Increased Supermarket Sales
• Consolidation May Affect Distribution
• Investment May Also Bring Diversity
• The C-Store Connection: Young Males, Frozen Burritos
• Don Miguel Scores with the "Bomb"
• Making Hot-to-Go a Priority
• Mature, But Not Retired
• The Online Channel
• MexicanGrocer.com
• Hard-to-Find Items Through MexGrocer.com
• An Ethnic Food Panel

Opportunities and Challenges for Reaching the Ethnic Food Customer

• Best Practices for Courting Ethnic Consumers
• Figure 5-2: Hispanic Shoppers' Top Criteria for Deciding Where to Shop
• Sampling is Key

Retailer-Driving Strategies: Attracting Hispanic Shoppers (and Authentic Product Seekers)

• Customized Formats
• Carnival Food Stores (Minyard Food Stores)
• Marsh Supermarkets
• Albertson' s
• Lowe' s Food Stores
• Ethnic Store-Within-A-Store
• Baking Up Profits from Hispanic Products
• Neighborhood by Neighborhood
• Wal-Mart
• Kmart
• Marketer-driven Strategies - The Goya Approach

Chapter 6 Foodservice Trends

• Mexican - and Latino - on the Mainstream Menu
• Table 6-1: Compound Annual Growth Rate of Quick Service Restaurants 1979 to 1999 (in percentage)
• Mexican QSR Appeal
• Table 6-2: Number of Ethnic Menu Items on Menus of Non-Ethnic Chain Restaurants, by Cuisine, First Half 2002
• Moving Beyond Quesadillas
• Ethnic Eating: Multiple Levels of Appeal
• Table 6-3: Types of Appeal Attributed to Latin Ethnic Cuisines

Rick Bayless and The Influence of Chefs

• Chefs on TV
• High-End Latino Trends
• Is Peru the Next Big �eNew' ?
• Back To Roots

Fast-Casual: Fresh, Real and Quick

• Growth Greatly Outpaces Other Restaurant Sectors
• A Desirable Demographic
• "Fresh Mexican Grills": The Top Three
• Chipotle
• The big burrito
• Aggressive Expansion by McDonald' s
• Advertising and Marketing Strategies
• Baja Fresh
• No, No, No
• Wooed (and won over) by Wendy' s
• Advertising and Marketing Strategies
• Rubio' s
• A New Look and Menu
• Slowing Expansion
• Advertising and Marketing Strategies
• The Next Tier
• Qdoba
• La Salsa
• Niche Players
• Wahoo' s Fish Tacos
• Desert Moon Café
• Table 7-4: Fast-Casual Mexican Restaurants, By the Numbers
• Table 7-5: Fast Casual Mexican Restaurants, The Top 3, By the Dollars

QSR: Taco Bell and Others

• Taco Bell Tries to Keep Pace
• Other Mexican QSR Players
• Latin American Competitors Turn up the Heat

Foodservice Beyond Restaurants

• A New Spanish Course on Campus
• Popular Choice with School-Age Set
• From Foodserservice to Freezer Case

Chapter 7 The Consumer

• Nearly Two-Thirds of Households Use Mexican Food
• West is Best for Mexican Food Consumption
• Figure 7-1: Use of Mexican Food by Census Region
• And What They Eat Depends on Where They :Live
• Figure 7-2: Most-Used Mexican Product Categories By Census Region
• Eating Preferences Reveal Regional Biases
• Old El Paso Has Widest Scope of Regional Use
• Latinos Biggest Users of Mexican Products, But Other Groups Show Strong Patterns
• Table 7-1: Mexican Brands Most Often Used, By Census Region, By Percentage of Households
• Figure 7-3: Percentage of Households Using Mexican Foods/Ingredients, By Racial/Ethnic Origin
• Figure 7-4: Most-Used Mexican Product Categories By Racial/Ethnic Origin
• Gen-Xers, Back-End Boomers Drive Mexican Food Sales
• Figure 7-5: Percentage of Households Using Mexican Foods/Ingredients, By Age Group
• Maturing Boomers to Drive Mexican Growth
• Bigger Families, Bigger Mexican Appetites
• Figure 7-6: Percentageof Households Using Mexican Foods/Ingredients, by Household Size
• Figure 7-7: Percentage of Households Using Mexican Foods/Ingredients, By Ages of Children
• Kids Take Mexican Choices for Granted
• Women Have Slight Edge to Mexican Product Usage
• Figure 7-8: Male vs. Female Usage of Mexican Food
• Higher Income Translates to Higher Usage
• Table 7-2: Usage of Mexican Food By Household Income
• Usage Rises with Educational Attainment
• Figure 7-9: Percentage of Households Using Mexican Foods/Ingredients, By Educational Level
• General Attitudes Toward Ethnic Foods Consumption

Hispanic Buying Patterns

• National Origins of U.S. Hispanic Population
• Authentic vs. Adapted
• Pleasing All of the People All of the Time

Chapter 8 Trends and Opportunities

• More Movement Toward the Mainstream
• Greater Acceptance by All Ages
• New Fusions
• Contenders for the Crown
• Seeking Authenticity
• Craving Convenience
• Integration Into Mainstream Brands
• Hispanic Marketers Branching Out
• Playing Into Consumer Buying Patterns
• Making It Portable, If Possible
• Taking Easy Points of Entry
• Diversifying with Caution
• One from Column A, One from Column B

Appendix I: Addresses of Selected Marketers