The U.S. Market for Hispanic Foods and Beverages, 2nd Edition

Chapter 1: Executive Summary

Scope and Methodology

Market Parameters

Report Methodology

A Note About Nomenclature

The Products

Three Primary Segments

First Segment: Mainstream Mexican

Second Segment: Authentic Hispanic

Third Segment: Nuevo Latino

Size and Growth of the Market

2004 Sales Are Almost at $4.4 Billion

Sales Exceed $7.0 Billion by 2009

Table 1-1: U.S. Sales of Hispanic Foods and Beverages, 1999-2009

Projected Category Growth Strongest for Select Categories

Factors Affecting Market Growth

The Marketers

All Types of Marketers

Most Ideas Start in Foodservice

Non-Hispanic Chains Are Actively Promoting Their Mexican Items

Distribution and Sales Outlets

Channels of Distribution

Distribution Methods

Traditional Supermarkets Are Losing Share to Large Retail Outlets

The Birth of the International Aisle

The Consumer

The Hispanic Population Boom

Hispanic Population Attitudes

Latin Influences on Mainstream Consumers

New Product Trends

Mainstream Mexican Foods Still Popular, Some Have a Kick

Convenience Is Very Trendy Everywhere

Frozen Foods Continue to Boom

The Rise of Regional Hispanic Cuisine

Chapter 2: The Products

Scope of the Report

Markets Analyzed

Products Outside of Scope

Hispanic Foods and Beverages

A Note About Nomenclature

What Are Hispanic Foods and Beverages?

Hispanic Preferences Define Hispanic Category

Table 2-1: Ingredients Characterized as Hispanic

Product Breakouts

Three Primary Segments

First Segment: Mainstream Mexican

Second Segment: Authentic Hispanic

Third Segment: Nuevo Latino

Government Regulations

The Regulatory Environment

Labeling Overview

Products that Are Exempt

Bilingual Labels

Figure 2-1: Example of Single Nutrition Facts Containing Two Languages

Country of Origin

Trans Fats Are a New Addition

Nutrition Regulations in Foodservice

A Variety of Possible Claims

Allergen Issues

Are You Prepared for a Product Recall?

Table 2-2: A Sampling of Recalls, 2003-2004

Chapter 3: The Market

Market Size and Growth

2004 Ends with Sales of More Than $4 Billion

Table 3-1: Total U.S. Retail Sales of Hispanic Foods and Beverages, 1999-2004

Figure 3-1: Total U.S. Retail Sales of Hispanic Foods and Beverages, 1999-2004

Market Likely Larger, Particularly in Authentic Hispanic Categories

Products and Brands Used for Calculating Market Data

What Else Is Not Included? Chili!

Table 3-2: U.S. Retail Sales of Hispanic Foods and Beverages by Product, 1999-2004

Chips and Booze Also Not Part of Market Figures

Table 3-3: U.S. Retail Sales of Hispanic Beer, 1999-2004

Table 3-4: U.S. Retail Sales of Select Salty Snacks, 1999-2004

Beers From South of the Border Are Hot

With Mainstream Mexican, Dips Are Booming

Table 3-5: U.S. Retail Sales of "Mainstream Mexican"  Hispanic Foods and Beverages by Product, 1999-2004

Convenience Foods All the Way

Table 3-6: U.S. Retail Sales of "Mainstream Mexican/Authentic Hispanic"  Hispanic Foods and Beverages by Product, 1999-2004

Distribution and Population Growth Drives Authentic Sales

Table 3-7: U.S. Retail Sales of "Authentic Hispanic"  Hispanic Foods and Beverages by Product, 1999-2004

Nuevo Latino Is a Vague Category with Lots of Potential

Table 3-8: U.S. Retail Sales of "Nuevo Latino"  Hispanic Foods and Beverages by Product, 1999-2004

A Foodservice Note on Nuevo Latino

Market Composition

Tortillas Dominate Category

Mexican Appetizers Grow as a Category

Table 3-9: Total U.S. Retail Sales of Hispanic Foods and Beverages by Product, 2004

Northeasterners Are Just Not Big Hispanic Food Users

Table 3-10: Regional Distribution Indices for Consumption of Mexican Foods and Ingredients, by Product Type, Brand, and Region, May 2003-April 2004

Factors to Market Growth

Hispanic Population Growth

Desire for New Tastes and Heat

Hispanic purchasing power

Marketing Conferences Raising Awareness Among Marketers

Commodity Marketers Promote Product to Hispanics

Factor in Hispanic Settling Patterns

Convenience, Too, Is a Market Driver

Frozen Foods Are Quite Convenient

Growth Assisted by Ingredient Suppliers

Opportunity with Regional Hispanic Cuisine

Understanding Hispanic Flavor Preferences

Projected Market Growth

Sales Exceed $7.0 Billion by 2009

Table 3-11: Projected Total U.S. Retail Sales of Hispanic Foods and Beverages, 2004-2009

Hispanic Market Is One of the Most Aggressive

Table 3-12: Projected U.S. Retail Sales of Hispanic Foods and Beverages by Product, 2004-2009

Chapter 4: The Marketers

Marketer Diversity

All Types of Marketers

Table 4-1: U.S. Retail Hispanic Foods and Beverages: Select Marketers by Brand and Products Offered, 2004

Table 4-2: U.S. Foodservice Hispanic Foods and Beverages: Select Marketers by Products Offered, 2004

Competitive Retail Overview

Retail Marketers Are Almost Everyone

Focus on Key Players and Their Approach

Two Broad Types of Marketers

Mainstream Players Include the Leaders in Retail Food Marketing

Table 4-3: U.S. Hispanic Food and Beverage Retail Marketers: Top 10 Mainstream Companies (excluding alcohol) by Hispanic

Products/Brands and Revenues, 2003

Nestle Sells Ortega to B&G Foods

Kraft Foods Aggressively Markets ComidaKraft.com

Hispanic New Product and Promotion Activity from Kraft

Knorr Brand Now Includes Mexican Cooking Sauces

Swift Rolls Out "Authentic"  Meat Line

Smaller Mainstream Marketers Target Hispanics in Numerous Ways

First U.S. Mainstream Baker Enters Hispanic Bakery Business

Hershey Sweetens the Category

Heinz Knows There Is Business Beyond Ketchup

Hormel and Herdez Make Quite the Team

Coke Is Special to Mexicans

Calling All Kids . . .Kids of Every Ethnic Group

Focused Hispanic Specialists

A Different Type of Specialist

Hispanic Market Immersion Tour Hits Los Angeles

Hispanic Ad Spending Leads Minority Market

Miller Targets Hispanics

Leaders in Each Category

Table 4-4: U.S. Hispanic Food and Beverage Leading Retail Marketer, by product category, 2004

Competitive Profile: Authentic Specialty Foods, Inc., Chino, California

Company Overview

Here s Why La Victoria Is a Western Brand

Competitive Profile: Bimbo Bakeries USA, Fort Worth, Texas

Company Overview

Read Beyond the Name

The Story Behind Bimbo s Trademark Bear

Aggressive Growth Plans

Competitive Profile: Goya Foods, Inc., Secaucus, New Jersey

Company Overview

1,000 Products and Counting

Goya Creates Its Own Store Within a Store

Marketing as a Hispanic

The Day the Nephews Took Over

Competitive Profile: Gruma Corp., Irving, Texas

Company Overview

Mission Is the Name Gruma Goes by in the States

Tortilla Case Gets Cracked . . . Cracked Right Out of the Courts

Gruma Buys European Tortilla Makers

Competitive Profile: Ruiz Foods, Inc., Dinuba, California

Company Overview

Focusing on Frozen Growth

New Product Initiative

Helping Others Help Themselves

Competitive Foodservice Overview

Chain Restaurants Focus on Controlled Growth

Number-One Taco Bell Posts Almost 6% Increase in Dollar Sales

No One Comes Near Taco Bell s Market Penetration

Table 4-5: U.S. Hispanic Food and Beverage Foodservice Operators: Top 30 Chains, Annual Foodservice System-wide Sales and Number of Units Worldwide, 2003

Not All Mexican Chain Forerunners Are as Lucky as Taco Bell

Chili s Owner Dumps Cozymel s

Taco Bell Better Watch Out

Keep Your Eyes on Del Taco, Too

Who Else Is Growing?

Closing a Few La Salsa Stores Doesn t Stop Innovation

The Innovation Does Not Stop There

El Pollo Loco Spices Up Image with "El Caliente"

Who Else Spends and How Much on Advertising?

Non-Hispanic Chains Are Actively Promoting Their Mexican Items

In General, Spicy Breakfasts Are Becoming Increasingly Popular

Some Operators Are Teaming Up with Branded Hispanic Ingredients

Texas Dairy Queens Get Their Own Burger

And Some Are Simply Marketing Their Regular Menus to Hispanics

Bits and Pieces

Competitive Profile: Brinker International, Inc., Dallas, Texas

Company Overview

Chili s Opens on Okinawa Military Base

Brinker Sells Off Cozymel s

And Grows with More Chili s Concepts

Not Planning to Lose Dieting Customers

Kids Get More Healthful Options, Too

Chili s Donates Profits to Help Fight Childhood Cancer

Competitive Profile: Chipotle Mexican Grill, Inc., Denver, Colorado

Company Overview

Peppers, and Much More, Plus Some Booze, Too

Chipotle Becomes a Picky Pork Buyer.

Helping Hunger Solutions

Using Oracle for On-Line Business Management

New Ad Agency for Fresh Thinking

Competitive Profile: Qdoba Restaurant Corp., Wheat Ridge, Colorado, a wholly owned subsidiary of Jack in the Box Inc., San Diego, California

Company Overview

So Much More Than Burritos

Growing, Growing, and Still Growing

Expanding Into Non-Traditional Venues, Too

Despite Monies, Things Are Still Tough

A Different Type of Promo For a Different Type of Restaurant

Competitive Profile: Rubio s Restaurants, Inc., Carlsbad, California

Company Overview

Miksa Plans to Take Rubio s to the Next Level

New Products Are Plentiful

Taco Meal Deal Promoted by Sports Legends

Competitive Profile: Taco Bell Corp., Irvine, California, a division of Yum! Brands, Inc., Louisville, Kentucky

Company Overview

Staying Close to Its Pepsi Background

Taco Bell Is Big on Promos

And Big on Filling Up

Taco Bell Hit a Homerun

Two Months Later, Taco Bell Goes Mobile

Chapter 5: Distribution and Sales Outlets

Distribution Overview

Viva Mexico in Both Retail and Foodservice

Distribution Methods

Direct Delivery Advantages

The Cost of Face-To-Face Business

Warehouse Distribution

Smaller Marketers Work Through Brokers

Electronic Data Aids in Restocking

Distribution Is Second Highest Cost Next to Production

Retail Outlets

Traditional Supermarkets Are Losing Share to Large Retail Outlets

Leading Retail Chains

C-Stores Welcome Hispanics

Marketer-Driven Strategies.What Goya Demands

Unique Drug Store Concept Focuses on Hispanics . . . Almost Only

A New Retail Player Is Entering the Scene

Slotting Allowances at Supermarkets

Retailers Are Stocking More Hispanic Foods

A Case Study From Near the Nation s Capitol

The Birth of the International Aisle

Specialty Produce Filling More Shopping Baskets

Providing Consumers Ambiance

A Blessing for Rogers, Arkansas,  Hispanics

Heeding Consumer Demand for Convenience Foods

Mature Hispanic Market Stores

New York Bodega Owners Plan Launch of Product Lines

Grocery Shopping Is a Multi-Hour Family Affair

In Warm Climates, Hispanic Beverages Are Available Chilled

California Hispanic Grocers Grow With Non-Hispanic Customers

A Word of Caution

Retail Prices of Products Representative of the Category

Table 5-1: U.S. Hispanic-Style Salty Snack Foods: Suggested Retail Price of Selected Brands, 2004

Table 5-2: U.S. Hispanic Sauces and Canned Tomatoes: Suggested Retail Price of Selected Brands, 2004

Table 5-3: U.S. Tortillas: Suggested Retail Price of Selected Brands, 2004

Table 5-4: U.S. Taco Shells and Taco/Other Hispanic Meal Kits: Suggested Retail Price of Selected Brands, 2004

Table 5-5: U.S. Refried Beans and Hispanic Canned Vegetables: Suggested Retail Price of Selected Brands, 2004

Table 5-6: U.S. Hispanic Cheeses and Other Dairy Products: Suggested Retail Price of Selected Brands, 2004

Table 5-7: U.S. Frozen/Prepared Hispanic Meals and Hand-Held Foods: Suggested Retail Price of Selected Brands, 2004

Table 5-8: U.S. Non-Alcoholic Hispanic Beverages: Suggested Retail Price of Selected Brands, 2004

Table 5-9: U.S. Alcohol and Alcohol-Related Hispanic Beverages: Suggested Retail Price of Selected Brands, 2004

Table 5-10: U.S. Hispanic Bakery Products: Suggested Retail Price of Selected Brands, 2004

Table 5-11: U.S. Hispanic-Style Rice and Rice Mixes: Suggested Retail Price of Selected Brands, 2004

Table 5-12: U.S. Hispanic Seasonings and Spices: Suggested Retail Price of Selected Brands, 2004

Table 5-13: U.S. Hispanic Candy and Confections: Suggested Retail Price of Selected Brands, 2004

Table 5-14: U.S. Hispanic-Style Condiments: Suggested Retail Price of Selected Brands, 2004

Table 5-15: U.S. All Other Hispanic Foods and Beverages: Suggested Retail Price of Selected Brands, 2004

Private Label Pricing

Table 5-16: U.S. Hispanic-Style Salty Snack Foods: Private Label vs. Branded (Comparative Retail Price of Unseasoned Tortilla Chips), 2004

Table 5-17: U.S. Hispanic Sauces and Canned Tomatoes: Private Label vs. Branded (Comparative Retail Price of Salsas), 2004

Table 5-18: U.S. Refried Beans and Hispanic Canned Vegetables: Private Label vs. Branded (Comparative Retail Price of Refried Beans), 2004

Table 5-19: U.S. Frozen/Prepared Hispanic Meals and Hand-Held Foods: Private Label vs. Branded (Comparative Retail Price of Burritos), 2004

Table 5-20: U.S. Hispanic-Style Rice and Rice Mixes: Private Label vs. Branded (Comparative Retail Price of Rice), 2004

Table 5-21: U.S. Hispanic-Style Rice and Rice Mixes: Private Label vs. Branded (Comparative Retail Price of Rice Mixes), 2004

Table 5-22: U.S. Hispanic Seasonings and Spices: Private Label vs. Branded (Comparative Retail Price of Taco Mix), 2004

The Club Store Price Advantage

Multi-Packs and Family-Size Products

Table 5-23: U.S. Packaged Hispanic Foods and Beverages: Suggested Club-Store Price of Selected Products Compared to Supermarket

Price

Foodservice Outlets

Many Places to Enjoy Hispanic Foods and Beverages

Kiosks and Push Carts Make Hispanic Products Available Anywhere

Vending Machines Big For Hand-Held Items

C-Stores Are a Big Foodservice Venue for Hispanic Foods

Foodservice Venues Are Marketers

Beyond Taco Salad and Quesadillas

Most Ideas Start in Foodservice

Chapter 6: The Consumer

The Hispanic Population

The Hispanic Population Boom

Figure 6-1: Total U.S. Population Growth by Demographic Segment, 2002-2010

The Hispanic Market Skews Young

Figure 6-2: Total U.S. Population by Age: General Market vs. Hispanic Market (years old, percent share)

Hispanic Population Attitudes

Be Careful When Using the Term Hispanic.It Is Not All-Encompassing

National Origins Are Very Diverse, But Mexico Rules

Figure 6-3: U.S. Hispanic Population Breakdown by Country of Origin

Who Are These "Other Hispanics"  Coming to the United States?

Food Preferences by Country of Origin

Are Hispanics Undergoing the Melting Pot Experience?

Foreign-Born vs. U.S.-Born Hispanics

El Salvador and Colombia Lead in Country of Origin for Central and South America

Once They Come Here, Where Do They Live?

Figure 6-4: Regional Distribution of U.S. Hispanic Population

States Where Settling Is Most Popular

The Hispanic Household

Hispanic Eating Patterns

Home-Purchase Highlights

Dairy Is Big with Hispanics

Happy Meals to Make Kids Happy

Carbs Are Alright with Hispanics

Grocery Shopping Habits

Four Groups of Hispanic Shoppers

Traditional Supermarkets No Longer Primary Store

The Hispanic Foods and Beverages Consumer

Latin Influences on Mainstream Consumers

Simmons Consumer Survey

Simmons Data on Mexican Foods and Ingredients

Table 6-1: Percent of U.S. Adult Consumers Who Use Mexican Foods and Ingredients, by Product Type and Brand, May 2003-April 2004

Some Brands Dominate Certain Parts of the Country

Table 6-2: Percent of U.S. Adult Consumers Who Use Mexican Foods and Ingredients by Brand and Region, May 2003-April 2004

Mexican Food and Ingredient Users Are Anyone . . . Almost

Table 6-3: Demographic Characteristics Favoring Purchase of Any Mexican Foods or Beverages, May 2003-April 2004

Who Uses Nacho Kits?

Table 6-4: Demographic Characteristics Favoring Purchase of Nacho Kits, May 2003-April 2004

The Makings of a Taco Bar

Table 6-5: Demographic Characteristics Favoring Purchase of Taco Fixings: Dinner Kits, Shells, Sauce, and Seasoning Mix, May 2003-April 2004

When it Comes to Prepared Mexican Foods, Households with Kids Lead

Table 6-6: Demographic Characteristics Favoring Purchase of Prepared Hispanic Foods: Burritos, Enchiladas, and Tamales, May 2003-

April 2004

Westerners Like the Heat, While the Wealthy Indulge on Salsa

Table 6-7: Demographic Characteristics Favoring Purchase of Mexican Condiments: Green Chilies, Jalapenos, Refried Beans, and

Salsa, May 2003-April 2004

Chili . . . Mainstream Football Crock Pot Meal

Table 6-8: Demographic Characteristics Favoring Purchase of Chili Products, May 2003-April 2004

Tortilla Preferences Are Varied . . . "Wrap"  Concept Reduces Resisters

Table 6-9: Demographic Characteristics Favoring Purchase of Tortillas by Form: Corn vs. Flour, May 2003-April 2004

Does Hispanic Manufacturer Matter?

Table 6-10: Demographic Characteristics Favoring Purchase of Rice by Brand: Goya vs. Riceland, May 2003-April 2004

Relaxing with a Cold One Goes Across All Cultures

Table 6-11: Demographic Characteristics Favoring Purchase of Imported Beer by Brand: Corona, Dos Equis, and Modelo Especial, May

2003-April 2004

Chapter 7: New Product Overview

New Product Trends

Mainstream Mexican Foods Still Popular, Some Have a Kick

Convenience Is Very Trendy Everywhere

Meal Kits Expand Beyond the Main Course

Frozen Foods Continue to Boom

Beyond Salsa and Nacho Flavors

Culinology Process Showcased at IFT

Blending Hispanic Into Food and Beverage Product Development

The Rise of Regional Hispanic Cuisine

And When Marketing to Hispanics, Understand Their Flavor Preferences

Expansion of Hispanic Flavors

Hispanic Cooking Sauces

Beverage Makers Grow with Tropicals

For Now, Low Carb Is Truly an American Craze

Hispanics Like Colors and Sweets

New Product Introductions

Introductions Have Been Plentiful

Table 7-1: U.S. Hispanic-Style Salty Snack Foods: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-2: U.S. Hispanic Sauces and Canned Tomatoes: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-3: U.S. Tortillas: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-4: U.S. Taco Shells and Taco/Other Hispanic Meal Kits: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-5: U.S. Refried Beans and Hispanic Canned Vegetables: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-6: U.S. Hispanic Cheeses and Other Dairy Products: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-7: U.S. Frozen/Prepared Hispanic Meals and Hand-Held Foods: Select New Products by Marketer, Brand, and Description, 2003-

2004

Table 7-8: U.S. Non-Alcoholic Hispanic Beverages: Select New Products

Table 7-9: U.S. Alcoholic and Alcohol-Related Hispanic Beverages: Select New Products by Marketer, Brand, and Description, 2003-

2004

Table 7-10: U.S. Hispanic Bakery Products: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-11: U.S. All Other Hispanic Foods and Beverages: Select New Products by Marketer, Brand, and Description, 2003-2004

Table 7-12: U.S. Foodservice Hispanic Foods and Beverages: Select New Products by Foodservice Chain and Description, 2003-2004

Appendix: Addresses of Selected Marketers