Hispanic Purchasing Power Up 200% Since 2000

With $1.3 trillion in purchasing power and representing one-sixth of the US population, engaging Hispanic consumers is critical to a consumer packaged goods company’s success. According to new research by Information Resources, Inc., Hispanics have increased their spending more than 200% since 2000.

To arm CPG marketers and retailers with critical information essential for engaging and activating this shopper segment, IRI has released HispanicLink 2014, which links shopper attitudes to their purchase behaviors. Hispanics vary tremendously in terms of such demographics, the use of digital, social and mobile communication and how that impacts their path-to-purchase.

However, unique to the Hispanic population is variation based on level of acculturation.

“Aligning a service and market offering with the needs of Hispanic shoppers is rapidly becoming a critical success factor for sustained CPG and retail growth,” said Staci Covkin, principal, IRI. “Recent IRI research has demonstrated that improved insights and activation of these shoppers can result in significant sales and market share uplift.” IRI quantified these results in its recent Point of View, “Winning with the Hispanic Shopper.” 

The report notes that a CPG company with $1 billion in sales can earn an additional $71 million in incremental revenue through effective Hispanic marketing.

IRI identifies three distinct shopper segments and draws comparisons among members of these segments and non-Hispanic consumers.

The segments include:

• Acculturated Hispanics. With a median income of $62,000, these shoppers are familiar with American culture and language and tend to be more optimistic about the future. When shopping, they frequently want the best price or deal and are willing to compromise on product quality to some extent. They also tend to be more digitally savvy and concerned with their physical appearance than non-Hispanics.
• Bicultural Hispanics. While shoppers in this segment are bilingual, they choose to follow Hispanic traditions and are more inclined to buy products that are specifically marketed to Hispanics. As shoppers, they are also the most digitally savvy of all groups, according to the IRI report.
• Unacculturated Hispanics. With more limited knowledge of English, shoppers in this segment rely on Spanish translations on packaging and buy products specifically marketed to them. Shoppers in this segment are also most likely to listen and be influenced by advertising before buying a product.