The Hispanic consumer market is rapidly expanding, and recent studies confirm its significance in driving growth in the consumer packaged goods (CPG) sector. According to new data from Circana, Hispanics represent 20% of the U.S. population, with a remarkable 25% of Gen Z and Gen Alpha identifying as Hispanic. This demographic’s influence on market dynamics is further emphasized by findings that Hispanic households contribute 16% to total growth in CPG, surpassing their non-Hispanic counterparts in both dollar and unit sales growth over the past year, despite a notable tendency to earn incomes below $50,000.
Understanding the nuances within this demographic is crucial for brands and retailers eager to tap into this burgeoning market. Circana’s research highlights two primary subgroups within Hispanic consumers: acculturated and unacculturated. Acculturated Hispanics, who have adapted to mainstream U.S. culture, significantly drive spending in specific categories. They collectively spend upwards of $10.3 billion on personal care products like skin care, baby care, shampoos, and fragrances. Conversely, unacculturated consumers tend to gravitate towards products that are natural, plant-based, and sustainably packaged.
A closer examination of national trends reveals variances among subgroups within the Hispanic population. Notably, consumers of Mexican descent are growing at a modest rate of 14%. In contrast, the fastest growth is observed within Venezuelan (+236%), Honduran (+67%), Dominican (+59%), and Colombian (+51%) communities, showcasing a shift in the landscape of Hispanic consumer demographics.
When it comes to shopping behavior, Hispanic consumers lean heavily towards food and beverages rather than non-food items, particularly in unit sales. This can be attributed to the family-oriented nature of Hispanic households, where purchasing decisions often encompass a wider variety of products to cater to diverse family preferences. Research indicates that unacculturated Hispanics frequently opt for multi-flavor variety packs of food and beverages to satisfy different tastes within the household.
Navigating this landscape requires CPG brands to align their offerings with the values and preferences of Hispanic consumers. As noted by Sally Lyons Wyatt, global EVP and chief advisor at Circana, there are significant growth opportunities for brands that prioritize sustainability and cultural relevance. For example, offering natural and sustainably packaged products in beauty and personal care can resonate well with unacculturated consumers, while multi-flavor packs can appeal to larger households.
Furthermore, the implication for marketers is clear. As highlighted by Marshal Cohen, Circana’s chief retail advisor, understanding the unique traits of the Hispanic market is vital for retailers and manufacturers aiming for sustained growth. In this evolving market, a broad-based marketing strategy that includes a focus on the Hispanic demographic is essential.
The two reports titled “Part I: Meet the U.S. Hispanic CPG Consumer” and “Part II: Hispanics’ CPG Shopping Trends” provide deeper insights into these trends and are becoming critical resources for brands and retailers. By capitalizing on the preferences and behaviors of Hispanic consumers, companies can not only bolster their market share but also cater to a vibrant and diverse community that is shaping the future of retail.
This research serves as a wake-up call for brands to rethink their marketing strategies and product offerings. In a market where diversity is increasingly central, being culturally attuned is no longer optional—it’s imperative for success.
