Latinos are the Biggest Spenders in Meat of America
Tony D’Andrea, PhD, Director of Planning and Research at SJG
Whether shopping in supermarkets or socializing at traditional carnicería butchers, Hispanics have emerged as the highest spenders on fresh and frozen meat in America. According to the U.S. Bureau of Labor Statistics, Latino households spend $964 on meat products each year, compared to $760 spent by general market households. Hispanics spent 27 percent more in beef, 21 percent in pork, and 48 percent in poultry. Dramatic differences are found in more specific categories, such as pork chops (34 percent), round steak (62 percent) and whole chicken (99 percent). An overview of the household spending in general meat categories can be seen in the table above.
Differences in spending have remained at double-digit levels over the years with interesting lessons about the recession. Before the economic crisis, Hispanic households spent $890 in meat products against $763 by general market households – a 17 percent difference in 2007.
Throughout the recession years, meat spending has increased slightly in the general market but more sharply among Hispanic households (see year 2008). As the economy seems to be slowly recovering, general market consumers resume going out to restaurants more regularly, whereas the domestic consumption of meats by Hispanics nears the thousand-dollar mark. At any point before, during or after the recession, the fact remains that Hispanics consistently spend more than the general market. This scenario will remain valid into the future, as the Hispanic demographic is projected to grow in population size and purchasing power: 51 million Latinos with a 1.3 trillion dollar wallet.
The Latino Meat Consumer
Hispanic meat consumption reflects general market patterns in an important aspect: meat consumption is largely determined by family size. Larger families consume more beef, whereas in smaller families (as well as in those with higher levels of education and average age) we see a gradual decline in beef and pork consumption, giving way to more poultry and ‘light’ versions of packaged meats. Given that Latino families are larger, younger and have twice more children than the national average (consider that 27 percent of children in America are Hispanic), it is logical that they will spend more than any other market segment.
But beyond this basic formula predicated on family size, Hispanics differ significantly in meat purchase and consumption habits. Unlike Non-Hispanic Whites and African Americans, their meat consumption does not vary much across income ranges. Both high and low income Latinos buy meat in large quantities as indicated in the 150 plus index points in the heaviest meat range (8+ pounds of cold cuts per week) according to a Packaged Facts report. (The general market is indexed at 100 points which works as the benchmark for comparison).
Moreover, Hispanics tend to be more price-sensitive than the general market in relation to meat products. Regardless of their income level, Latinos seek good-value deals and will often try and substitute closely related meat products or brands as a reaction to price change. However, a promotional war can only hurt marketers, and smarter branding strategies should be considered. Latinos are holistic shoppers who balance price, loyalty and promotional opportunities while open to advertising messages. As such, the best way to reach them is by means of an integrated multi-point approach both above and below the line.
Taste and preference over packaged meats is another realm. As noted by George San Jose, CCO of multicultural marketing agency SJG headquartered in Chicago, “there is an emotional element by which Hispanics have meat in their meals. Understanding this connection is important when developing communication strategies in the segment.” Differences in taste are reflected in product consumption. Latinos are heavy consumers of chicken sausages and frankfurters as noted in a whopping 250+ index. Also high are beef sausages, spicy meats and arc/rope-shape sausages, all indexing in the 150-180 preference range. Conversely, links, patties, kielbasas as well as uncooked meats and ‘light’ deli cold cuts are not consumed as often (standing in the meager 60-70 index range). Still, close to general market levels, processed pork, particularly bacon, provides new opportunities for marketers in the Hispanic segment. Historically valued across Latin American and Iberian cultures, pork-based products may catch their attention when marketed under well-crafted branding strategies.
Regionalism and Biculturalism in Meat Consumption
In addition to differences in shopping and preference habits, the national background of Latinos and their place of residence in the U.S. also affect how they purchase and consume meats. Whereas beef is favored by Latinos in the Midwest region, poultry and pork have an edge in the South. Mexicans consume more beef than Central Americans who favor poultry, whereas Puerto Ricans enjoy a rich seafood tradition, and South Americans (particularly Argentineans, Uruguayans and Brazilians) favor thick beef steaks as seen in trendy gaucho-style steak houses where large chunks of barbequed meat are dramatically sliced from a spit directly onto your plate. Although regularly neglected in general market strategies, the impact of these intra-cultural and regional differences need to be considered by regional marketers as well as by national ones seeking to optimize their distribution systems.
Another crucial dimension in Hispanic marketing is acculturation, the gradual process of acquisition of a second culture in addition to one’s native culture. Indeed, most U.S. Hispanics incorporate mainstream habits and preferences but these are learned through homeland dispositions, resulting in hybrid lifestyles. The entry of Hispanic women in the U.S. labor market is a good example. As time available decreases, the need for convenience and pre-cooked foods grows as a consequence; nonetheless, Latinas will still enjoy shopping at carnicerías visited along multiple “fill-in”, low-spend trips, influenced by their children. As new hybrid habits crystallize in consumer preferences, meat marketers must be creative when exploring merchandising and branding opportunities in the Hispanic segment.
New Trends in Hispanic Marketing
Forty million U.S. Hispanics will be actively engaged online by the mid-2010s. Marketing to this segment must stand in line with the current digital consumer revolution. Latinos overindex in a variety of online activities: creating social media pages and blogs, posting comments, downloading video and music content, sending and receiving tweets, etc. Latina moms are one of the most active online groups, partly due to their lower average age and a semi-domestic, but increasingly mobile lifestyle. However, Latinos are largely underserved in Spanish online. According to Mike Kolin, VP of Channel Strategy at SJG, “given that less than 20 percent of Latinos prefer to speak English at home, developing an online conversation in Spanish provides a competitive advantage for marketers in the digital space.”
Not by accident, leading brands are developing digital campaigns aligned with their marketing strategies both above and below the line. This is not about having a stand-alone website showcasing product lines in Spanish, but in creating a multi-pronged platform that entwines website, social media and mobile resources seeking to engender a consumer community. Beyond promotions, brand loyalty is key. As Mark Revermann, VP of Insights and Integration at SJG notes, “an integrated marketing approach with multiple touch points for information, engagement and interaction is ideally suited for this particular multicultural segment. To that end, multicultural expertise is recommended to optimize ROI in the Hispanic segment”.
