• by Karlene Lukovitz  @KLmarketdaily, April 9, 2010

Statistics confirming the overall growth of Hispanics within the U.S. population and their spending power are readily available and frequently cited, but quantifying the Hispanic market's impact on specific consumer goods categories and industries can prove more elusive.

A new analysis of Census Bureau and Bureau of Labor Statistics Consumer Expenditure Survey data for 2005 to 2008 by Latinum Network sheds light on the true monetary impact of the Hispanic market on the food and beverage and restaurant industries.

Latinum, a for-profit business network that helps brands market to the Hispanic market through collaboration, networking and research, currently has more than 30 major marketer company members. The group presented its analysis during a recent Sanford C. Bernstein investor conference call.

Some of the findings:

• Between 2005 and 2008, new Hispanic spending offset 84% of the decline in real demand across the entire food, beverage, and restaurant industries. Total U.S. food sales grew by $15 billion (to $469 billion), beverage sales grew by $1 billion (to $114 billion), and restaurant sales declined by $19 billion (to $325 billion), for a combined loss of $2.9 billion (-0.003%). Within that total, sales generated by non-Hispanic consumers declined by $17.7 billion, or 2.4%, while Hispanic consumer sales rose by $14.8 billion, or 18.

• Hispanics represent the sole growth market within many key food, beverage and restaurant categories, and the primary demographic growth opportunity for a $566.7 billion majority of the restaurant and F&B industries.

Specifically, Hispanics represent 85% to 100% of real-growth opportunity for the restaurant industry (which had $325.4 billion in total sales in '08), as well as for at least 20 declining or stagnant F&B categories (which had combined sales of $241.3 billion in '08). Hispanics generated $4.9 billion in new sales for the restaurant industry, and $4.3 billion in new sales for the declining/stagnant F&B categories between 2005 and 2008.

Among the stagnant F&B categories, compound annual sales growth among non-Hispanics ranged from zero to -2.9%, while CAGR among Hispanics ranged from 3% to 12%.

For example, cracker sales declined by 0.1% among non-Hispanics, but rose 12% among Hispanics; fish/seafood declined 1.3% among non-Hispanics, but rose 10.2% among Hispanics; and candy/gum declined by 1.7% among non-Hispanics, but rose 8.2% among Hispanics. Health/ wellness concerns drove beef sales down (-1.2%) among non-Hispanics, but ethnic preferences produced a category gain of 3% among Hispanics.

• In addition, Hispanics represent 20% to 85% of real-demand growth opportunities among growing F&B categories that represented another $245 billion in sales in 2008. For these categories, Hispanics generated $5.9 billion in new market value, or about 20% of growth, between 2005 and 2008.

For example, frozen meals are the highest-growth food category among Hispanics (30% CAGR, representing $645 million in sales between '05 and '08, versus 18% growth among non-Hispanics). Within the growth categories, Hispanics also generated particularly significant dollar sales gains within poultry, pork, tea, fats/oils, fresh vegetables, ham, miscellaneous prepared foods and noncarbonated fruit drinks, among other categories.

In addition, alcoholic beverage sales rose 2.2% among Hispanics during the period, compared to a decline of 0.8% among non-Hispanics.

• Within the restaurant industry, 2005-08 compound annual sales growth among Hispanics was 5.2%, versus -2.5% among non-Hispanics. And while Hispanics have tended to prefer low-cost convenience over full service, that may be changing, according to Latinum.

Among Hispanics, price-adjusted CAGR grew in every category between '05 and '08, including breakfast/fast food (8.1%), breakfast/full service (1.8%), lunch/fast food (3.3%), lunch/full service (8%), dinner/fast food (3.1%) and dinner/full service (2.3%). In particular, Hispanics are increasingly likely to eat out during the work day. In contrast, among non-Hispanics, CAGR declined in every category but breakfast/fast food, which was up a mere 0.4%.

While growth in Hispanic households and population is the primary factor, the contrast in spending trends between Hispanic and non-Hispanic markets is also being driven by differences in ethnic preferences, economic and cultural integration, and demographics, points out Latinum co-founder and principal David Wellisch.

To win Hispanics' loyalty, brands must make "authentic appeals to their unique behaviors and tastes through distinct products, channels, messaging and marketing strategies," Wellisch stresses.