• by Parker Morse , Columnist, April 24, 2018

The U.S. Hispanic consumer segment is now surpassing $1.5 trillion in purchasing power. To put that in perspective, that’s akin to the 16th-largest economy in the world. That’s larger than the economy of Mexico. Moreover, it’s growing at a relatively fast clip, and is estimated to hit $1.7 trillion by 2019. Much of that is grocery spending: There was a 22% increase in Hispanic spending at grocery from 2010 to 2015. By 2020, Hispanic consumers will be buying $96 billion in groceries, an astonishing 47% jump from a decade prior.

U.S. Hispanic shoppers, on average, spend more of their household income on groceries than their non-Hispanic neighbors. It’s a sizable gap: according to Nielsen data, non-Hispanics spend an average of $71 per visit on food, while Hispanic shoppers spend $81 on food. It’s because of these differences that I find the Hispanic grocery market so fascinating and important to watch — and there are certainly developments to pay attention to. 

Fiesta Mart, the largest Hispanic grocery in Texas, is being acquired by the company running El Super (popular in California, Arizona, Nevada, and New Mexico), leading to a new company with sales of over $3 billion. These deals do not have insignificant dollars attached; the Houston Chronicle reported that the purchase price may be $300 million. Fiesta operates 63 stores in Dallas and Houston; El Super has 59 stores across its markets.  

It’s clear that the acquiring company saw an opportunity: over half of the rapidly growing U.S. Hispanic population lives in the five states where these two Hispanic grocers are situated. It’s also possible that consolidation in this market might be necessary for survival purposes, given that larger players like Walmart, Kroger, and Aldi are looking to prioritize and focus on Hispanic shoppers. In announcing the deal, Fiesta CEO Sid Keswani said that the merger of Fiesta and El Super’s "scale, geographic reach, talented teams, and market knowledge" will be a boon to both chains.

El Super  isn’t the only Hispanic grocer that is capitalizing on the growth in the Hispanic market.

Fresco y Mas has just debuted in Central Florida, as a Winn-Dixie store was converted into a Hispanic grocery complete with freshly baked Cuban bread, live Latin music, and vibrant yellow signage.

The Fresco y Mas rebrand was announced as Southeastern Grocers, its parent company, goes into bankruptcy. Part of Southeastern Grocers’ plan to save itself is to rebrand some of their stores under different banners — such as Fresco y Mas — to better cater to nearby consumers. Making available produce such as yucca, malanga, and calabasa at Fresco y Mas, which wasn’t available at Winn Dixie, sends a message to the Hispanic consumer that catering to the community is important.

“We know that no one community or customer is the same,” said Southeastern’s CEO, Anthony Hucker. “We believe in grocery stores that are catered to each community. The strategy at Fresco y Mas is really simple — we try to provide them with a really authentic Hispanic shopping experience that truly reflects the specific needs of the Hispanic communities.” With the realization that Hispanic consumers have their own unique wants and needs going mainstream, targeting these consumers with unique marketing and advertising messages will go mainstream as well.

In fact, 38% of Caucasian consumers and 56% of Asian consumers find Hispanic snacks appealing. This crossover appeal is yet another trend that makes the Hispanic grocery market one to watch.