Ahead of the Wave
Jorge Alonzo
Featured Writer
How are the new demographics shaping your business?
Immigration from Latin America to the United States has long been a topic of contention across the cultural, economic, and political spheres. There is large consensus that a sustained flow of newcomers maintains the dynamism of our consumption-based economy, revitalizes communities, provides much-needed labor, and helps shape a more equitable and pluralist society, in a nation that has long prided itself in being the ‘melting pot’ of the world.
Having said that, not all immigration is equal for your business. According to the Pew Research Center, net migration from Mexico has significantly slowed down in the second half of the 2010s. Form a high of almost 30% of total immigrants in 2011, Mexican nationals now comprise around 25%, according to data from the US Census Bureau. However, net total migration remains positive, and foreign-born populations are increasing in numbers, with Mexican still being the largest Latin American demographic in the United States.
A quick study of immigration in our country will show that the current trends have happened before, but with different demographic groups. In the early years of the 20th century, large European-born populations came to the United States looking for a better life, as two world wars developed in the continent. As conditions of life improved in Europe, the immigration became more diversified and Latin Americans and Asians became the dominant groups, with Mexicans leading the charge.
A phenomenon often overlooked, especially in the East Coast, has to do with changes in consumption patterns. As immigrant populations age and grow more established, younger generations determine the products and brands that will succeed in the marketplace, and they are not always the same that were chosen by their parents and grandparents. Manufacturers of Hispanic grocery, retailers, and marketers are under constant pressure to innovate, cater to younger populations, and cross over to the 300-million people market of Anglo and African American consumers with a taste for Hispanic flavors.
As a business owner, it is important that you understand how these changes and long-term patterns affect your business. Being involved in your community will provide important insights about how consumers around you behave, and ultimately ensure that your product selection satisfies their needs. In a more diversified environment, we can no longer rely as heavily on the consumption of our traditional clientele, and we must look for ways to reach out to a broader base. Will this mean catering to Asian consumers, or will it mean offerings that satisfy the appetite of foodies, hipsters and other groups, regardless of their ethnicity? Partnering with manufacturers who innovate and provide alternatives to the traditional options may very well dictate your future growth. For retailers and store owners, it is important to maintain a keen eye on the food service trends, for they are a reliable indicator of what the public will be looking for, when they wish to incorporate Latino flavors in their everyday cooking.
If the past few years are any indication, we will continue seeing important growth in the organic and healthier trends. While few traditional Hispanic labels have stayed ahead of the curve in this arena, recent events, like the Natural Products Expo will be more relevant every day and provide an excellent thermometer for what is to come. A recent report by grocerydive.com found that while natural grocery only accounted for 9.1% of the total dollar volume in 2018, it packed 27.4% of the growth. As more second and third-generation Latinos begin driving the consumption patterns, they too will be looking for healthier and organic offerings, so it is important that you consider adding them to your portfolio.
It is crucial to note that online offerings have increased dramatically in the last year or so, with companies like Amazon jumping head-first into the grocery business. However, brick-and-mortar retailers, particularly in the Hispanic segment, still hold an important advantage that is nearly impossible to replicate: the close-to-home, personalized attention in areas like the meat counter. It is very important that you maintain them, without conceding any advantages in the product offering, which will keep costumers of all demographics in the 350-million people market coming through your doors and spending their dollars with you.