On the Rise: The Growing Inﬂuence of the Hispanic Shopper

On the Rise:The Growing Infl uence

of the Hispanic Shopper

2 The Why? Behind The Buy HISPANIC

On the Rise: The Growing Infl uence of the Hispanic Shopper

Foreword from UnivisionThere are currently 52 million Hispanics in the United States representing nearly 17% of the total population and growing fast. Hispanics will account for 60% of the country’s population growth over the next fi ve years. This group is younger than the general U.S. population, with over 60% of Hispanics under the age of 35.*

Because of their younger demographic skew, many Hispanic consumers are going through important life events. They are moving out of their parents’ homes into their fi rst apartments, they are getting married, and they are becoming parents. They are in their peak purchasing years.

The Hispanic population has reached a point where its sheer size and shopping dollars can be a differentiating growth engine for manufacturers and retailers that successfully address the Hispanic consumer and these shoppers’ unique needs and shopping preferences. Going forward it is not a question as to whether or not manufacturers and retailers will have a Hispanic marketing strategy, it is a question of how much they will be willing to spend and how they will best engage this dynamic and powerful segment of the U.S. population.

Smart marketers are quickly learning Hispanics have their own distinct product consumption patterns, purchase decision infl uencers and technology usage habits. Success will come for the CPG companies and retailers that understand the similarities between Hispanics and the general market and can authentically celebrate the differences.

With the goal of driving this understanding, AMG Strategic Advisors, a leading growth strategy consultancy, partnered with Univision Communications, the leading media company serving Hispanic America, to create a special Hispanic-specifi c edition of the bi-annual research report The Why? Behind The Buy.

*Source: Nielsen State of the Hispanic Consumer: The Hispanic Market Imperative Quarter 2, 2012.

“Univision is proud to share these

timely and actionable shopper

insights created in collaboration

with AMG Strategic Advisors. By

coming together, we produced

something exponentially more

valuable for our shared retail and

CPG clients.”

Roberto Ruiz, Senior Vice President, Brand Solutions,

Univision Communications


he Hispanic market is a bright spot in the U.S. grocery shopping landscape. The fastest growing

ethnic segment in the U.S. has massive buying power and broad infl uence that extends well beyond its own ethnic group. This is a group on the rise in numbers, education, buying power, social media use, mobile technology use, healthy eating, and cultural infl uence.

Acosta Sales & Marketing’s AMG Strategic Advisors and Univision collaborated on this fi rst-ever Hispanic version of the infl uential The Why? Behind The Buy report to give consumer packaged goods (CPG) manufacturers and retailers valuable, actionable insights into one of the most important U.S. consumer segments.

Hispanics spend more on food

with a higher average monthly

food budget and bigger spends

on both routine and stock-up

grocery trips.

Hispanics’ buying power of

$1 trillion in 2010 will grow

to $1.5 trillion by 2015.

3The Why? Behind The Buy HISPANIC

T


Key Findings On the Rise: The Growing Infl uence of the Hispanic Shopper

Hispanic family mealtime is a priority. Whether for cultural or economic reasons or a combination of both, U.S. Hispanic shoppers cook more frequently at home than the general population. Many make an effort to eat healthy foods, including organic foods, despite the extra expense. They plan meals at least two days in advance and are more likely to prepare meals requested by family members.

Hispanics lead the way in use of technology, digital and social media. They are early adopters of new technologies, and heavy users of digital and social media, including streaming video, music sitessocial networking and blogs. A main driver of their technology use is to stay better connected with fami ly and friends. More than half of the U.S. Hispanic shoppers surveyed use technology for grocery shopping. They are also more likely than the general U.S. population to use digital channels for pre-shop planning, such as shopping lists and recipes.

Shopping is a social experience for Hispanics.Across the board, Hispanics are more likely to go grocery shopping with a companion, even “en masse” with several family members. They shop with spouses, young children, sometimes with adult children, and rarely shop alone. They are also more likely to shop for fun or entertainment.

The Spanish language helps U.S. Hispanics stay connected to their cultural roots. U.S. Hispanics relate to two identities — American culture and their Hispanic roots. Language is a strong connector for preserving culture and generational traditions. Most of those we surveyed preferred to speak at least some Spanish at home, and that preference was true across generations. Young shoppers also indicated a preference for Spanish language media, from

broadcast to print.

Hispanic shoppers show more loyalty for national brands.

National CPG brands are more likely to show up on

the shopping lists of U.S. Hispanics by specifi c brand name. Also, more U.S. Hispanics say they are likely to switch back to national brands from store brands when

their fi nancial situation improves.

U . S . H i s p a n i c s a r e optimistic despite economic

challenges. Compared to the general U.S. population, more Hispanic

shoppers we surveyed suffered job losses and experienced diffi culty fi nding employment over the last year. Yet, they are decidedly optimistic about the future, with more expecting positive changes in household employment and income in the coming year versus the total U.S. population.

Familylarger average

family size

Cookingfrom scratchwith healthyingredients

an

Meal Timemore celebrations

& family meals

m

Technologyfor social

connection

Hispanics areFamily & Food

CentricShoppingmore trips &more spend

l

His

MediaSpanish language

is culturalconnection

Despite job and income challenges, many Hispanics believe the coming year will be better. Overall there is a

positive and hopeful view among U.S. Hispanics as they focus on building better futures for their families.

Hispanics Optimistic About the Future


There’s reason for CPG manufacturers to be optimistic too. About three out of four Hispanics create shopping lists and these lists are twice as likely to include a brand name. What’s more, Hispanics appear to be signifi cantly less committed to store brands with 39% indicating they would likely resume buying more national brands than store brands when the economy or their fi nancial situation improves.

Hispanics are more loyal to

national brands. They are more

than twice as likely as the general

population to switch back to

national brands when their

fi nancial situation improves.


When the shopping list is created in your household, how are items typically listed?

Do you expect any change in employment for your household’s main breadwinner in the coming year?

Do you expect any change in total household income in the coming year?

Don’t typically use a list

By type of product

By brand name of product

By brand name and its specifi c

variety

A combo of the above, depends

on product

24%19%

44%

55%

29%35%

14%7%

13%

3%

Positive Change No Change Negative Change

25%14%

57%

78%

19%8%

32%22%

50%

64%

Positive Change No Change Negative Change

19%13%

Hispanics Total U.S.



Shopping Together and More OftenOn the Rise: The Growing Infl uence of the Hispanic Shopper

When the U.S. Hispanic shopper goes grocery shopping, she usually has company. More U.S. Hispanic shoppers do their grocery shopping with family. Hispanics also make more stock-up and routine shopping trips and spend more on those trips on average than the general population.

You mentioned making routine, regular shopping trips. Who typically goes with you on these trips?

No one else goes with me

Spouse/partner

Kids 5 years of age and younger

Kids 6-12 years of age

Parent(s)

Kids 13-17 years of age

Adult children

Other relatives

Friend(s)

Roommate(s)

Someone else

22% 46%

40% 32%

16% 10%

15% 8%

14% 7%

10% 6%

12% 5%

6% 3%

6% 2%

3% 1%

1% 1%

Hispanics shop with

company on nearly

80% of their shopping

trips. More than half

of Hispanics with

children are taking them

shopping.



During the last year, Hispanic shoppers frequented dollar stores, mass merchandisers and grocery stores more than the general U.S. population. Meanwhile, both Hispanics and total U.S. shoppers reported a decline in trips to drug, limited assortment, convenience, and natural/organic stores.

Compared to last year, how often do you shop at each type of store for any reason?

19%

18%

14%

5%

5%

1%

3%

-2%

Dollar stores

Mass merchandisers

Supermarkets

Warehouse clubs



For which of the following types of signifi cant dates or holidays do you typically prepare a special meal for your family?

Hispanics keep social ties strong with celebratory meals.

55%

54%

50%

25%

1%

14%

Special family days

Religious holidays

U.S. holidays

Hispanic holidays

Other

None of the above


Stock-uptrip

Routine trip

Fill-intrip

Occasion-based trip

Specialty trip

3.1

2.2

4.03.5

2.4

4.03.8

2.52.1

3.5

Hispanics spend 14% more on routine shopping trips and 10% more on stock-up trips and shop more frequently.

About how much do you spend on each of the following types of shopping trips?

In a month, how often do you make these trips?

$128.60 $117.20

$111.50 $98.20

$79.20 $57.60

$78.70 $41.90

$69.90 $51.30

Stock-up trip

Routine trip

Occasion-basedtrip

Fill-in trip

Specialty trip


Mealtime is a priority in the Hispanic household. When it comes to meals, 60% of Hispanic shoppers are planning

meals at least two days in advance. Family requests and healthy choices are stronger infl uencers for Hispanic

households’ mealtime choices than amongst the general population.

Cooking at Home and Eating With Family

U.S. General U.S. Hispanics Population

Cooking more frequently at home 62% 52%

Prepare specifi c meals requested by family members 24% 14%

Agree with “we eat healthy foods even though they are more expensive” 47% 42%

Eat more natural foods 38% 27%

Eat more organic foods 31% 22%



Driving Digital and Mobile Trends in Grocery As a group, Hispanics are heavier users of text messaging, mobile websites, tablets, smartphones, and mobile apps than the general population. Staying in touch with family, friends and extended family are key drivers of technology use for Hispanics, as well as the desire to share product information and tips.

Hispanic shoppers are more likely than the general population to use new technologies such as smartphones and tablets to access the Internet, 50% vs. 34% respectively. They also use more grocery shopping apps and list functions on mobile devices.

U.S. General U.S. Hispanics Population

Use a smartphone 51% 41%

Regularly text message 47% 42%

Stream music from websites such as Pandora

30%

24%

Use video/TV streaming websites such as Hulu/YouTube

29%

24%

Regularly use a mobile app 19% 14%

When it comes to grocery shopping planning, once again Hispanics’ use of technology tends to be more cutting-edge and socially oriented. They are more likely to visit product review sites, local review sites and cooking or recipe sharing sites. They are early adopters of new technologies, ahead of the general U.S. population, and surpassing U.S. Millennial and U.S. Gen X shoppers in their use of sophisticated interactive tools and sites like social networking, group buying, online community websites, and mobile technology.



Websites

Social networking sites like Facebook or Twitter

Text messaging

Smartphones like Blackberry, iPhone & Android

Videos/TV streaming websites like Hulu, YouTube, etc.

Music streaming websites like Pandora, YouTube, etc.

Group buying sites like Grouponor Google offers

Online community websites for a specifi c interest

Mobile websites

Blogs

Tablet computer like iPad, Samsung Galaxy, etc.

None of these

47% 55%

53% 46%

48% 46% 47%

42% 36%

35% 29%

19% 29%

24% 22%

12% 11%

8%

3% 5% 5%

14% 11%

4%

15% 12%

8%

15% 13%

12%

18% 18%

15%

30% 24%

18%

What online or interactive tools do you use regularly?

Hispanics August ‘12Total U.S. August ‘12Total U.S. July ‘11



Spanish Language Keeps Cultural Roots Strong

U.S. Hispanics relate to two identities — American culture and Hispanic culture. Language is a bridge used by many Hispanics to stay connected to their roots. Most of those we surveyed preferred to speak at least some Spanish at home, and that preference held strong across generations. Nonetheless, the majority of U.S. Hispanics understand English, with a slight drop among the 65 and older crowd. Also notable is a strong preference among the 18 to 34 year olds for Spanish language media.

What language do you speak at home?

What language do you prefer to watch TV, read magazines and newspapers, and listen to radio?

38%

11%

21%

40%

28%

Spanish more than English

46%

69%63%

49%57%

Both Spanish and English

15%20%

16%12%15%

English all the time

34%

12%21%

39%

28%

Spanish more than English

48%

65%59%

43%

52%

Both Spanish and English

19%23%21%18%20%

English all the time

Total Gen Y 18-34 Gen X 35-44 Boomers 45-64 Silents 65+

Total Gen Y 18-34 Gen X 35-44 Boomers 45-64 Silents 65+

U.S. Hispanics ages 18 to 34 report a strong preference for Spanish language media.



For More InformationFor more information on The Why? Behind The Buy HISPANIC, including customizing the analysis, contact: Elena Etcharren Senior Vice President, AMG Strategic Advisors, [email protected], or visit www.acosta.com/hispanic-why.

Taking Insights Into ActionLeveraging the enormous opportunity and potential of the Hispanic market will be key to the success of CPG manufacturers and retailers. AMG Strategic Advisors can help companies design an effective Hispanic market strategy and answer key questions, such as:

• How do Hispanic Millennials differ versus the general population?

• How should we think about segmenting the Hispanic shopper?

• How should we position our brand to grow with Hispanic shoppers?

• How do Hispanics perceive and defi ne value?

• What product or package innovation do we need to reach Hispanic shoppers?

• Which categories are Hispanic children infl uencing most?

• How should we measure ROI on Hispanic marketing?

• What types of shopper marketing are most effective?

• How should we address Hispanic specialty retailers?

• How should we structure our organization to maximize the opportunity with Hispanic shoppers?

• What are the differences in Hispanic male versus female shoppers?

The Why? Behind The Buy HISPANIC is an exclusive survey produced by AMG Strategic Advisors and Univision that provides valuable insights into U.S. Hispanic shopper behavior. This research was fi elded in August 2012 with a random sample of 1,012 Hispanic shoppers via Acosta’s proprietary ShopperF1st online and face-to-face survey, which was available to respondents in both Spanish and English translations. The Why? Behind The Buy survey and report on the total U.S. population has been produced bi-annually by Acosta Sales & Marketing since 2009.

About Univision Communications Inc.Univision Communications Inc. (UCI) is the leading media company serving Hispanic America. Its assets include Univision Network, one of the top fi ve networks in the U.S. regardless of language and the most-watched Spanish-language broadcast television network in the country reaching 96% of U.S. Hispanic households; TeleFutura Network, a general-interest Spanish-language broadcast television network reaching 88% of U.S. Hispanic households; Univision Cable Networks, including Galavisión, the country’s leading Spanish-language cable network, as well as Univision telenovelas, a new 24-hour cable network dedicated to novelas, Univision Deportes Network, a new 24-hour cable network dedicated to sports, ForoTV, a new 24-hour Spanish-language cable network dedicated to news, and an additional suite of six cable offerings - De Película, De Película Clásico, Bandamax, Ritmoson, Telehit and Clásico TV; Univision Studios, which produces and co-produces reality shows, dramatic series and other programming formats for the Company’s platforms; Univision Television Group, which owns and/or operates 62 television stations in major U.S. Hispanic markets and Puerto Rico; Univision Radio, the leading Hispanic radio group which owns and/or operates 69 radio stations in 16 of the top 25 U.S. Hispanic markets and Puerto Rico; Univision Interactive Media, a network of national and local online and mobile sites including Univision.com, which continues to be the #1 most-visited Spanish-language website among U.S. online Hispanics, Univision Móvil, a longstanding industry-leader with unique, relevant mobile products and services, and Univision Partner Group, a specialized advertising and publisher network. Headquartered in New York City, UCI has television network operations in Miami and television and radio stations and sales offi ces in major cities throughout the United States. For more information, please visit Univision.net.

AMG Strategic AdvisorsAMG Strategic Advisors is the growth strategy consulting unit of Acosta Sales & Marketing, assisting clients in accelerating profi table growth through insight-driven strategies and advanced analytics. Comprised of consultants with in-depth experience in marketing strategy, including experience at leading CPG manufacturers, AMG Strategic Advisors provides best-in-class strategy consulting, brand positioning, shopper & marketing insights, and data analysis. AMG Strategic Advisors collaborates with clients to drive multicultural and multigenerational growth on an individual project or on an outsourced services basis.

AMG Strategic Advisors offerings include:

• Strategic Planning & Consulting

• Growth Platform Identifi cation

• Demand Driven Innovation Strategies

• Brand Positioning and Brand Strategies

• Consumer Insight and Segmentation

• Shopper Insights / Path-to-Purchase Insights

• Channel / Go-to-Market Strategies

• Shopper Marketing Strategies

• ROI / Measurement Solutions

• Operational / Organizational and Supply Chain Effectiveness



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On the Rise: The Growing Inﬂuence of the Hispanic Shopper