2018 has been an eventful year for Hispanic grocery stores. We saw Bodega Latina expand to Texas with an acquisition of Fiesta Mart, Winn-Dixie’s Fresco Y Más concept grew in Florida, and Albertson’s El Rancho Supermercado officially entered the Houston market.
Acquisitions and consolidations have been accelerating at a break neck pace the past several years and they will continue to in 2019.
But what is driving this trend? Understanding the underlying drivers of these acquisitions and consolidations in the Hispanic grocery store space can help us see what the future of Hispanic grocery holds in 2019.
We would naturally think what is driving this renewed activity in the Hispanic grocery space is being driven by demographic growth. However, Hispanic immigration has come to a halt, in fact there has been a net negative immigration into the U.S. the past several years.
Hispanic immigration in the 80s and 90s drove the proliferation of many of the first Hispanic grocery stores here in the U.S. So if Hispanic immigration isn’t driving it, what is?
Much of the U.S. Hispanic growth in the U.S. is from native born, second-generation Hispanics. While U.S. born Hispanics didn’t drive the first Hispanic grocery push in the U.S., second-generation Hispanic millennials have seen food as a key way to connect with their Hispanic heritage.
According to our Hispanic Millennial Project report, 73% of U.S. born Hispanic millennials choose food and beverages that connect them to their culture or heritage Looking at an even younger generation, findings from our We Are Gen Z report point to a similar trend for Hispanic Gen Z in which 52% of Hispanic Gen Z are encouraged by family members to eat foods from their culture.
While U.S. born Hispanics may explain some of the renewed activity in Hispanic grocery stores, proportional to their size in the U.S. they cannot explain it all.
Another trend we see driving this activity are non-Hispanic consumers seeking authentic food experiences. Millennial and Gen Z generations are more open to seeking food outside their cultures than ever before.
For example, 46% of non-Hispanic white millennials have consumed a traditional Mexican hot sauce in the past three months. Additionally, 49% of non-Hispanic white Gen Z state that they enjoy trying food from different cultures.
We’ve seen this search for authenticity also bear out in the slow decline of sales from traditional grocery stores, Hispanic grocery stores have experience converse results as of late.
With the resurgence of Hispanic Grocery stores has come businesses aimed at bringing Hispanic Grocery into the 21st century. Apps like Traiilo (prounounced like “traelo”) are building a mobile application for people to shop for Latin groceries. Traiilo allows you to order Latin products from local Hispanic supermarkets and have them delivered to your door.
In 2019 we are bound to see more technology companies aimed at making Hispanic Grocery shopping a more enjoyable experience.
Hispanic grocery stores should start to think about how to make the Hispanic grocery experience relevant to a Total Market in 2019.
As non-Hispanic audiences seek authentic food experiences, Hispanic Grocery stores are at the top of the list. Technology solutions can be a powerful tool to appeal to both Hispanic and non-Hispanic audiences.
The key to growth will be to appeal to a wider audience while holding on to what has made Hispanic Grocery stores a success, authenticity.
This blog post was originally published on Abasto