Already the nation’s largest minority group, the Hispanic population continues to grow.
This diverse group, with buying power of $1.5 trillion, includes those of many backgrounds and to think of them as a single entity can be a mistake for restaurants looking to welcome them at the table.
Harold “Lefty” Encarnacion opened Millie’s International Market in Columbus, Georgia, partly as a food-centered survival strategy. When he and his wife, Millie, moved to the area, they had to send away to New York for the ingredients used to make traditional Puerto Rican dishes that are a rich part of their cultural heritage.
In 1986, they opened the market, which has grown to include a restaurant at which he prepares foods of their homeland and beyond. “We like to say it’s Caribbean food. Puerto Rican for sure, but a lot of influences from other islands,” Encarnacion says. “It is definitely Hispanic food but not at all like Mexican food as so many people automatically think. It’s a world apart, very different.”
And indeed, that’s an essential truth about Hispanic food and, by extension, the burgeoning Hispanic demographic group. Already the largest minority population in the United States with an estimated population of 54 million, the numbers are projected to continue growing at a pace exceeding that of the general U.S. population. By 2050, it is estimated that the total U.S. population will be 23% of Hispanic origin, up from the present 17%. Implications are far-ranging and touch on many aspects, including restaurant business. Understanding the trends, traits and unique behaviors of the Hispanic market is far from simple and yet for restaurant operators, it can be critical.
Gerry Fernandez, founder and president of the Minneapolis-based Multicultural Foodservice & Hospitality Alliance (MFHA), an organization dedicated to demonstrating the economic benefits
of a multicultural approach, says Hispanic can be a confusing word.
“You can’t think of the Hispanic demographic as one group or treat them that way,” he says. “Of course it includes Mexican — that’s the largest group — but it also counts Cubans, Salvadorans, Puerto Ricans and Columbians. And that’s just for starters. Within each group are significant cultural differences. To lump all of them together doesn’t work, especially with food preferences.”
Even Encarnacion found himself surprised at the diversity within the Hispanic population. “When Millie’s opened is when I realized how many different groups we could serve. There are a lot of Hispanics here in the tri-city area but they’re spread out so you maybe don’t realize it,” Encarnacion explains. “At least 18 or 20 distinct populations come and even that is changing. We are starting to see a lot more Africans and Haitians. For each group, there are differences and we try to cater to them all in the best way we can. We’re all Latinos but we also are different.” The tri-city area, which includes Columbus, is estimated to have a Hispanic population of around 12,000, with about 600 restaurants in the area to serve them.
Conventional wisdom, backed up by data, indicates that Hispanic diners as a whole are most likely to select quick-service restaurants when dining out. According to the Rosemont, Ill.-based NPD Group, more than 80% of Hispanics’ restaurant visits take place at QSRs such as Wendy’s, Chick-fil-A and Arby’s. But, in fact, that is not significantly higher than the U.S. population at large, with about 78% of restaurant visits taking place in the QSR segment. The larger truth is that fast-food chains, led by McDonald’s, dominate the restaurant landscape for all demographic groups.
Carlos Santiago, research director for the Fairfax, Va.-based Association of Hispanic Advertising Agencies (AHAA) and founder of the Santiago Solutions Group, warns against having tunnel vision when examining dining-out patterns. “It’s a misconception that Hispanics only shop at Walmart and eat at Taco Bell. Especially after the recession, there is a large number, about 15 million, of what we describe as Upscale Hispanics (with household incomes of $50,000 to $100,000) who love to dine out at trendy restaurants,” he says. He also adds that it is a growing segment well populated by young consumers; the median age of Hispanics is about 10 years younger than it is for non-Hispanics. Often they are second- or third-generation, easily able to switch between their cultural background and American experiences. “They have cultural duality and inhabit both worlds very well,” Santiago notes. This upscale group is reported to account for $500 billion of total Hispanic spending of 41.5 trillion.
Jumping up to the casual dining segment, the AHAA study showed that Hispanics visit that segment more often than upscale non-Hispanics. Of a list of restaurants including Applebee’s, Outback, Black Angus, Macaroni Grill and Red Lobster, 90% of Upscale Hispanics dined at one of them versus 82% of non-Hispanics.
A common trait in the Hispanic population is a highly social nature, one that embraces extended families and large circles of friends, according to Santiago. He says that makes the group tailor-made for dining out. “Marketers and restaurant owners need to pay attention to what drives Hispanics to particular restaurants. The AHAA Upscale Hispanic Report research shows that this group looks for trendy restaurants that are new and in style. Hispanics love to be the first to discover something and then tell their friends about it. They gravitate to places that have strong energy, a certain volume and liveliness. They go out in groups. For them it’s a very social experience,” he says.