Sales Trends

ANALYSIS SHOWS IMPACT OF HISPANIC GROWTH
(Marketing Daily)

According to Marketing Daily, statistics confirming the overall growth of Hispanics within the U.S. population and their spending power are readily available and frequently cited, but quantifying the Hispanic market's impact on specific consumer goods categories and industries can prove more elusive.

A new analysis of Census Bureau and Bureau of Labor Statistics Consumer Expenditure Survey data for 2005 to 2008 by Latinum Network sheds light on the true monetary impact of the Hispanic market on the food and beverage and restaurant industries.

Some of the findings:

• Between 2005 and 2008, new Hispanic spending offset 84% of the decline in real demand across the entire food, beverage, and restaurant industries. Total U.S. food sales grew by $15 billion (to $469 billion), beverage sales grew by $1 billion (to $114 billion), and restaurant sales declined by $19 billion (to $325 billion), for a combined loss of $2.9 billion (-0.003%). Within that total, sales generated by non-Hispanic consumers declined by $17.7 billion, or 2.4%, while Hispanic consumer sales rose by $14.8 billion, or 18.

• Hispanics represent the sole growth market within many key food, beverage and restaurant categories, and the primary demographic growth opportunity for a $566.7 billion majority of the restaurant and F&B industries.

Specifically, Hispanics represent 85% to 100% of real-growth opportunity for the restaurant industry (which had $325.4 billion in total sales in '08), as well as for at least 20 declining or stagnant F&B categories (which had combined sales of $241.3 billion in '08). Hispanics generated $4.9 billion in new sales for the restaurant industry, and $4.3 billion in new sales for the declining/stagnant F&B categories between 2005 and 2008.

Among the stagnant F&B categories, compound annual sales growth among non-Hispanics ranged from zero to -2.9%, while compound annual growth rate (CAGR) among Hispanics ranged from 3% to 12%. For example, cracker sales declined by 0.1% among non-Hispanics, but rose 12% among Hispanics; fish/seafood declined 1.3% among non-Hispanics, but rose 10.2% among Hispanics; and candy/gum declined by 1.7% among non-Hispanics, but rose 8.2% among Hispanics. Health/ wellness concerns drove beef sales down (-1.2%) among non-Hispanics, but ethnic preferences produced a category gain of 3% among Hispanics.

In addition, Hispanics represent 20% to 85% of real-demand growth opportunities among growing F&B categories that represented another $245 billion in sales in 2008. For these categories, Hispanics generated $5.9 billion in new market value, or about 20% of growth, between 2005 and 2008. For example, frozen meals are the highest-growth food category among Hispanics (30% CAGR, representing $645 million in sales between '05 and '08, versus 18% growth among non-Hispanics). Within the growth categories, Hispanics also generated particularly significant dollar sales gains within poultry, pork, tea, fats/oils, fresh vegetables, ham, miscellaneous prepared foods and noncarbonated fruit drinks, among other categories.

Among Hispanics, price-adjusted CAGR grew in every category between '05 and '08, including breakfast/fast food (8.1%), breakfast/full service (1.8%), lunch/fast food (3.3%), lunch/full service (8%), dinner/fast food (3.1%) and dinner/full service (2.3%). In particular, Hispanics are increasingly likely to eat out during the work day. In contrast, among non-Hispanics, CAGR declined in every category but breakfast/fast food, which was up a mere 0.4%.

The article indicates that to win Hispanics' loyalty, brands must make authentic appeals to their unique behaviors and tastes through distinct products, channels, messaging and marketing strategies.

ETHNIC FOODS TO GROW 20% BY 2014
(Marketing Daily)

Mintel predicts ethnic food sales will reach a record $2.2 billion this year, and advance by another 20% between 2010 and 2014, according to a Marketing Daily article.

Population growth has driven steady growth for ethnic foods since 2004, the global research supplier reports. More than 1 million foreigners have become permanent legal U.S. residents each year since 2005.

The article states Mexican/Hispanic foods dominate, holding a 62% of ethnic foods' share. In fact, with nearly six in 10 consumers in Mintel's surveys now reporting that they cooked Mexican food within the past month, Hispanic foods are so mainstream that they are hardly considered ethnic anymore. But the category's real growth-drivers are Asian and Indian foods, which showed 11% and 35% growth, respectively, between 2006 and 2008.

IN-STORE SAMPLING BOOSTS REPEAT PURCHASES
(Brandweek.com)

New research suggests that free giveaways can help drive long-term sales and increase purchases of other items from the product line.

According to the research, whether via a new product launch, line extension or established brand, sampling programs drove a 475 % sales lift the day of the event compared to non-sampled households. Research was conducted by Knowledge Networks-PDI on behalf of the marketing services company PromoWorks.

Research findings:

• Those who sampled an item were 11 % more likely to purchase it again during the 20-week period that followed.
• They were also 6 % more likely to buy another item from the brand franchise.
• Participants were 9 times more likely to purchase a line extension on the day of the sampling event.

COOKING SAUCES & MARINADES
(Prepared Foods)

Cooking sauces and marinades stand to gain from the current economic slump, as they not only make up for cooking skills many of us truly do not possess, but they are generally inexpensive substitutes for exotic ingredients. According to Prepared Foods, price and variety have contributed to increased sales over the past six years and will continue to support growth.

As of 2007, the cooking sauce/marinade market accounted for $3.3 billion in sales, according to the recent “Cooking Sauces & Marinades – U.S, April 2008” report, published by Mintel International. The market is positioned to achieve some $4.3 billion in sales by 2012. Contributing to this growth is its generally inexpensive price. Coupled with the rising cost of dining out, consumers are eager to expand their at-home cooking options. Another factor contributing to a boost in this category popularity is the ease of purchase at grocery, club and specialty stores, as well as online.

Sauced Up
Total U.S. Sales and Forecast of Cooking Sauces and Marinades, at Current Prices, 2002-2012

Source: Mintel estimates based on Information Resources Inc., InfoScan Reviews Information/Bureau of Labor Statistics, Consumer Expenditure Surveys.

Sauce Claims
Top 15 Cooking Sauce New Product Launches, by Claim, U.S., 2002-2007

Source: Mintel estimates based on Information Resources Inc., InfoScan Reviews Information/Bureau of Labor Statistics, Consumer Expenditure Surveys.