Deeper Dive Needed Into Hispanic Produce Shopping

By Jim Prevor, Editor-in-Chief, Produce Business

This piece leaves us in a quandary as to what produce retailers should do. It is, of course, true that as immigrants acculturate they behave differently, which means they shop differently and eat differently. And certainly in marketing and retailing, one should be aware of these differences. So this segmentation is useful. But the difficulties abound.

To start with, the importance of segmentation into broad buying groups may pale before the importance of knowing what countries the Hispanic shoppers come from. So, while it is useful for a retailer to know that the culturally Hispanic cohort overwhelmingly looks for Hispanic brands and always buys well known and trusted brands, those brands can be very different if the customer is Mexican, Cuban, Puerto Rican or Guatemalan. So even knowing the segmentation, a retailer needs to know a lot more about the customer to be able to effectively use the specific knowledge to procure and merchandise effectively.

Another important consideration is income. Surely even within these segmentations, behavior differs by income. And what about geography? Individual behavior can be reinforced or de-emphasized based on community. An immigrant from Mexico may pass the psychographic test as a “Latinista,” but his behavior is likely to be very different if he lives in a border town filled with first-generation immigrant Mexicans or if he is in rural Maine without another Mexican — or Mexican food store — in sight.

Then comes the fact that people know how to protect their interests. Just as highly acculturated Jews might shop at Costco year-round and then circle back to a store that sells Jewish ethnic foods at Passover, Hispanics are perfectly capable of buying at Aldi, and then going to a store with broad ethnic offerings when preparing a feast for friends and family on Cinco de Mayo.

Indeed one of the things that distinguish the present day from days gone by is that consumers have such an array of choices that they do not have to ally themselves with one store. It is easy to imagine Hispanic consumers using the long tail of Internet shopping to buy difficult-to-find ethnic foods and then stocking up on more standard fare at the local Aldi.

Oddly enough, all the focus on ethnic merchandising and marketing plays out in produce in an unusual way. Stores focused on Hispanics will carry special grocery brands that are not familiar to Anglos or Asians, so these stores probably won’t be the primary shopping venues for non-Hispanic shoppers. Yet, most produce departments are perfectly acceptable to Hispanics and non-Hispanics. There may be a few Hispanic specialties, but Hispanics of all segments enjoy many fruits and vegetables eaten by people of different ethnicities, so the produce departments of mainstream retailers and Hispanic retailers have similar assortments.

Hispanic-oriented grocery stores may not be much of a threat to mainstream grocers when it comes to pulling Anglos and Asians into their stores for grocery items, but these retailers often buy produce at value prices off terminal markets and, as a result, can be very powerful competitors when it comes to fresh produce. Mainstream supermarkets may find produce sales vulnerable in areas with many ethnic specialty stores, as non-Hispanic consumers who won’t buy groceries at Hispanic stores will happily buy fresh produce from stores focused on the Hispanic clientele. Equally, of course, without the assortment of Hispanic grocery items necessary to attract Hispanics, conventional supermarkets can still compete on fresh produce and draw Hispanics in with a dynamic produce offering.

These types of segmentation are good to keep in mind, but they are often difficult to turn into powerful merchandising strategies. After all, if a store is located in a very homogenous area, say a border Mexican town filled with mostly recent immigrants, then segmentation is not necessary because the store is mostly going to tailor to its local community — as stores always have. On the other hand, if one is in a highly diverse community, then how is a retailer to segment out shoppers?

And for shippers, what precisely is an apple shipper supposed to do with the knowledge that Hispanics have varying degrees of interest in ethnic foods and Spanish culture?

Another issue is that within marketing for every action, there is a reaction. While it is great to know “Bicultural Hispanics” may prefer to speak in Spanish, this tells us little about whether offering signage in Spanish and having bilingual employees will boost business. Even if the “Bicultural Hispanics” are attracted by this marketing, many Hispanics offended by being identified as just off the boat or over the border will be repelled by such efforts, and who knows what Anglos or Asians will think?

Ethnic retailers are often successful because of a razor-sharp focus on a specific group. It is often not obvious to an outsider, but shoppers know the store is targeted toward Hondurans from a particular city or Peruvians from a port district. Segmentation data is important background, but chain retailers looking to be successful with ethnic minorities need to allow stores the opportunity to micro-market and focus on the segment within 3 miles of the store. That is the winning segmentation when marketing today.