Hispanics Hop on the Latest Beer Trends

Hispanics Hop on the Latest Beer Trends

Hispanics are trendsetters. This demographic is the largest self-identifying ethnic group in the U.S. and has more than $1 trillion in spending power. So where are they spending? When it comes to celebrating with family and friends or relaxing at the end of a long day, many of these consumers are reaching for cold and refreshing beers.

Beer represents roughly half of Hispanics’ beverage alcohol volume sales and is in 45% of all Hispanic households, which is more than non-Hispanics (38.8% of households). As this population continues to grow—Hispanics are expected to make up 27% of the U.S. population by 2040—it will be crucial for retailers to know their beverage preferences in order to serve their needs across retail channels and in bars.

So what types of beer are Hispanics buying?

Hispanic consumers are increasing purchases from the above-premium beer segment, which grew more than 9.5% year-over-year as of May 2014. Comparatively, the growth among non-Hispanics was just over 7.1%. And imports have surpassed premium light’s dollar share of the beer market among Hispanics, reaching 31%. Mexican imports, which gained 86% of their volume from premium lights, have driven this group’s preference for beers from abroad. Of the top 10 growing brands among Hispanics, half are Mexican imports. Also appearing among this segment’s top brands are flavored offerings, such as fruit infusions, ciders and shandies.

Hispanics’ origins and ages are likely behind these trends. Latinos are a diverse group, with roots in Mexico and various countries across Central America, South America and the Caribbean. However, Mexicans are the largest Hispanic origin group, making up 64.6% of all Hispanics, which could explain the segment’s preference for imports from the country.

In addition, Generation X, those consumers between 35-54 years old, are most likely to purchase imports. Meanwhile, Millennials (34 years old or less) are more likely to purchase flavored items compared to any other generation. In general, Hispanics skew young: 59% are under the age of 35. And as more Hispanic consumers turn 21 and come of age, this demographic will likely remain at the forefront of the latest trends.

But how can brewers accommodate these consumers now?

Recent innovations in the beer category include flavors that tap into the “chelada” tradition. Chelada is a Mexican beverage made with beer, lime juice, and assorted sauces, spices, and peppers. It is typically served in a chilled, salt-rimmed glass. Bud Light’s “Rita” and Redd’s Apple franchises are both recent innovation based on cheladas that connect with Hispanic consumers’ preferences for flavored beers. Brewers are also capitalizing on Hispanic buying power by increasing the distribution of Mexican import brands across the U.S. (up 4.0% year-over-year as of September 2014), especially in the convenience channel (up 7.3%).

The convenience channel represents a big opportunity for beer brands to reach Latino consumers. Price and proximity factor into the Hispanic purchase decision when it comes to different brews. Within convenience stores that skew Hispanic, beer dollar volume is up 5.8% versus the previous year, compared to a growth rate of just 2.2% for the channel as a whole.

Language can help brewers reach Hispanics

Appealing to Hispanic consumers is crucial for marketers looking to engage two markets that matter: Hispanics and Millennials are two of the fastest growing and increasingly important consumer groups in the U.S. But to engage with those who fall in both groups, Hispanic Millennials, it’s imperative to understand language’s effect in order to optimize messaging for this demographic that increasingly identifies as bilingual.

In the past decade alone, the number of bilingual speakers has increased 73%, beating out English-dominant speakers to become the largest Hispanic subgroup. In this study, Nielsen found that Spanish-language advertising did a better job connecting with bilingual Millennials in a range of scenarios, particularly when the ad’s content was emotional in nature. Ads featuring social interaction were generally more emotionally engaging and memorable for bilingual Millennials in Spanish than in English. Similarly, branding sequences were more effective in Spanish than in English.

So while new products may appeal to Hispanics’ tastes and convenience store sales are attractive to their wallets, brands won’t find success if consumers don’t hear about these options. Think twice about language and engage Hispanic millennials using their points of passion: music and sports.