Over the next several decades, the U.S. grocery retail experience will increasingly be shaped by multicultural consumers, based on population growth and current shopping behaviors, new research from CPG sales and marketing firm Acosta finds.
Net U.S. population growth is estimated at 98 million from 2014 to 2060, with the Hispanic population projected to rise by 64 million in that time, according to Acosta’s first “Multicultural The Why? Behind The Buy” study, released in April. Growth is forecast at 22 million for the Asian-American population and 18 million apiece for the African-American and multi-racial segments, while the Caucasian/Non-Hispanic population is expected to decline by 16 million.
“It is an unmistakable reality that we live and operate in a New America,” observed Michelle Mendoza, director of marketing and customer experience of New York-based Associated Supermarket Group (ASG), which serves urban supermarkets in the New York tri-state area and other cities along the Eastern Seaboard operating under banners including Associated, Met Fresh and City Fresh. “New York is a majority minority market and our store owners are 100% multicultural entrepreneurs who know their consumers are a reflection of the American future.”
“The growing multicultural population will drastically impact the grocery industry, and we have already noticed key differences between shopper groups,” noted John Clevenger, senior vice president and managing director for Acosta Strategic Advisors.
For example, more multicultural shoppers find the grocery shopping experience enjoyable. Acosta found that 72% of African-American, 65% of Hispanic and 61% of Asian-American consumers surveyed enjoy shopping for groceries, compared with 56% of Caucasian/Non-Hispanic consumers.
Similarly, grocery shopping tends to be more of a family affair with multicultural consumers. Seventy-two percent of Asian-American, 67% of Hispanic and 63% of African-American consumers say they shop with others during their regular grocery purchasing trips versus 55% of Caucasian/Non-Hispanic customers.
“Through the research that we have commissioned and inherently, we know that many of our shoppers live in multi-generational households,” said ASG’s Mendoza. “Therefore, familial shopping in our stores is a norm and Customer Appreciation Days become important promotional events that reward and thank the family for the business, not a single consumer. Many of our stores collaborate with the neighboring churches or clinics to celebrate the families and we ensure the brands support these promotions and continue to earn their right to market to multicultural consumers.”
Mike Solis, director of operations for Arizona-based, Bashas’-owned Food City, agreed that shopping trips tend to be experiential for many multicultural customers. “We tend to see families and friends shopping together at our Food City stores,” he said. “As a family-owned and operated company we understand and value culture and diversity; therefore, it is important for us to provide our customers a unique shopping experience through offering products and brands — at affordable prices — that they would likely find in their country of origin.”
He added, “For our customers, going to Food City means enjoying a piece of their culture. Whether it’s by having a freshly made traditional dish in our Cocina Dos Ranchitos with their family before — or after — grocery shopping, receiving personal attention from our members, enjoying the colorful displays the moment they set foot in our stores or simply by hearing their favorite music playing in our in-store radio, our customers enjoy the personal experience in our stores.”
Multicultural shoppers also tend to shop for groceries across more retail channels. According to Acosta’s study, Hispanic customers purchased groceries at an average of 3.84 types of stores in the previous six months, compared with 3.53 stores for Asian-Americans, 3.33 stores for African-Americans and 3.26 stores for Caucasian/Non-Hispanic shoppers.
Among the retail channel findings, 54% of Asian-Americans shopped for groceries in a warehouse/club store (versus 38% of total U.S. shoppers), and 47% of African-Americans did grocery shopping in a dollar store (versus 39% of total U.S. shoppers). Meanwhile, 23% of Hispanic customers said they shopped in a Hispanic/ethnic grocery store during the past six months, compared with 3% of all U.S. shoppers.
More multicultural consumers, too, are embracing the latest retail grocery trends — including ready-to-eat meals and digital shopping services — than the overall U.S. population, Acosta noted.
For instance, in the previous 30 days, 76% of Hispanic, 70% of Asian-American, 69% of African-American and 59% of Caucasian/Non-Hispanic shoppers brought home prepared food from a grocery store, compared with 62% of all U.S. shoppers. Thirty-three percent of U.S. shoppers ordered groceries online for delivery or pickup in the past 30 days versus 57% for Hispanic, 44% for Asian-American, 41% for African-American and 29% for Causcasian/non-Hispanic consumers.
“Some of our multicultural customers do seek convenient meal solutions,” said Solis of Food City, “turning to our Cocina Dos Ranchitos and our delis for convenient and tasty meal solutions. Other customers prefer to shop for ingredients to prepare their own meals at home. Our stores are always ready to meet our customers’ individual needs.”
Digitally savvy customers
Acosta’s findings show that multicultural grocery shoppers are comfortable with digital interactions. Among Hispanic customers, 44% said they read a digital grocery flyer/circular (versus 35% of total U.S. shoppers), and 35% use a mobile device to locate products in-store (versus 20% of total U.S. shoppers). Of African-American consumers polled, 38% said they use a search engine to find recipes online (versus 28% of total U.S. shoppers), and 27% use a touchscreen kiosk in stores (versus 20% of total U.S. shoppers). Also, among Asian-American shoppers, 37% reported using a shopping list on their mobile device (versus 26% of total U.S. shoppers), and 36% said they use a product coupon on their smartphone at checkout (versus 27% of total U.S. shoppers).
That holds true at Associated stores, where, according to Mendoza, “the multicultural consumer is a digitally savvy and connected consumer. Social and digital advertising is a third of our consumer marketing strategy to drive banner and private brand awareness to the network of ASG stores. To ensure our independents have a presence in online shopping, we have ushered in a partnership with the Rosie application as an in-house solution and Instacart for the stores who do not want to bring ecommerce in-house but want to be online.”
she added, “We are a 52-week advertiser. Our banners are present in weekly circulars, social media, Google ads, radio and television for special consumer promotional events. All advertising is done in dual language, both English and Spanish language advertising, taking both culture and context into every piece of creative.”
“We continuously keep our customers at the forefront of our marketing and advertising decisions,” said Food City’s Solis, but he acknowledged, “while we do offer weekly text alerts for our customers, we have not gotten a lot of requests for other digital options, such as online shopping and delivery/pickup services.”
Meeting customer preferences
A sizable percentage of multicultural shoppers express interest in eating healthier and exploring new kinds of meals. Forty-nine percent of Hispanic and Asian-American and 48% of African-American consumers agreed they often buy natural/organic products because they’re healthier, compared with 33% of Caucasian/Non-Hispanic customers, Acosta said. And just 24% of Caucasian/Non-Hispanic shoppers said they would take cooking classes to learn how to prepare new meals/dishes versus 40% of Hispanic, 38% of African-American and 34% of Asian-American consumers.
“Multicultural shoppers recognize the link between food and their health and are significantly more likely to buy natural and organic foods even though they are more expensive,” Clevenger explained. “Understanding these unique values and preferences is vital for manufacturers and retailers to win with this emerging consumer group.”
Multicultural consumers’ strong brand engagement also underscores the need to better comprehend their grocery shopping preferences, Acosta added. Sixty-five percent of African-American and 59% of Hispanic customers indicated they’re passionate about their favorite grocery brands versus 47% of Caucasian/Non-Hispanic and 46% of Asian-American shoppers. And 49% of Hispanic, 46% of Asian-American and 41% of African-American consumers say they buy grocery brands that are authentic to their ethnic heritage, compared with 26% of Caucasian/Non-Hispanic shoppers.
“Customers are savvy and know when a product is authentic, as in most imports and when a product is simply trending,” said Mendoza. “One thousand of the top international products are available through our International foods program with a Hispanic-focused item assortment along with a growing Asian offering to meet the needs of our stores. Condiments, dairy and sauces are drivers of these categories.
“Consumers seek convenience and savings regardless of race or ethnicity. The multicultural influence is undeniable in the flavors and demand for fresh is a driving force behind the meal solutions. Produce departments are carrying more chopped and packed international ingredients for shoppers to ‘grab and go’ to complete a generational recipe at home. Our store owners are an ethnically diverse group, Hispanic, Italian and Asian operators who know firsthand what international palates crave. Hot bars in many of the neighborhoods the stores serve offer an array of traditional foods and stock plenty of nostalgic grocery products.”
“Buying grocery brands that are authentic to our shoppers’ culture is important because many of them grew up with these brands,” noted Solis. “Many of these brands are national brands, such as Colgate, and our customers are very loyal to them. Some of the strongest categories are household items, cleaning supplies, health and beauty and main meals.”
At Food City, Solis said, “We are a family-owned and operated business whose ancestors migrated to the United States over a century ago, and as such we understand the importance of celebrating traditions. As part of that we are very intentional in creating a unique and embracing shopping experience that allows our customers to feel connected to their culture.”