Take a look at some of the opportunities, trends, and challenges from industry profiles updated by D&B First Research editors in recent weeks, with a focus on how Hispanic consumers are creating plenty of opportunities and some challenges for many industries.
Opportunity: Hispanics to Drive Homeownership Growth in the US — Valuing homeownership more than any other demographic, Hispanics are fueling growth in residential real estate in the US, according to a joint report from the Hispanic Wealth Project and the National Association of Hispanic Real Estate Professionals. Hispanics are expanding to new markets too. Besides California and other traditional markets, Hispanics are buying homes in more affordable, nontraditional markets, including Alabama, South Carolina, and Tennessee. Hispanic homeownership made its biggest one-year gain in 2015 in more than a decade, from 44.5% to 46.7%, per the US Census Bureau. Since 2000 the number of Hispanic homeowners climbed 2.8 million while non-Hispanic homeowners dropped by 85,000. Because Hispanics believe that owning a home is an important part of achieving the American Dream, residential construction contractors can count on this group to drive demand for decades, according to Zillow.
See our Residential Construction Contractors report for more on this and other industry opportunities.
Trend: Hispanic Adult Beverage Market Ripe for Growth — The Hispanic adult-beverage market is expected to expand significantly in the US, according to a report by food industry market-research firm Technomic. By 2045 Hispanics could account for more than a quarter of US adults of legal drinking age. Compared to the rest of the US drinking population, Hispanics drinkers tend to be younger, male, and more likely to prefer beer, tequila, and red wine. Whether in a restaurant, bar, or at home, Hispanics tend to consume more drinks and spend more per occasion than the general US population. As the Hispanic market gains buying power, distributors may seek to offer a wider assortment of products aimed at this audience.
Find more information in the Beer, Wine & Distilled Spirits Wholesalers industry profile.
Challenge: RTO Companies Look to Hispanics and Millennials for Growth — Rent-to-own companies are targeting Hispanics and millennials for growth, according to RTOHQ magazine, but are discovering that negative industry perceptions are hampering success. Focus groups conducted by the Association of Progressive Rental Organizations found these groups believe that rent-to-own is expensive and that the merchandise rented is neither new nor brand-name. Other perceptions include credit concerns that rent-to-own agreements that aren’t completed can hurt credit and that RTO retailers lack posh and professionalism. When these groups were educated on the consumer benefits of rent-to-own, positive reactions among Hispanics and millennials improved. The groups wanted a comprehensive definition of rent-to-own and detailed information on payment options. They were most swayed by a chart describing how the rent-to-own experience compares to credit, retail, and Craigslist. Image-conscious millennials also suggested the industry rebrand itself as “ready-to-own.” Non-Americanized, or unacculturated, Hispanics were most enthusiastic about rent-to-own, especially if store staff understand and support- their culture.
Check out the Consumer Product Rental industry profile for more.
Opportunity: Hispanic Fans Boost Sports Teams — The US Hispanic population is projected to grow by 40% between 2010 and 2050. Hispanics represent an opportunity for teams to grow their fan base, particularly for basketball, football, and hockey. Baseball has traditionally drawn more Hispanic fans, due to the popularity of the sport in Latin America and large number of Hispanic players. Teams in the other sports are targeting the Hispanic audience by developing Spanish versions of their websites, providing Spanish-language broadcasts of games on radio and TV, and sponsoring youth clinics in Hispanic communities.
For more insight, see our Professional Sports Teams & Organizations industry report.
Opportunity: Restaurant Visits Increasing among Hispanic Patrons — Casual restaurants are ramping up efforts to engage with Hispanic consumers, who are visiting foodservice outlets in larger numbers even as total restaurant traffic remains flat. Hispanic patrons accounted for 10.5 billion visits to US restaurants in 2015, a 1% increase from the previous year, according to a new report from the NPD Group. Casual restaurants are competing with quick-service establishments, which remain the most popular segment among customers in the fast-growing demographic. Hispanic restaurant-goers visit full-service establishments at a lower rate than the national average, citing factors such as price and language barriers as reasons for taking their business elsewhere, the report notes. However, family-friendly casual chains are well-positioned to cater to the needs of Hispanic consumers, who are more likely on average than non-Hispanics to patronize chains (74% vs. 60%) and bring their children to restaurants (42% vs. 30%). Applebee’s has launched an initiative to promote its restaurants to young Hispanic patrons via Spanish-language advertisements and social marketing campaigns. The effort has paid off: Visits from Hispanic customers jumped 7% and spending increased 9% from 2014 to 2015, according to Univision, which gave Applebee’s an award for its outreach strategy in April 2016.
See our Casual Restaurants report for more on this and other industry opportunities.
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Tracking the moves of consumer products makers since 2003, Catherine Colbert is an industry researcher, writer, and blogger. Previously, she spent ample time in magazine publishing, technical writing, ad copywriting, medical writing, and marketing. Follow her on Twitter.