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Latino Purchasing Power

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By Keith Loria September 2014 Marketing & Promotions

Recent studies show that Latino buying power hit just more than $1.3 trillion in the past year, which has made many in the full-service restaurant industry take notice and take action. At the same time, Latinos are already influencing dining habits of Americans.

According to the NPD Group, in 2013 Hispanic consumers accounted for 18 percent of traffic and 19 percent of dollars at quick serves, compared with only 12 percent of both traffic and percent of dollars at full-service counterparts. Warren Solochek, the NPD Group’s vice president of client services, says the lower numbers are partly because fewer full-service brands are directly targeting this segment with culturally relevant marketing campaigns.

“In general, Hispanics are much more inclined to go to quick-service restaurants, as full-service restaurants are way underdeveloped in meeting their needs,” Solochek says. “What we have seen in recent years is that their visits to the full-serve category are declining not growing.”

Industry experts agree that the most important way to reverse the trend is to minimize language issues. NPD data show that Hispanics rank full-service restaurants lower than non-Hispanics as it relates to service, which has a lot to do with language. The statistics also show that Spanish-oriented Hispanics rank accuracy lower at full-service restaurants for the same reason.

There are efforts to change this. Over the summer, Denny’s debuted a Latino Facebook page, an effort to reach the 20 percent of consumers who are Latino and make that demographic aware of the cultural transitions underway at the 24-hour chain. One post highlighted a Latino rapper busting rhymes about the signature Grand Slam breakfast.

“Not every Hispanic customer is fully fluent with English, and certainly, when you go to a restaurant and given the kind of questions people ask about food, there can be some difficulties in translation,” Solochek says. He suggests that restaurants include someone on the wait staff who speaks Spanish, particularly if the restaurant is in a heavily populated Latino city, or include more photos on the menu to depict dishes.

Another tip for attracting the Latino customers is to present opportunities for purchasing more sharable foods. Chef Sergio Remolina, director of Latin studies at the Culinary Institute of America, says Hispanics who visit full-service restaurants normally go in larger groups, with their entire families, and they like to share.

“Typically, these visits include younger kids and the extended family, and it’s easier to make that a more affordable occasion by having foods that are more sharable, as opposed to a single portion per person,” he says. “For someone going out with a large family, it can be an expensive way to eat, so they’re not going to do it very often. If they can buy and share together, it makes it easier to afford.”

Last year, Red Lobster launched a successful Spanish-language marketing campaign that included an adaptation of its “Real People” campaign. The brand tweaked the “See Food Differently” tagline to be more language-appropriate: “Disfruta un Mar de Sabores.”

“I think if you look at those who have been successful marketing and advertising to Hispanics, language works—but not everyone can afford to buy Spanish ads,” Solochek says. “The other thing that helps get the message across is to show in the advertising larger groups. It conveys the family-friendly message and is a little more inviting to people.”

Latino Habits Influence American Dining

On the flip side, as full-service concepts work to achieve more Latino visits, Latinos are already influencing dining habits in the U.S. For Latin- and South American-inspired food, the full-service segment is seeing more entrants, including Cuban, Venezuelan, and Latin American restaurants.

As Chef Remolina indicates, Latino culture, with its emphasis on family-style eating, fits into current dining trends such as sharable plates, as well as the use of fresh and local ingredients.

Stephen Hartzell, chef de cuisine of Toro Toro, a pan-Latin steakhouse in Washington, D.C., says diners are better educated in food and chef-driven offerings, and along with this education, they are more interested in eating variety.

“We’re responding to this trend by offering a dining experience rather than a typical shared appetizer and entrée,” he says. “About two-thirds of our menu consists of shared small plates. It’s a popular hit with diners who may not want to have the typical steakhouse experience.”

Among the restaurant’s most popular Latin options are Choclo Empanadas, Salmon Causa, and Smoked Guacamole.

Guillermo Pernot, concept chef and partner with Cuba Libre, which has locations in four major East Coast cities, says when its Washington, D.C., restaurant opened in 2010, it introduced a menu different than its other three.

“The tapas-style dining was part of the menu from the beginning,” he says. “The small plate concept and lower price point allow them to feel comfortable to experiment.”

After observing the habits of the D.C. diners, Chef Pernot introduced the tapas menu to the other Cuba Libre restaurants; now, nearly half of the dinner menu at the concept is tapas. “We have found that since we shifted from a traditional entrée-style dining in our brunch program to a tapas-style menu, our traffic and sales have increased,” Chef Pernot says.