U.S. Hispanics not full-service fans yet

You’d think the widespread popularity of Latin flavors and a steady increase in the size of the U.S. Hispanic population would somehow be translating into more business for U.S. restaurants. But new numbers from NPD’s CREST Hispanic tracking study show that’s not the case. Instead, year-over-year restaurant visits by U.S. Hispanics have declined, particularly in the full-service segment.

You can’t say we weren’t warned. Check out this note from NPD’s December 2013 Foodservice Brief titled “Looking Head to 2013 and Beyond:”

“Hispanics now account for 16 percent of the U.S. population. This group’s growth is expected to continue at a pace exceeding that of the country’s overall population. Hispanics’ restaurant use—particularly among those who are Spanish language-oriented—differs from overall restaurant use among the general population. The segments likely to share in the demand supported by this population include QSRs, morning meals, combo meal deals, and products like burgers, Mexican food, and juice.

“A number of chains and restaurant categories have a head start in marketing to this segment. Others have been slower to address U.S. Hispanics’ needs. Notably, full service restaurants tend to be very weak with this market. To reverse this tide, full service operators will need to accommodate (better yet, embrace) the cultural and language differences exhibited by this group.”

Now NPD has given us numbers that back up this statement. In 2012, a year in which total U.S. restaurant visits increased by one percent, visits by U.S. Hispanics declined by one percent—a loss of 86 million visits. NPD cites above-average unemployment among U.S. Hispanics as a factor contributing to the decline.

But QSRs control the lion’s share of this business. Fast food restaurants got 84 percent of Hispanic restaurants visits last year, NPD reports. “U.S. Hispanics’ use of full-service restaurants is historically below average, and their lagging visits to this segment were even more pronounced in 2012,” the company says.

Numbers like these seem discouraging, but they also point to a huge opportunity for full-service operators who can figure out how to attract U.S. Hispanics. The Pew Research Hispanic Center forecasts that the U.S. Hispanic population will rise to 128 million in 2050, when they will account for 29 percent of the nation’s population. Between now and then Latinos will account for 60 percent of U.S. population growth.

“U.S. Hispanics are an increasingly important customer base for the foodservice industry—they made some 9.6 billion visits in 2012 and spent $63 billion,” says NPD restaurant industry analyst Bonnie Riggs. “Understanding how, why and when U.S. Hispanics use restaurants and other foodservice outlets can help operators and supplier partners focus on efforts to entice this group to visit.”  

This market segment is becoming too big to ignore. If you want your full-service restaurant to grow—and perhaps, eventually, to survive—you’ll want to think about how you can attract and retain U.S. Hispanic customers.