Latino Foodservice Trends in the U.S.

Chapter 1: Executive Summary

Scope and Methodology

Scope of coverage

Methodology

Consumer survey methodology

Menu item analysis

Methodology

Market size and forecast

Hispanic restaurant spend trending

Definitions

Share of Stomach: Latino Foodservice Market Size and Forecast

Insight capsule

Latino Foodservice: Macrotrends and Drivers

Insight capsule

Fast Facts

Latinos in Context: Cuisine and Menu Trends

Insight Capsule

Fast Facts

Restaurants, Hispanics & Health

Insight Capsule

Fast Facts

Latinos in Context: Food & Restaurant Spending Trends

Insight Capsule

Fast Facts

Latinos in Context: Restaurant Industry Guest Traffic Trends

Insight Capsule

Latinos in Context: Casual Restaurant Guest Traffic Trends

Insight Capsule

Latinos in Context: Family Restaurant Guest Traffic Trends

Insight Capsule

Latinos in Context: Quick-Service Restaurant Guest Traffic Trends

Insight Capsule

Latinos in Context: Snack & Beverage Concept Guest Traffic Trends

Insight Capsule

Latinos in Context: Restaurant Brand Analysis

Insight Capsule

Chapter 2: Share of Stomach: Latino Foodservice Market Size and Forecast

Introduction

Restaurant sales to consumers

Graph 2-1: Restaurant Sales to Consumers, 2006-11

Limited-service restaurant sales to consumers fare better than full-service sales

Graph 2-2: Restaurant Sales to Consumers, by Segment, 2006-11

Hispanic share of restaurant sales ticks upward

Graph 2-3: Restaurant Sales to Consumers, Share of Sales to Hispanics, 2006-11

Balancing population growth, unemployment trends and HH income

Graph 2-4: Restaurant Sales to Hispanic and Non-Hispanic Consumers,

Percent Change, 2007-11

Hispanic momentum in full-service restaurants’ favor

Graph 2-5: Full-Service Restaurant Sales to Consumers, Share of Sales to Hispanics, 2006-11

Graph 2-6: Full-Service Restaurant Sales to Hispanic and Non-Hispanic Consumers,

Percent Change, 2007-11

Limited-service Hispanic restaurant share plateaus

Graph 2-7: Limited-Service Restaurant Sales to Consumers, Share of Sales to Hispanics, 2006-11

Graph 2-8: Limited-Service Restaurant Sales to Hispanic and Non-Hispanic Consumers,

Percent Change, 2007-11

Chapter 3: Latino Foodservice: Macrotrends and Drivers

Overview

Hispanic importance to market will only grow over time

Table 3-1: Hispanic Population, Share of Total Population, by Age, 2005-2025

Hispanic HH income and household wealth lags

Table 3-2: Income Analysis, by Race/Gender

But share of consumer spending and buying power on the upswing

Table 3-3: Average Annual Expenditures by Hispanic and Non-Hispanic Consumer Units, 2005-09

Table 3-4: Aggregate Spending by Hispanic and Non-Hispanic Consumer Units, 2005-09

And significant gains in buying power projected

Table 3-5: Projected Growth in Hispanic Buying Power, 2010-15

Key restaurant demographic drivers: youth and males

Youthful Hispanic population important to all restaurant segments

Table 3-6: Population by Selected Age Group, Hispanics vs. Other Population Groups, 2009

Population share + restaurant use and usage frequency = important

Table 3-7: Restaurant Segment Use and Usage Frequency Among Hispanics, by Age, 2011

Males the majority

Table 3-8: Population by Gender, Hispanics vs. Other Population Groups, 2009

But restaurant usage and usage frequency tilts to Hispanic females

Table 3-9: Restaurant Segment Use and Usage Frequency Among Hispanics, by Gender, 2011

Larger, family households with children

Latino households much larger than average

Table 3-10: Population by Gender, Hispanics vs. Other Population Groups, 2009

Regional variations

Language and acculturation

Table 3-11: Percent of Hispanic Population Foreign-Born, 2009

Table 3-12: Percent of Hispanic Population Foreign-Born, by Age Group, 2009

Most Latinos Are English-speakers

Table 3-13: English-Language Capabilities of Hispanics 5 Years Old and Over, 2009

Influence of English language grows

Table 3-14: English-Language Capabilities of Hispanics 5 Years Old and Over, 2000-09

Marketing correctly to multicultural consumers

Taco Bell’s talking Chihuahua

The Spanish media angle

Olive Garden: Spanish media; mainstream restaurant chain

A question of confidence

Opportunity: target Hispanics in view of restaurant usage & degree of confidence

Table 3-15: Degree of Consumer Confidence, Correlation to Restaurant Usage by Segment,

Hispanics vs. Non-Hispanics

Know your geography

Graph 3-1: Hispanic/Latino Population as Percent of Total Population by County, 2010

Highly concentrated Hispanic areas influence leading restaurants’ Hispanic share

Jack in the Box geographic analysis

Table 3-16: Jack in the Box Location & Hispanic Population Analysis

Denny’s geographic analysis

Table 3-17: Denny’s Location & Hispanic Population Analysis

But it’s not just about location; it’s also about cuisine type

Domino’s delivers to Hispanics

Table 3-18: Domino’s Location & Hispanic Population Analysis

Chapter 4: Latinos in Context: Cuisine and Menu Trends

Overview

Top ethnic cuisine and flavor trends

What’s hot?

Table 4-1: Top Ethnic Cuisine and Flavor Trends, 2011

Mexican on the menu

Top sauces and flavors on Mexican menus

Table 4-2: Top Sauces and Flavors at Mexican Restaurants,

Incidence and Penetration, 2011

Top Mexican sauces and flavors used across restaurant industry

Table 4-2: Top Mexican Sauces and Flavors, All Restaurant Menus, Incidence and Penetration, 2011

Top Mexican entrees vary by segment

Table 4-3: Top Mexican Entrees, Restaurant Penetration, by Segment, 2011

Regional variation

Table 4-4: Top Mexican Entrees, Restaurant Penetration, by Region, 2011

Top Mexican appetizers

Table 4-5: Top Mexican Appetizers, Restaurant Penetration, by Segment, 2011

More than just Mexican

Shared in common

Mexican menu presence dwarfs those of other Latin American regions

Table 4-6: Latino/Hispanic Cuisine: Restaurant Industry

Menu Incidence & Brand Penetration, by Segment, 2011

Non-Hispanic cuisine chains

Pizza chain mixes traditional pizza offerings with Latino-influenced fare

Table 4-7: Domino’s Pizza: Latin-Influenced Menu Item Introductions, 2010-11

Breakfast mainstay spices up menu

Table 4-8: Denny’s: Latin-Influenced Menu Item Introductions, 2010-11

Casual Bar & Grill player innovates with Hispanic-influenced fare

Table 4-9: Chili’s: Latin-Influenced Menu Item Introductions, 2010-11

Burgers with flair

Table 4-10: Sonic: Latin-Influenced Menu Item Introductions, 2010-11

Studying high concentration areas

Diversity on the menu

Studying street food

Chapter 5: Restaurants, Hispanics & Health

Making health a priority

The argument in dollars and cents

Obesity rates among Hispanics trending higher

Graph 5-1: Age-Adjusted Prevalence of Overweight, Obesity and Extreme Obesity among U.S. Adults, Age 20-74 Years

Rates among Hispanic children on the rise

Graph 5-2: Obesity Rates, Ages 2-19, All versus Hispanic, 1988-2008

Lower incomes = higher obesity rates

Rates among men and women by race and ethnicity differ

Graph 5-3: Obese Adults Age 20 and Over, by Poverty Income Ratio and Race/Ethnicity, Percentage of Male and Female Obese Adults: 2005-08

Hispanic culture and practices significantly influence obesity perceptions

Burst and bust short-time financial cycle leads to food sharing

Feeding children a symbol of nurturing and achievement

Obesity not perceived as negative

Study ramifications for restaurant industry

Hispanic poverty is widespread

Hispanic diet, health & food attitudes: a myth exposed & health contradiction?

Healthful eating conundrum

Positive breakfast trend; negative ingredient knowledge trend

Table 5-1: Hispanic Diet, Health & Food Attitudes: Percentage Use, Index to Non-Hispanics, 2006-11

Healthy fast food? Not so fast!

Generational differences compounded by usage-frequency differences

Table 5-2: Healthy Fast Food Endorsement: Percentage Use, Hispanic Generation Index to General Population, 2011

But HH income tells a different story

Table 5-3: Healthy Fast Food Endorsement: Percentage Use, Hispanic HH Income & Gen Y Gender Index to General Population, 2011

Nutrition

Table 5-4: Food Nutrition Importance: Percentage Use, Hispanic Generation & Gen Y Gender Index to General Population, 2011

The importance of the kitchen is relative

The kitchen is much more important to some than to others

Debunking a myth: importance of kitchen does not deter Hispanic restaurant use?

Table 5-5: Kitchen Importance: Percentage Use, Hispanic Generation & Gen Y Gender Index to General Population, 2011

Chapter 6: Latinos in Context: Food & Restaurant Spending Trends

Overview

Hispanic HH income and household wealth lags

Table 6-1: Income Analysis, by Race/Gender

But share of consumer spending and buying power on the upswing

Table 6-2: Average Annual Expenditures by Hispanic and Non-Hispanic Consumer Units, 2005-09

Table 6-3: Aggregate Spending by Hispanic and Non-Hispanic Consumer Units, 2005-09

Table 6-4: Income Analysis, by Race/Gender

Hispanic household spending trends

Hispanic food spending trends

Graph 6-1: Hispanic Household Food Spending, 2005-09

Gap between narrows between food-away-from-home and food-at-home spending

Graph 6-2: Hispanic Household Food Spending,

Share of Total Spend, 2005-09 2005-09

Hispanic restaurant spending trends

Graph 6-3: Hispanic Household Food-Away-From-Home Spending, by Segment, 2005-09

Full-service restaurant share gains suggest that significant shift is underway

Graph 6-4: Hispanic Household Food-Away-From-Home Spending,

Share of Total Spend, 2005-09

Hispanic daypart spending trends

Graph 6-5: Hispanic Household Restaurant Spend Share, by Daypart, 2005-09

Per household versus per person restaurant spending

Graph 6-6: Hispanic Restaurant Spend: Per Household & Per Person, 2005-09

Breakfast spending increases defy recession

Graph 6-7: Hispanic Breakfast Daypart Spend: Per Household & Per Person, 2005-09

Lunch

Graph 6-8: Hispanic Lunch Daypart Spend: Per Household & Per Person, 2005-09

Dinner

Graph 6-9: Hispanic Breakfast Daypart Spend: Per Household & Per Person, 2005-09

Snack

Graph 6-10: Hispanic Snack Daypart Spend: Per Household & Per Person, 2005-09

Chapter 7: Latinos in Context: Restaurant Industry Guest Traffic Trends

Overview

A growth driver

Population growth saves industry

Table 7-1: Restaurant Usage by Segment: All Consumers, 2007-11

Hispanic growth is the key

Table 7-2: Restaurant Usage Among Latino/Hispanics, by Segment, 2007-11

Hispanic usage share increases in all major restaurant segments

Table 7-3: Latino/Hispanic Restaurant Usage Share, by Segment, 2007-11

Standouts: Family breakfast restaurants

Standouts: Pizza establishments

Table 7-4: Indexed Restaurant Usage by Segment & Sub-Segment: Hispanic/Latinos & Non-Hispanic/Latinos, 2011

Usage, by demographic

Gender trends

Table 7-5: Restaurant Usage by Segment, All Consumers vs. Hispanic/Latinos, by Gender, 2011

Generation gap

Table 7-6: Restaurant Usage by Segment, All Consumers vs. Hispanic/Latinos, by Generation, 2011

Income plays significant role

Table 7-7: Restaurant Usage by Segment, All Consumers vs. Hispanic/Latinos, by HH Income, 2011

Full-service restaurant usage trends, by segment

Table 7-8: Full-Service Restaurant Usage by Segment: All Consumers, 2007-11

Hispanic share

Table 7-9: Full-Service Restaurant Usage Among Latino/Hispanics, by Segment, 2007-11

Table 7-10: Latino/Hispanic Full-Service Restaurant Usage Share, by Segment, 2007-11

Full-service usage frequency

Table 7-11: Full-Service Restaurant Visit Frequency in Past Month: Hispanic/Latino Consumers vs. Non-Hispanic/Latino Consumers

Table 7-12: Full-Service Restaurant Usage, by Daypart: Hispanic/Latino Consumers vs. Non-Hispanic/Latino Consumers

Spanish-speaking Hispanics skew to snacking and breakfast dayparts

Limited-service restaurant usage, by segment

Table 7-13: Limited-Service Restaurant Usage by Segment: All Consumers, 2007-11

Table 7-14: Limited-Service Restaurant Usage Among Latino/Hispanics, by Segment, 2007-11

Table 7-15: Latino/Hispanic Limited-Service Restaurant Usage Share, by Segment, 2007-11

Limited-service restaurant usage frequency

Table 7-16: Limited-Service Restaurant Usage Frequency: Hispanic/Latino Consumers vs. Non-Hispanic/Latino Consumers

Table 7-17: Limited-Service Restaurant Usage, by Daypart: Hispanic/Latino Consumers vs. Non-Hispanic/Latino Consumers

Chapter 8: Latinos in Context: Casual Restaurant Guest Traffic Trends

Overview

Hispanic share of Casual Bar & Grill and Italian higher than Casual Steak

Table 8-1: Casual Restaurant Usage Metrics, by Casual Sub-Segment: All Consumers vs. Hispanic/Latino Consumers

Hispanic usage lags, and demographic trends mirror general population

Table 8-2: Casual Restaurant Usage, All Consumers vs. Hispanic/Latinos, by Gender, Generation & HH Income, 2011

Casual Bar & Grill brand analysis

Table 8-3: Casual Bar & Grill Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Olive Garden advertising paying off?

Table 8-4: Casual Italian Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Steak’s on!

Table 8-5: Casual Steak Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Chapter 9: Latinos in Context: Family Restaurant Guest Traffic Trends

Overview: Food health attributes that determine choice of a “quick bite”

Family restaurants a Hispanic favorite

Table 9-1: Family Restaurant Usage Metrics, by Segment: All Consumers vs. Hispanic/Latino Consumers

Demographic snapshot

Table 9-2: Full-Service & Limited-Service Family Restaurant Usage, All Consumers vs. Hispanic/Latinos, by Gender, Generation & HH Income, 2011

Limited-service family restaurant brand analysis

Table 9-3: Limited-Service Family Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Family breakfast restaurant brand analysis

Table 9-4: Family Breakfast Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Family all-day restaurant brand analysis

Table 9-5: Family All-Day Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Chapter 10: Latinos in Context: QuickService Restaurant Guest Traffic Trends

Overview

Enormous quick-service restaurant usage footprint

Table 10-1: Quick-Service Restaurant Usage Frequency:

All Consumers vs. Hispanic/Latino Consumers

Quick-service restaurant usage, by segment

Table 10-2: Quick-Service Restaurant Usage Metrics, by Segment: All Consumers vs. Hispanic/Latino Consumers

Hispanic Burger usage in line with average

170 million users; 13.2% Hispanic share

Table 10-3: QSR Burger Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Pizza, pizza!

A Hispanic draw

Table 10-4: QSR Pizza Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Mexican QSRs outperform

Taco Bell the exception

Table 10-5: QSR Mexican Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Chapter 11: Latinos in Context: Snack & Beverage Concept Guest Traffic Trends

Overview

Snack and beverage: a demographic overview

Table 11-1: Snack & Beverage Restaurant Usage, All Consumers vs. Hispanic/Latinos, by Gender, Generation & HH Income, 2011

Hispanic share lags that of QSR

Jamba Juice: usage leader

Table 11-2: Snack and Beverage Restaurant Usage Metrics, by Restaurant Brand: All Consumers vs. Hispanic/Latino Consumers

Chapter 12: Latinos in Context: Restaurant Brand Analysis

Top 25 restaurant brands: tale of the tape

Five-year Hispanic growth triple that of population as a whole

Hispanic share gains

Thanks to largest overall usage footprint, McDonald’s draws most Hispanics

But eight other brands register explosive usage growth

McDonald’s versus burger rivals

Burger saturation—or are burgers just not hitting the mark?

High Hispanic share

Low Hispanic share

Share gainers

Table 12-1: Top 25 Restaurant Brands: System-wide Sales & Hispanic Share of Guest Traffic, 2007-11

Top 25 quick take: Hispanic vs. all consumers restaurant brand usage

Graph 12-1: Top 25 Restaurant Brands by Sales, Hispanic/Latino versus General Population Use, 2011

Top 25 quick take: Hispanic vs. all consumers restaurant brand usage likelihood

Graph 12-2: Top 25 Restaurant Brands by Sales, Hispanic/Latino Indexed Use, 2011

Throwing a wider net: large and mid-size chains

Table 12-2: Restaurant Brands with High Hispanic Usage Share:

Indexed Use, Revenue and Units, 2011

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