Consumer Trends | November 2012 | By Sam Oches

Meet Your Consumer

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The quick serve industry's customer base is a melting pot of age and race.
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EHTNICITY

While ethnicity differs greatly from market to market, the experts say operators should take note of the overall trends and habits of different racial groups as the nation becomes more diverse.

The Hispanic population is the largest ethnic demographic in the U.S., having grown 43 percent between 2000 and 2010 and now making up 16.3 percent of the population. According to Census Bureau projections, Hispanics will make up 23 percent of the population by 2050.

The Food Institute reports that Hispanics spend 38.1 percent of their food expenditures—an average $2,474 per year—on food away from home.

“The difference will be that overall, as the Latino and Hispanic population increases as a percent of the U.S., how will that impact away-from-home eating?” Todd says. “The potential is there, knowing 38 percent of their income goes to away-from-home expenditures (41 percent is the average). There’s a potential to increase that share over time. If you have a bigger base and you can get a bigger share, then it should be a positive.”

 

Holman is more blunt in stating how important it is to cater to the Hispanic demographic. “If you do not have a Hispanic initiative,” she says, “you really need to get one. The growth that is being projected for the Hispanic population in the United States is phenomenal.”

But it’s equally important to get in front of other ethnic groups. African-Americans make up 12.3 percent of the U.S. population and will make up 16 percent of the population by 2050. Members of the demographic spend 35.9 percent of their annual food expenditures, or an average of $1,721 per year, on food away from home, according to The Food Institute.

Meanwhile, Asians—who make up 4 percent of the U.S. population and spend a whopping 48.4 percent of their annual food expenditures, or an average of $3,703 per year, on food away from home—are projected to make up 10 percent of the nation’s population by 2050.

Perhaps the easiest move for operators looking to reach different ethnic groups is simply opening stores closer to where these demographics live. For example, Famous Dave’s, which is primarily a suburban, large-footprint casual concept, rolled out a smaller, quick-serve prototype to fit into more urban demographics where younger and more diverse groups tend to locate.

“[The quick-serve prototype] allows us to more deeply penetrate markets with a number of smaller units and kind of pursue urban stores that have much more expensive rent and build-out costs,” Larrabee says. “The smaller unit gives us more flexibility from a real estate perspective.”

Weikel says ethnicities like African-Americans, Asians, and Hispanics or Latinos want “to be catered to a little bit” and appreciate efforts companies make to reach out specifically to them.

“With Hispanics, a lot of it’s been on language, with different cultural heritage, authenticity of the food,” she says. “And I think as the Asian group becomes larger, then we might be seeing that, as well. … I think also, just in terms of the menu items offered, our research shows that these groups have a greater demand for ethnic foods. So obviously, although that’s something that’s been on-trend for a while, I think it’s going to be even more in demand as these groups increase.”

Technomic’s data backs up Weikel’s claims. Some 90 percent of Asians, 88 percent of Hispanics and Latinos, and 72 percent of African-Americans, according to its data, order ethnic food at least once a month. Seventy-five percent of white customers do the same.

Holman echoes the sentiment that ethnic foods are a great way to reach more diverse populations, adding that the Hispanic and Latino population will be an increasingly easier target to cater to as young immigrants and children of immigrants get older and more familiar with U.S. foodservice.

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