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    A New Face for Quick Service

  • The rapidly growing Hispanic population is causing a major shakeup in the limited-service business.

    Pizza Patron / Brandon Parscale
    Pizza Patron founder and CEO Antonio Swad has leveraged the growth of the Hispanic demographic to build his Texas-based brand.

    In today’s ultra-competitive market—a market where hundreds of millions of Americans hold an estimated buying power of more than $12 trillion—companies can’t afford to miss out on any slice of the consumer pie.

    Especially not a slice that represents the fastest-growing demographic in the entire country.

    As the largest ethnic minority in the U.S., the Hispanic population grew 43 percent in the decade between 2000 and 2010 and now makes up 17 percent of the population, according to The NPD Group, a market research firm. By 2050, the Census Bureau predicts, the group will account for 23 percent of the U.S. population.

    Not only are Hispanics changing the demographic makeup of the country, but they are also making a remarkable impact on all aspects of the quick-service business, from marketing and branding to product development, hiring, and more.

    “The Hispanic demographic is young, largely family oriented, densely grouped, and extremely fast growing, so it makes sense to focus on them,” says Antonio Swad, founder and CEO of Dallas-based Pizza Patrón, which caters to the Hispanic demographic.

    A Hispanic haven

    It’s not just the Hispanic presence in the U.S. that is exploding—their buying power is mounting, too. According to an August 2011 report from global business intelligence firm IBISWorld, Hispanics’ buying power is “escalating steeply,” estimated to reach $1.6 trillion by 2016. This 48.1 percent growth compares with the overall U.S. population’s predicted 27.5 percent growth, to $14.7 trillion total.

    Hispanics are also a young demographic, with more than 23 percent of the population under 18 years of age, says Liz Geraghty, vice president of brand marketing for Wendy’s. “As a restaurant brand, you really have to engage and connect with this consumer to succeed and to stay relevant,” she says.

    Quick serves in particular are smart to target this demographic, as Hispanics have proved to be above-average limited-service users. According to NPD, more than 84 percent of Hispanics’ restaurant visits are at quick serves, and the average Hispanic consumer visits a limited-service restaurant 155 times each year, compared with the general population’s 151 visits.

    “Four or five visits more per person per year is quite a bit of volume,” says Bonnie Riggs, restaurant industry analyst at NPD. The demographic also tends to use quick serves more for the breakfast daypart and snacking opportunities, and they’re above-average combo-meal purchasers, she says.

    Because Hispanics were one of the hardest-hit demographics during the recession, they’re flocking to quick serves for value and an easy way to feed the entire family, says Julia Gallo-Torres, foodservice category manager at market research firm Mintel. “Hispanics really don’t like to go eat out by themselves. They prefer to take their family members,” she adds. “They like it when all of them can go, and because of budgets, they really turn to fast food because that’s the place where they can get the most for their money.”

    They’re also above-average users of hamburger, chicken, and Asian concepts, Riggs says. “It’s the cheaper meals. You can feed a family easier that way,” she says. “I think the way to attract them is to understand that family meal deals will be important to them.”

    The heat factor

    Family-sized meal options aren’t the only thing Hispanics would like to see on limited-service menus. Because spicy and flavorful foods are a staple of many Hispanic cuisines, Gallo-Torres says, brands would be wise to create more flavorful menu options to draw in these guests.

    “And that means more than just throwing hot sauce on a sandwich,” she says. “What it means is trying to use ingredients that are familiar to them.” Further, she says, brands must develop items that have specific appeal to Hispanics, rather than to a mass audience.

    At Pizza Patrón, specialty pizzas are created for the Hispanic consumer on a regular basis, driven either by a Mexican flavor profile or a cultural behavior, says Andrew Gamm, the company’s brand director. A recent product, La Choriquezo, was inspired by a well-known Mexican dish of the same name that combines chorizo and cheese and is served with tortillas. Earlier this year, Pizza Patrón also introduced a proprietary pepperoni developed in partnership with Tyson. The product, which features spicy jalapeño chunks and is unique to the brand, capitalizes on the Mexican affinity for foods with heat.

    “It doesn’t necessarily relate to any dish, other than being spicy, but we’re branding this in a way that gets the attention of our core customer,” Gamm says. Called La Chingona—which translates roughly to “Badass Pizza”—the product appeals to Hispanic males, saying, “This pizza is so hot and spicy, we dare you to try it,” Gamm says. “We’re using the colloquial Mexican terminology that they use every day to let them know, ‘Hey, we get you. We understand you, and this brand is a place you can feel at home.’”

    As far back as 20 years ago, Wendy’s was tapping into Hispanics’ affinity for spicy foods with its Spicy Chicken Sandwich, Geraghty says.

    “That was a really bold move, and even today, our Spicy Chicken over-indexes with that target consumer, as do products that deliver a bolder and a higher level of taste and spice,” she says. This demographic also has a craving for fresh produce and high-quality, natural foods, Geraghty says, “so a lot of that is beginning to influence our thinking, as well.”

    While brands are speaking directly to Hispanics through specially crafted menu items, they’re also finding that many of the Hispanic-centric products they create appeal to the general population, too. In the South in particular, Gamm says, Latin and Mexican flavor profiles are becoming more mainstream and in demand. “People are looking for more flavor,” he says. “From burger chains to chicken concepts to pizza brands, they’re developing products that target these flavors.”

    Authenticity is also something that Hispanics, as well as the wider population, are starting to insist on when it comes to ethnic and regional cuisines. “The Hispanic community prefers authentic-made products because they have flavor and heat levels that you just don’t get from manufactured products,” says Jeff Sinelli, creator of Texas-based Burguesa Burger, a Mexican-themed burger brand, as well as sandwich chain Which Wich. “They’re also more natural and not filled with [unnecessary] ingredients. It’s fresh; it’s hand-made; it’s made with craftsmanship.”