CHICAGO — Appealing to Hispanic shoppers will become a larger emphasis for consumer packaged goods manufacturers as the demographic continues to grow. In a pair of reports from Circana, the market researcher identified the consumer group as a key area of opportunity, as the population is set to grow 50% from 65 million to 98 million over the next several decades.

The findings revealed that CPG spending is growing faster among Hispanic consumers, with food and beverage dollar sales increasing 3.5% versus one year ago among Hispanic shoppers compared to a 2.6% change for non-Hispanic shoppers. Similarly, food and beverage unit sales among Hispanic shoppers increased 1.7% versus a year ago while decreasing 0.3% for non-Hispanics.

“Hispanic households are crucial drivers of CPG growth, accounting for 14% of US households while delivering 16% of total growth,” said Sally Lyons Wyatt, global executive vice president and chief adviser for Circana. “Brands and retailers that align their offerings with Hispanic consumers’ values and preferences … will unlock new growth opportunities in the years ahead.”

When looking at the Hispanic consumer population, Circana found that household dollar spend share skews toward younger groups, with the 46- to 55-year-old shoppers accounting for the most dollar spend share. Hispanic shoppers are more likely to prefer in-person shopping and club channels versus their non-Hispanic counterparts, Circana said.

Hispanic consumers are overrepresented in total retail food and beverage dollar share in segments like ethnic foods, juice, bottled water, refrigerated beverages, frozen meat and refrigerated meat, indicating areas where product innovations may especially resonate. Meanwhile, the demographic is underrepresented in categories such as frozen fruits and vegetables, snacks, candy, condiments and frozen meals. The coffee and liquor categories have become two of the fastest growing areas within the Hispanic food and beverage dollar spend, especially when compared to their growth in non-Hispanic demographics.

An examination of Hispanic household dollar penetration showed shoppers are focused on purchasing products that support their cultural preferences, such as natural, plant-based and sustainable items. Dollar penetration was highest for categories such as tortillas/eggrolls/wonton wraps at 29%, powdered milk at 28% and Mexican foods at 24%. Other categories of note include aseptic juices, dry beans and vegetables, fresh eggs, rice and refrigerated baked foods.

Salsa, mango, sushi and melon account for some of the top product flavors within Hispanic households, according to Circana, and Hispanic-inspired flavors have seen significant growth in mainstream appeal with a variety of food and beverage categories. For instance, street corn-flavored products have seen a 33% increase in three-year compound annual growth rate (CAGR) driven by the refrigerated dip, entrees and salty snack categories, and churro-flavored products have seen a 24% uptick in three-year CAGR due to applications in the ice cream, salty snack and snack bar categories.

“The Hispanic consumer continues to outpace the overall market in key categories,” said Marshal Cohen, chief retail adviser at Circana. “Understanding the opportunity in front of retailers and manufacturers is critical for retail growth, and it will become even more important as the Hispanic population grows. Marketers continue to invest in reaching a variety of demographics, and the Hispanic opportunity needs to be part of that focus.”

To appeal to the growing demographic, retailers and manufacturers likely will need to devote resources to developing Hispanic-focused concepts and brands. Circana pointed toKroger’s Mercado private label brandas an example of such focused development. The Hispanic-inspired brand includes more than 50 items across categories like fresh meat, beverages, snacks, sides and desserts, along with a range of core Hispanic ingredients to help consumers create a variety of authentic Latin American meals.