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Why the wine industry should care about the rising economic power of US Hispanics
One of the more rewarding elements of working in market research is the opportunity to examine, test and – where appropriate – use the resulting data to debunk industry myths, received wisdom, and hearsay.
So it is with our recent work on Hispanics in the USA. Much has been said, written (and perhaps Tweeted) about the potential of this segment of late. The main reason for the interest is the seismic demographic shift, which will see Hispanics rise from around 14% of America’s population today to 29% in 2050 (Source: Pew Research Center).
The current economic truth is that Hispanics in the US tend to be younger and less affluent than the average. In addition, most of them don’t come from traditional wine consuming countries, and have not registered strongly on wine trade strategy radars as a result.
However, having recently researched a comprehensive report about US Hispanics, we are in the fortunate position of being able to challenge a couple of the commonly accepted myths about this group.
Myth #1: Hispanics don’t drink wine
Wrong. Hispanic Americans do drink wine – though perhaps not as often as the wine industry would like. Comparing them to the non-Hispanic US population: nearly 4 out of 10 Hispanic adults drink wine at least once a month; a figure very similar to the % among non-Hispanic US residents. Hispanics number 11 million regular wine consumers (out of a total US monthly wine consumer base of about 90 million) and they represent a good opportunity for growth in the market.
Myth #2: Hispanics favour Spanish wines and red wines
True – at least for some. Here we have to differentiate between first generation Hispanic consumers (those who live in the USA but were born in a different country) and those who were born in the US of Hispanic parents. First generation Hispanics do tend to favour red wine (they are also much more likely to drink Tequila). First generation Hispanics also favour the wines from Spanish speaking countries such as Spain, but also Argentina or Chile. Their children, however, are a different story: Hispanics of second generation or later (those who were actually born in the US) more and more resemble the USA average.
For more information, see the report Hispanic Wine Drinkers in the US Market