Trends and Consumer Habits in the U.S. Hispanic Markets Presented by
José de Jesús Legaspi
FRANCHISES CREATE
BUY INTO A SYSTEM
A SYSTEM
BUSINESS
OPPORTUNITY
INTRODUCTION The Legaspi Company (“TLC”) is The pioneer in Hispanic retailing.
In nearly 40 years, TLC has focused its commercial real estate efforts in ownership, development, redevelopment, brokerage, landlord & tenant representation and consulting. The company’s knowledge in Hispanic demography has enabled it to effectively identify and capitalize on untapped market opportunities and develop projects in urban and Hispanic areas.
IN THE NEWS • The Legaspi Company’s Vanguardia Initiative program was honored with the 2014 U.S. Silver MAXI Award in Las Vegas by ICSC. • The Legaspi Company as No. 34 of The World’s 50 Most Innovative Companies and No. 3 of The World’s Top 10 Most Innovative Companies in Retail • Time Magazine also released a featured story “Mercado of America” in 2014, highlighting CEO José de Jesús Legaspi and his mall — La Gran Plaza • In 2015, Fast Company honored José de Jesús Legaspi as a new member of the Most Creative People in Business 1000
U.S. POPULATION │ Increasing and Evolving Population Distribution Growth by Race 1.5
6.5 11.5 79.6
12.6 3.6 12.3
18.5 5.6 12.8
75.1 70.3
1980
2000
2017
Source: Authors’ graph using U.S. Census Bureau and Claritas Pop-‐Facts Premier 2017 Estimates data
280%
Hispanic Population Growth Since 1980
Hispanic Asian Black White Alone
U.S. HISPANIC POPULATION
60+Million Hispanics Hispanic Population by State 2,000,000 to 15,471,000 900,000 to 1,999,999 500,000 to 899,999 350,000 to 499,999 220,000 to 349,999 156,000 to 219,999 40,000 to 155,999 12,000 to 39,999
– 20 states have over half a million Hispanic residents –
Source: Authors’ map using Claritas Pop-‐Facts Premier 2017 data
HISPANIC DEMOGRAPHICS & PSYCHOGRAPHICS DEMOGRAPHICS • 60+ million & over 65% are U.S. born • Median Age is 28.7 – the youngest major ethnic group in the nation • Average household size is 3.3 compared to 2.5 for non-‐Hispanics
PSYCHOGRAPHICS • Hispanics are multicultural and bilingual • Actively using social media & becoming trendsetters • Hispanics are historically family-‐oriented Source: Claritas Pop-‐Facts Premier 2017 Estimates
HISPANICS: A Growing Consumer Force
Hispanic Purchasing Power Increase in 2017
$1.7 Trillion
Billions
U.S. Purchasing Power by Race $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0
$1,802
$1,013 $959
$320 $213 $117 1990
$608 $495 $277
$604
2000
2010
Hispanic
Black
$1,392 $1,205
$1,458 $1,207
$891
2016
2021
Asian
Sources: Statista.com; Authors’ graph using Selig Center for Economic Growth, Terry College of Business, The University of Georgia, June 2016 data.
GROSS DOMESTIC PRODUCT (GDP) GDP of 10 Largest Economies in the World & U.S. Latinos in Trillion U.S. Dollars, 2015 1. U.S. 2. China 3. Japan 4. Germany 5. UK 6. France U.S. Latinos U.S. HISPANICS 7. India 8. Italy 9. Brazil 10. Canada
18.04 11.07
Latino U.S. GDP
4.38 3.36 2.86 2.42
• 7th largest in the world
2.09
• Growing 70% faster than the Country’s non-‐Latino
2.13 1.82 1.8 1.55
• 2nd largest among all U.S. states
0 5 10 15 20 Source: Latino Gross Domestic Product (GDP) Report: Quantifying the Impact of American Hispanic Economic Growth
TEN LARGEST HISPANIC CONSUMER MARKETS
U.S.A. California Texas Florida New York New Jersey Illinois Arizona Colorado New Mexico Virginia
Total Population
Hispanic Share
325,000,000 40,000,000 28,000,000 21,000,000 20,000,000 9,000,000 13,000,000 7,000,000 6,000,000 40,000,000 8,000,000
18% 39 % 39 % 25% 19% 20 % 17% 31% 22% 39% 9%
2016 Hispanic Buying Power (Billions)
$14,000 $400 $300 $140 $100 $51 $50 $42 $27 $25 $23
California
alone accounts for 26% of Hispanic purchasing power.
Sources: Selig Center for Economic Growth, Terry College of Business, The University of Georgia, June 2016; Population: Claritas Pop-‐Facts Premier 2017
TOP 10 METROPOLITAN AREAS │ by Hispanic Population 25,000,000
Total Population
$49,589
20,000,000
Hispanic Population
$46,800
$46,017
$47,467
25%
44%
37%
$51,135
Hispanic Median HH Income
$50,521
$45,939
$42,062
$46,357
$52,331
15,000,000 10,000,000 5,000,000 -‐
46%
51%
Source: Authors’ graph using Claritas Pop-‐Facts Premier 2017 / Nielsen data
22%
29%
31%
55%
34%
HISPANIC HOUSEHOLD INCOME Median Household Income
$45,858 Income of $100K+
104% Growth Since 1980
Hispanic Households by Total Income Percentage Distribution 7.0 28.4 31.4
14.3
16.6
31.0
28.9
28.8
27.8
33.1
25.7
26.6
1980
2000
2015
$100,000 & Over $50,000 to $99,999 $25,000 to $49,999 $24,999 & Under
Sources: Claritas Pop-‐Facts Premier 2017 Estimates; Authors’ graph using U.S. Census Bureau, Income and Poverty in the United State: 2015
YOUTHFUL DRIVEN CONSUMER U.S. Millennials by Ethnicity
Hispanic Millennials Nationwide
16.6 Million
Hispanic
22% Asian
6% Black
14%
Non-Hispanic White
58%
• Predominately bicultural & native born, more than any previous generation • Hispanic Millennials are the largest & fastest growing multicultural group
Source: Authors’ graphs using Claritas Pop-‐Facts Premier 2017 / Nielsen data; *Authors’ calculations using Claritas Pop-‐Facts
HISPANIC LABOR FORCE PARTICIPATION Labor Force Participation Rates, Annual Averages Population Age 16 and Older
64
69.7
65.9
63.8
67.1
62.7
1980
2000
2015
“
Hispanic Total U.S.
Hispanics accounted for 70% of the U.S. work force’s increase in the first half of this decade.
”
Sources: Authors’ graph using U.S. Bureau of Labor Statistics, Current Population Survey (CPS); Latino Gross Domestic Product (GDP) Report: Quantifying the Impact of American Hispanic Economic Growth
EDUCATIONAL ATTAINMENT: A Work in Progress Educational Attainment of the Hispanic Population 25 Years Old & Over 15.5 10.4
7.6
52.4
104%
66.7
Growth Since 1980
High School Graduation
16.2 1980
Bachelor’s Degree or More
2000
High School Graduate or More
2015 Bachelor's Degree or More
312%
Growth Since 1980
Sources: Authors’ graph using U.S. Census Bureau Statistical Abstract of the United States, Census 2000 and 2015 Current Population Survey data
Hispanic Entrepreneurship: BOOSTING THE U.S. ECONOMY
*2012 Hispanic-Owned Businesses The Legaspi Company
3.31 MILLION 2016 Hispanic-Owned Businesses Projections
4.23 MILLION 2016 Total Sales Receipts for Hispanic-Owned Business
$
$668 BILLION INCREASE 29% SINCE 2012
Sources: *U.S. Census Bureau, 2012 Survey of Business Owners; Geoscape Hispanic Businesses & Entrepreneurs Drive Growth in the New Economy, 4th Annual Report
HISPANIC-OWNED FRANCHISES
400,000
Hispanic 231%
371,078
350,000 300,000 250,000 200,000 150,000 100,000
237,906
200%
Black, 169%
150%
Asian 87%
White 56%
60,032 32,147
40,587 15,087
50,000
250%
100%
52,712 15,931
0
50% 0%
White
Black
2007 Source: Authors’ graph using U.S. Census Bureau data
Asian
2012
Growth
Hispanic
SUCCESSFUL HISPANIC ENTREPRENEURS Guillermo Perales Sun Holdings • Company owns nearly 800 stores and plans to open 100 units & acquiring 50 more • Operates Golden Corral, Burger King, Popeyes Louisiana Kitchen, Cicis, Arby’s, Krispy Kreme, GNC and T-‐ Mobile
Alex Meruelo
Meruelo Group
• Manages 35 companies in seven different industries • La Pizza Loca, Pacific Whey Café, Okami, FujiSan, GSR Grand, KWHY-‐TV, Commercial Bank of California, et al
Frank M. Sanchez
The Sanchez Family Corporation
• Owner & Operator at McDonald’s Corp. • Operates McDonald’s restaurants in Los Angeles, Victorville, Apple Valley, Oceanside, San Juan Capistrano and San Diego Sources: bizjournals.com, meruelogroup.com, and latinola.com
HISPANIC-‐OWNED FRANCHISES
FRANCHISES: Targeting Hispanic Entrepreneurs & Consumers Developing bilingual websites
Franchises Actively Attracting Hispanic
Entrepreneurs & Consumers
Supporting Hispanic-‐focused events Innovating menus Including Hispanic-‐focused in-‐store signage Connecting with Spanish-‐language media Founding Hispanic educational initiatives
Source: Franchising World: Reaching the Untapped Latino Market in Franchising
EL POLLO LOCO & LEGASPI HISTORY In 1979-‐1983, Mr. Legaspi was an independent real estate consultant for new-‐store development and store expansions. He was directly involved for the expansion of 21 locations. He was part owner of a store in El Monte, which he then sold interest as 19 Southern California restaurants of El Pollo Loco were acquired by Denny’s Inc. in 1983.
HISPANIC CONSUMER SPENDING TRENDS
Spend More
-‐Apparel -‐Groceries -‐Cell Phone Services -‐Footwear
Higher Share of Income
-‐Restaurants -‐Housing -‐Vehicle Purchases
-‐Gasoline -‐Car Insurance
Source: Selig Center for Economic Growth, Terry College of Business, The University of Georgia, June 2016
U.S. AVERAGE ANNUAL SPENDING SHARE 2014-2015 Food at Home Food Away from Home Housing Apparel & Services Men & Boys Apparel & Services Women & Girls Apparel & Services Cellular Phone Services Vehicle Purchases (net outlay) Footwear Utilities, Fuels & Public Services
8.9% 5.6% 35.2% 4.2% 1.1% 1.6% 2.5% 7.5% 0.9% 7.7% Hispanic Consumer
7.0% 5.2% 32.7% 3.3% 0.8% 1.3% 1.7% 6.7% 0.7% 7.0% Non-‐Hispanic Consumer
Source: Authors’ graph using Selig Center for Economic Growth, based on data from the Consumer Expenditure Survey, 2015 data.
HISPANIC TOP BRANDS
HISPANIC AUTO SALES TREND PURCHASE NEW OVER USED
71%
VS.
Hispanics
29%
Hispanics
34%
Of New-‐Vehicle Sales Growth
Non-‐Hispanic
LUXURY MODEL AS 1ST VEHICLE
41%
2015 HISPANIC SALES GROWTH
VS.
27% Non-‐Hispanic
TOP HISPANIC-‐OWNED DEALERS -‐Greenway Ford Inc, FL -‐Bravo Southwest LP, TX -‐Headquarter Toyota, FL -‐Michael Shaw’s Car Dealerships, CO, TX, LA -‐Gonzalez Automotive Group Inc, CA
Source: Jumpstart Automotive Group: Today’s Auto shoppers, Dealermarketing.com; Univison.com
LATINAS: Influencing Retailers M·∙A·∙C Selena makeup collection sold out on the first day of online sales (11/30/16) U.S. Cosmetic Sales 7.4%
Source: Nielsen, usnews.com
-‐1.2% Non-‐Hispanic
Hispanics
HISPANIC BUYING BEHAVIOR Shopping is a Social Experience
Nearly 8 IN10 Hispanics go Grocery Shopping with Another Person Hispanic Shoppers Eat More Meals per Day
Average Meals per Day 3.3 vs. 2.8 Hispanic
Non-‐Hispanic
Average Monthly Grocery Spending $391 $361 Older Hispanic Millennials (25-‐34)
Total Hispanic shoppers
$331 Total U.S. Shoppers
Consumer Brand Decision is Based on Loyalty & Quality
Source: The Why? Behind the Buy Shopper Survey and U.S. Hispanic Shopper Study, 5th Edition by Acosta, Inc. and Univision Communications Inc.
HISPANICS: Influential in Fresh Groceries
Hispanic Organic Purchases
Source: The Why? Behind the Buy A Profile of the U.S. Hispanic Shopper
2015
30.5%
2014
27.8%
2013
14.4%
+69% vs. +52% for Total U.S.
HISPANIC INFLUENCES ON SNACKS Snack Decision Influence
Heritage Culture Upbringing
Source: VRTC: Snacking Culture: How Hispanic Consumers Influence Snack Trends
Founded in 2008 in South Gate, California. Currently has 12 locations in California.
Founded in 2012 in Montebello, California. Now in 10 Southern California malls & two new locations in Las Vegas, NV.
THE HISPANIC MARKET I An Undeniably Opportunity The Hispanic population will reach 119 million by 2060 – 30% of the total U.S. population Hispanics are the fastest-‐growing market segment for almost all consumer goods The Hispanic population will continue to be younger & larger
The Legaspi Company
José de Jesús Legaspi President & CEO