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Muy Caliente – Hispanic is booming in the U.S.
The explosion of growth experienced by the Hispanic food segment has never been equaled by any other demographic group.
September 25, 2005
America's love for unique and different foods—all types of foods—is legendary around the world. Trendlines notwithstanding, the melting pot of America refers not only to her political and sociological welcome mat, but to that uniquely American element found less frequently in other cultures—America's ability to embrace foods from beyond the borders of the country, experiment with alternative flavors to arrive at something uniquely different, and—let's face it—make it, and brand it uniquely American.
But at what price is this done, and what happens to the integrity of the native dishes?
The explosion of growth experienced by the Hispanic food segment has never been equaled by any other demographic group. Probably not since the Irish potato famine pushed immigrants by the thousands to the shores of America has any one food impacted what is consumed within our borders. Considering even the go-go '70's when Pizza actually showed up as one of "America's Favorite Foods," it's taken years for any foodstuffs to push Hamburgers off the pedestal, and critics and supporters alike will admit that Pizza's explosion onto the food scene was driven not only by the product offerings, but also by lifestyle elements including delivery, take-out, and designer product offerings. Chicago natives will clamor for their thick crust (Bet you can't eat but one piece!!) pizza, but Southern California Pizza heads will declare allegiance to CPK and Chef Wolfgang Puck's creations as the evolving winner in the "Best Pizza" category. While a true pizza aficionado would probably not see barbecued duck as a legitimate pizza topping, it seems to more than meet the needs of others in the demographic.
Not so, it would seem, with the Hispanic segment.
PR Newswire's recent news release highlighted the growth that the Hispanic segment of the population represents; "With the Hispanic population increasing by more than 50 percent since 1990 and the U.S. Census Bureau projecting the group to comprise approximately 24 percent of the country by 2050, Hispanics have become the fastest growing demographic in the U.S."
Hispanic Business.com recently published a press release on its website stating that "...from 1999 through 2004, sales of mainstream Mexican and authentic Hispanic convenience foods -- such as entrees and hand-held items -- have grown 103%, according to "The U.S. Market for Hispanic Foods and Beverages," a new market research report from publisher Packaged Facts. Sales grew from just under $250 million in 1999 to $505 million in 2004."
There's little doubt that immigrants and visitors from countries south of, and including Mexico, have impacted significantly on the growth of Hispanic tastes within the USA, but Hispanic taste needs are expanding worldwide. Perhaps it's the background spice level of these Hispanic products Americans find innately pleasing, or the liberal use of Green or Jalapeno peppers--on the milder side--to the use of some derivative of pepper sauce using Habanera or Savina Peppers on the much more spicy side—but most restaurants now offer at least a few items Hispanic in origin, if not in execution.
The blending and homogenization of food offerings has also driven American tastes to more spicy alternatives. While a native Mexican might not recognize the mixture of food products currently available at Taco Bell as native, there are alternatives popping up all across the USA with which they would feel very comfortable.
One of Fast Casual segment's most exciting entries in recent years has been Baja Fresh Mexican Grill, which has taken blends of flavors and pushed the "fresh" concept to new heights. One can make an argument, however, that Taco Bell—one of the original San Bernardino natives--developed the initial winning Mexican-based QSR concept as Taco Tia. Glen Bell's conceptual growth with the Taco Tia locations eventually grew into El Tacos, and ultimately to the first Taco Bell in Downey, CA...and his working relationship with Ed Hackbarth eventually offered background to Hackbarth's own development of Del Taco.
What started as the first Taco Bell for Glen Bell in Downey, CA, has now grown to over 6500 locations nationwide and around the world. You can't argue with that level of success.
Also in the mid 1960's, a chain of Midwestern-developed Mexican restaurants began the process of growth and development out of Wichita, KS. Taco Tico positioned itself as a low cost leader in the Midwest, and, seemingly, educated an entire younger generation of Midwesterners as to what a Taco was. The concept has evolved over time into a regional chain with a variety of Franchisees. Taco Tico was one of the first to recognize regional taste variations by offering a variety of types of hot sauces for their foods.
And yet, the growth of Hispanic eateries has grown both by tastes and opportunities—and even, one must argue, by food-costing opportunities. Across an ethnic menu base, Mexican food traditionally presents one of the premier food costing opportunities. Foods can be prepared and served quickly, and the mix of hot and cold offerings developed with spicy sauces can generally please even the most discriminating palate at a food cost which can be accommodated easily.
In the 1970's, the chain of La Fiesta and La Victoria-associated Mexican Buffet restaurants introduced a new generation of potential Hispanic food lovers to all- you-can-eat Luncheon and Dinner in not only the Southeast, but in the Mid-Atlantic part of the USA. Today, Pancho's Buffet group in the Southwest has demonstrated profitability for operators with huge portion opportunities for consumers.
A variety of Mexican concepts developed to offer larger families larger portions at smaller-or more reasonable prices—have grown and prospered. Chi-Chi's Restaurants, in spite of cashflow issues and seemingly endless legal and operational issues, were embraced throughout the USA and into Canada. Acapulco, the chain, has maintained restaurants throughout California and into the Pacific Northwest. Garcia's started out in the Phoenix market and spread as far north as Anchorage—and is still serving that great food, having started almost 50 years ago. Chevy's Fresh Mex has spread from California to New York to Florida to Seattle, bringing those wonderful Tamales and Chile Rellenos with them. Brinker International's On the Border Restaurants can now be enjoyed across a majority of states, and Don Pablo's, based in Atlant, is spreading across the Eastern part of the USA.
A variety of QSR, Fast Casual, and Family Dining opportunities have evolved in the Hispanic/Mexican segment of the industry. But what about other Hispanic foods, representing other countries and areas of opportunity?
Ethnic groups in larger cities with higher percentage immigrant populations have always developed favorite restaurants where "home-style" food can be purchased. Throughout California, almost everyone can tell you where they believe the best burrito or best tamale can be found. Tamale factories, driven by opportunities for ordering online, can now offer their products shipped FedEx anywhere, overnight.
Ceviche—marinated fish and seafood-- has developed its own followers from country to country. Each country in Central or South America seems to offer its own version of requisite citrus juices and side dishes served with the main seafood offering. Many Hispanic restaurants offer varieties of Ceviche heavy with garlic, onion, or a variety of peppers. The foodstuff has now given rise to a group of restaurants, although still fledgling in the USA, known as cevicherias—which specialize in serving a variety of Ceviche.
Newest trends from South America emerging across America include the churrascaria from Brazil—an opportunity to demonstrate to your fellow diners that you know the difference between Red and Green, and what each color means in terms of food delivery. Offering a variety of side dishes, buffet style, as well as a variety of meats, slow cooked, the trademark of the churrascaria—which, by the way, has been around in South America at least as long as the American Tavern has been around here—is a non-stop offering of meats until such time as you cry, "Enough!"
Will the churrascaria craze envelop the USA? One must assume that the migration of this group concept now occurring into Texas and Florida may, in fact, continue northward, offering yet another food opportunity for purveyors of unique foodstuffs.
Salvadorian Papusos or Papusas, depending on your knowledge of the true product, are stuffed tortillas or rolled dough (again, depending on thickness and knowledge of the product) which offer a variety of meat and cheese ingredients. They are tasty, easy to hold, not greasy, and seem opportunistic for development. Spice levels can range from mild to spicy.
As Business Week's Eric Wahlgren reports in the June 5 edition of Business Week Online.com:
"The country's major food players seem to be banking heavily on Mexican food. Many of the fast-food biggies have bought stakes in Mexican or Tex-Mex chains. In the past few years, McDonald's invested in Denver-based burrito-joint chain Chipotle, while rival Wendy's acquired Baja Fresh, based in Thousand Oaks, Calif. Carl's Jr.'s CKE Restaurants got into Carpinteria (Calif.)-based La Salsa, and Jack in the Box, one of the last to get in, bought Wheat Ridge (Colo.)-based Qdoba in 2004."
The Hispanic market is, truly, caliente.
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