Hispanic Consumers Show Preference for Private Brands

Many retailers throughout the country currently purchase products in bulk directly from manufacturers and distribute them using their private brands. One example is Wal-Mart’s Great Value line which offers hundreds of household consumable items including sliced bread, frozen vegetables, frozen dinners, canned foods, light bulbs, trash bags, and many other traditional grocery store products. Recent market trends indicate that Hispanic consumers are purchasing these private brand products more and more frequently in comparison to well known national labels. In fact, their lower prices and consistent quality make these products a “great value for the money”, a statement that 7 out of 10 Hispanic consumers agreed with in a recent survey.

The business of selling private brand products has grown primarily due to the benefits for both retailers and consumers. Selling these products gives retailers more freedom and flexibility in pricing, higher profit margins, and more control over quality. A new study by the Food Marketing Institute (FMI) Private Brands Group presented statistics regarding increased consumption of these by the Hispanic community. According to the report “Se Habla Isn’t Enough: Private Brands Among Hispanics 2009”, 37 percent of Hispanic shoppers are purchasing more private brand products this year and 25 percent plan to buy more in 2010. The report also found that private brands account for 31 percent of household grocery expenses among Hispanics, averaging $85.94 every two weeks out of a total of $266.63.

The most popular private brand categories for Hispanic shoppers include: dairy products, paper products, carbonated beverages or bottled water, and cleaning supplies. Nearly two thirds of all the individuals surveyed agreed that “private brands are just as good as national or international brands.” The increased consumption by Hispanic consumers and increased profits for retailers will surely contribute to an increase in demand for private brands in the years to come.

By Karina Lairet