Exploring the Growing Influence of the Hispanic Market in the U.S. [REPORT]

By Mario X. Carrasco

The U.S. Hispanic market has evolved into one of the most significant and dynamic consumer segments for American businesses. With over 63.5 million Hispanics comprising 19.1% of the U.S. population, the demographic is both large and influential. Beyond sheer numbers, the unique cultural values, preferences, and trends within this group offer businesses immense growth potential. ThinkNow’s “Hispanic Market Today” report explores how the Hispanic community is reshaping the demographic landscape and creating new opportunities for companies across industries.

A Young and Growing Population

One of the defining characteristics of the Hispanic population is its youth. The median age of Hispanics in the U.S. is 30, considerably younger than the 44.5 median age of the non-Hispanic white population. This makes them one of the youngest ethnic groups in the U.S. and positions them as a critical audience for brands targeting long-term consumer loyalty.

In addition to its youthfulness, the Hispanic population is growing at an extraordinary rate. Approximately one million Hispanics are added to the population annually, driven by both immigration and higher-than-average birth rates. In contrast, the non-Hispanic white population is shrinking by around 500,000 individuals each year. As the white population declines, businesses must pivot toward multicultural audiences like the Hispanic market, which represents nearly one-fifth of the U.S. population and is growing.

Rising Economic Influence

The substantial size of the Hispanic population in the U.S. correlates with its growing economic influence. In 2024, Hispanic buying power is expected to reach $2.3 trillion, up from $1.95 trillion in 2020. By 2026, this figure is projected to grow to $2.76 trillion, accounting for 12.1% of total U.S. buying power. Hispanic spending growth is outpacing the U.S. market, with an annual growth rate of 8.6% compared to the national average of 5.5%.

This increasing economic clout presents a wealth of opportunities for businesses looking to tap into a consumer base that is larger than the entire Canadian economy. Hispanic consumers are highly optimistic about their financial future, with nearly half expecting their financial situation to improve in the coming year. This optimism translates into greater consumer confidence, driving demand across various sectors, including housing, education, technology, and entertainment.

Cultural Values Influence Identity

To successfully engage Hispanic consumers, businesses must understand the cultural drivers influencing their behavior. Family, community, and education are deeply rooted values that guide decision-making for many Hispanics. For instance, the emphasis on family unity can be seen in larger household sizes—an average of 3.8 people per Hispanic household, compared to the U.S. average of 3.2.

Education is another key value that resonates with Hispanic consumers. Although only 18.8% of Hispanics hold a college degree, pursuing education is highly prioritized. For marketers, messaging around educational opportunities and products that support learning and personal development can resonate deeply with this audience.

A blend of traditional values and contemporary aspirations also influences Hispanic identity. The report highlights that Hispanic Millennials, particularly, embrace themes commonly associated with American pop culture, such as freedom and equality. This generation is more likely to value the ability to pursue their dreams and believe they have control over their futures, reflecting a strong alignment with broader American values while maintaining a distinct cultural identity.

Language and Biculturalism in the Hispanic Market

Language plays a central role in shaping the Hispanic identity in the U.S. While 75% of Hispanics report being able to hold conversations in Spanish, 84% are also fluent in English. This bilingualism within the Hispanic market reflects the unique bicultural experience of many Hispanics, who seamlessly navigate between two cultural worlds. Many identify more with their country of origin (e.g., Cuban, Mexican) when interacting with other Hispanics rather than broad terms like Hispanic or Latino.

For marketers, this biculturalism presents both challenges and opportunities. Brands that can authentically communicate in English and Spanish while respecting the cultural nuances of the Hispanic community are more likely to be viewed favorably. Catering to both Spanish-dominant and English-dominant consumers will help businesses capture the diverse segments within this market.

The Future of Multicultural Marketing

As the U.S. population becomes more multicultural, businesses should be adjusting their strategies to reflect this new reality. ThinkNow’s report reveals that 41% of the U.S. population is now multicultural, and among those under age 20, this figure jumps to 50%. Hispanics make up a significant portion of this younger, diverse population.

This demographic shift is leading to increased investment in multicultural marketing. Two-thirds of companies plan to maintain or increase their multicultural marketing budgets in 2024, with 40% of those increasing their spend citing the economic power of multicultural consumers as a key factor. While the Hispanic market has historically been a priority for marketers, many companies are expanding their focus to include other multicultural segments, such as African Americans and Asian Americans.

The report also notes that 1 in 4 marketers have changed their approach to multicultural marketing in response to shifting demographics, revised advertising campaigns, and updates to diversity, equity, and inclusion (DEI) initiatives. As the Hispanic community grows in size and influence, businesses prioritizing culturally relevant marketing strategies will be better positioned to connect with this important audience.

Conclusion

The Hispanic market in the U.S. is not only large and growing but also increasingly influential in shaping the U.S. economic and cultural landscape. Businesses must invest in the knowledge to understand this demographic in order to tap into the market’s potential. By investing in multicultural insights, marketers can create culturally resonant strategies that help companies build lasting relationships with Hispanic consumers and thrive in an increasingly diverse marketplace.

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