Latin
Rhythm & Boom
The Hispanic Market
By Alison Hessert
W
ith salsa the number 1 condiment in the U.S., the Margarita one of the
most popular drinks around, Latin pop stars Enrique Inglesias and
Shakira burning up America’s airwaves, and J. Lo’s every move being
recorded by the media, it’s hard to ignore the Latin rhythm.
That’s because the Hispanic population has grown
beyond all projections during the past decade. It is now
the number one ethnic group in the U.S. One in every 8
Americans today is of Hispanic origin. By 2030, it will be
one in five. They spent an estimated $580.5 billion in
2000 and are expected to exceed $925 billion in 2007. Is
it any surprise smart marketers are developing a relationship with this young, vibrant, social and extremely brand
loyal consumer now?
Hispanic Marketing 101 with a TWIST
The key to understanding the
Hispanic market is to realize that as it
grows, its members are not merely
blending into the American melting
pot. They are remaining true to their
heritage and traditions as evident by
their increasing impact upon mainstream American culture with their
mojitos, Nuevo Latino cuisine, and
salsa dancing. Therefore, it is critical
to speak directly to the Hispanic market with a message that is “relevant,”
according to Aleco Azqueta, Dewar’s
national
marketing
manager.
“Relevant to their lifestyle and to
organizations that they trust,”
Azqueta emphasizes.
One way marketers meet this
challenge is to hire Hispanic agencies for hands-on insight.
Others even create divisions entirely devoted to multi-cultural efforts, or specifically, the Hispanic market. Six years
ago, Jack Daniel’s created a full Hispanic division and
named it “Alma.” The very name of the group demonstrates
the inherent differences in marketing to Hispanics versus
the general population. Alma means “soul” in Spanish and
conjures up not only cultural implications, but also hints at
the emotional nature of Hispanics. Today, the division has
grown to more than 15 people dedicating themselves to
promoting Jack Daniel’s within the Hispanic community.
Other companies, such as Glazer’s Wholesale
Distributors, have taken it one step further. In addition to
creating a Market Development Team in Texas with a bilingual sales force, last September Glazer’s organized a
Hispanic Opportunity Conference in Texas where the
Hispanic population is 6.7 million (32 percent of the state’s
population). To educate key executives in the industry, they
brought in top experts to give an overview of the market
and examine Hispanic purchasing behavior.
The 35.3 million Hispanic population in the U.S. is
expected to double by 2025. According to Joseph Metevier,
group marketing manager of Bacardi, the major mistake
people make is to “assume that one strategy/execution fits
all Hispanics.” Despite general perception, the Hispanic
market is not a monolith. It is comprised of people from
dozens of individual countries of origin, each group bringing to the U.S. their country’s specific traditions and cultures. The bulk of the Hispanic population can be broken
down into three distinct segments with 58.5
percent of U.S. Hispanics MexicanAmerican, 9.6 percent Puerto Rican, and 3.5
percent Cuban. The remaining 28+ percent is
comprised of people from cultures as distinct
as the Dominican Republic, Colombia, Chile,
Peru, Argentina, and Ecuador.
How you target a newly immigrated
Mexican in East L.A. is very
different from how you speak to a
third generation Cuban in Miami.
Marketers also have to pay attention to
regional concentrations. While the Hispanic
population is strong in major urban areas
across the U.S., it is geographically concentrated in the
West Coast, Southwest, Florida, New York, and Illinois. In
some markets such as East Los Angeles, the Hispanic community is actually the majority, and in the state of
California, Hispanics account for 32.4 percent of the population. Of these, the majority are Mexican-Americans who
are also heavily concentrated in Southwestern states such
as Texas, while Cubans live in South Florida and New York,
and Caribbean Hispanics reside in New York, Chicago and
Philadelphia. As a result, how you target a newly immigrated Mexican in East L.A. is very different from how you
speak to a third generation Cuban in Miami. And a Cinco
de Mayo promotion doesn’t necessarily have crossover
appeal to other Hispanic segments beyond MexicanAmerican. For example, when Schieffelin & Somerset
launched Hennessy in the Hispanic market, their approach
in Texas differed dramatically to that in New York.
Patricia Vasconcelos, Hispanic market manager for Jack
Daniel’s, attributes the success of radio with Hispanic programming and out-of-home media, whether billboards or
trucks cruising about town in densely populated areas, to the
fact that Hispanics are so geographically concentrated and
spend a lot of time outside the house.
En Español, Por Favor
With the cultural nuances of the
varied Hispanic segments, the most unifying factor is the
Spanish language. According to the 2000 Study by
Synovate’s Diversity Research Unit, formerly Strategy
Research Corporation, Spanish is the first language spoken
by 88.6 percent of U.S. Hispanics and while many become
bilingual, 70 percent continue to speak predominantly
Spanish at home. No matter how long they’ve been in the
U.S., communicating to them in their native tongue hits an
emotional chord and proves that you’re talking directly to
them, making them more responsive. Pete Izaguirre, owner
of The Pantry, a 4,000 square foot retail store in Dade
Country, whose clientele is over 95 percent Hispanic, claims
MAJOR LATIN HOLIDAYS
January 6th – Three Kings Day
March/April (Palm Sunday to Easter Saturday)–
Semana Santa/Holy Week (Catholic Feast)
April 14th – Pan American Day
May 5th – Cinco de Mayo
May 20th – Cuban Independence Day
November 1 & 2
st
nd
– Dia de los Muertos (Day of the
Dead/All Soul’s Day)
September 16th – Diez y Seis de Septiembre (Mexican
Independence Day)
September 16th thru October 15th – Fiestas Patrias
(month-long fiesta celebrating the independence of
many Latin American countries)
December 28th – All Saint’s Day
that his customers respond best to either bilingual or Spanish
point-of-sale materials. While he says that in some ways this
is a no-brainer, not enough of the brands supply him with the
right materials.
One marketer that gets it is Johnnie Walker Black. The
brand recently ran a Hispanic-targeted “quote” campaign
with POS, print and radio vignettes featuring inspirational
quotes from all over the world translated into Spanish.
“While the use of Spanish language made the campaign culturally relevant, it really resonated with all Hispanics because
the quotes were not regionally specific,” according to Manny
Gonzalez, senior manager of multicultural marketing for
Schieffelin & Somerset. “For example, the quote Progreso
depende del esfuerzo persona (Progress depends on individual
effort) is universally inspirational to all Hispanics.” The key
is to be sensitive to cultural nuances and watch for idioms.
The Latino Spirit
As a predominantly Catholic culture
deeply rooted in heritage and tradition, Hispanics are very
family and community oriented. Therefore, grassroots and
events marketing efforts are particularly effective, especially
when geared around holidays, whether culturally-driven like
Cuban Independence Day (May 20th) and Dia de los
Muertos (November 1-2) or even Mother’s Day or the Fourth
of July. To take advantage of this, Dewar’s 12 recently celebrated Father’s Day and graduation time with a “Momentos
para Brindar” (Moments to Toast) campaign showing fathers
and sons together, emphasizing family ties. And to celebrate
Three Kings Day (January 6th), a Christmas holiday observed
by many Latin Americans, Dewar’s 12 launched a “Regalo
para Reyes” (Gift fit for Kings) campaign.
Salud Tradicion!
Hispanic alcohol preferences are often
based on what they or their parents drank back home –
Mexicans drink mostly tequila and beer, while Caribbean
Hispanics and Cubans lean towards rum. The most popular
brands are those familiar to them, such as Jose Cuervo,
Bacardi or their country’s local brand of rum. Yet there is an
opportunity for marketers who sell premium goods since
when Hispanics come to America to better themselves, they
bring with them high aspirations. As their income levels rise,
Hispanics aspire to drink premium brands, whether Cruzan’s
Single Barrel Rum or Chivas Regal, because they represent
obtainable luxury.
10
THINGS RETAILERS & RESTAURANT
OWNERS CAN DO TO BOOST SALES WITH
HISPANIC CUSTOMERS
1 ) Introduce product with Spanish/Bi-lingual POS or
POS with visuals that transcend language barriers.
2 ) Hire and train a bilingual staff.
3 ) Promote drinks the way Hispanics consume them –
with juices (orange, pineapple, grape) and mixers like
Squirt, 7UP & Coke.
4 ) Promote drink and food pairings with a Latin flair.
5 ) If possible, do sampling to increase product trial.
6 ) Capitalize upon Latin Holidays with in-store or onpremise promotions and events.
7 ) Contact local Hispanic organizations to host their
events or offer their members free cover or discounted
food/drinks.
8 ) Organize Ladies Nights and Latin Nights to get the
customers in the door.
9 ) Pipe Latin music in-store or on-premise, tailoring the
type of music to the country of origin most concentrated in your area. For Mexicans, play Mariachi,
Tejano, Norteno, Grupero; for Dominicans, Cubans
and Puerto Ricans, put on some Salsa or Merengue;
for Colombians, opt for Cumbia.
1 0 ) Advertise in local Spanish newspapers, on radio stations with Hispanic programming, and with flyers in
Latin communities.
While the overall Scotch market has
been on the downswing over the past 20
years, this is not so with the Hispanic market. Scotch, with its rich heritage, appeals
to the aspirational and machismo attitude
of the Hispanic male. The popularity of
Johnnie Walker Black amongst the
Hispanic community can be attributed not only to the fact that
the company has been targeting the market for over ten years
with culturally relevant efforts, but also to its Striding Man logo
which hits home with Hispanics as a symbol of progress.
It is also very important to recognize the role Hispanic cuisine plays in drink preferences. It is generally spicier and
demands wines that complement it such as white Zinfandels
and blush wines. Bronco Wine Company positions Forest Fire,
a sweet lightly chilled White Merlot, as the perfect wine to
accompany spicy food which has made it popular with the
Hispanic community. While their budgets are limited, the
wine industry is missing a serious opportunity by not building
awareness amongst the Hispanic Market. Not only does wine
connote prestige, the Latin culture has a strong heritage of
winemaking due to its importance in Spain, Chile and
Argentina. Furthermore, Brian Loomis, consultant to Bronco
Wines Co., notes that Hispanic women who are looking for an
alternative to the male Scotch are an underdeveloped target
for winemakers.
It is important to understand that Hispanics do not necessarily drink like the general public does. According to Joseph
Magliocco, president of Chatham Imports, Inc., while the
Marti Mojito Martini is popular with the general market,
Hispanics still prefer to drink their rum with juices. Not the
general norm of cranberry,
but instead orange juice or
unusual juices like pineapple. To connect with
Hispanic drinkers, Jim
Goodwin, VP of marketing
for Absolut, says that
Absolut promotes the brand
with drinks that have a
strong appeal to Hispanics
such as Absolut UVA
(grape juice). Hispanics’
choice of soda mixers is also
influenced before they get here. For example, Squirt – a grapefruit soda – is extremely popular in Latin America. So when
Hispanics arrive here, they may upgrade their tequila or switch
to Absolut Mandarin, but they’ll still mix it with Squirt.
To capitalize upon Hispanics’ drink preferences, successful
marketers are also introducing brands and brand extensions in
line with how they consume cocktails. To this effect, lime and
mint rums like Marti Mojito and Mojito Club as well as tropical ones like Cruzan’s Pineapple and Coconut rums are being
well received by the Hispanic community.
El Mundo Latino
For many years, Chivas Regal has increased
its brand awareness amongst Hispanics with its Chivas Order of
Distinction events program. By awarding its Order of Distinction
to community leaders as well as major Latin entertainers or
celebrities such as Spanish singer/songwriter Alejandro Sanz and
baseball pitcher “El Duque” Hernandez, Chivas
both reinforces the prestigious quality of its product in the eyes of Hispanics and gains respect
within the Latin community. Another way in
which brands gain the trust and respect of
Hispanics is by supporting the community or
organizations that give back to it. For example,
Glazer’s Wholesale Distributors has a seat on both
the Dallas and Houston Hispanic Chambers of Commerce, while
Dewar’s 12 partnered with the Hispanic Scholarship Fund to
raise money for graduate studies.
As a very young (median age is 25.9 versus 35.3 for the general population) and brand loyal group with a ballooning
spending power, the Hispanic market is an opportunity not to
be ignored, despite its complexities. One of the main stumbling
blocks to reaching the Hispanic market is the lack of funds
being allocated to Hispanic marketing by Corporate America.
The Association of Hispanic Advertising Agencies (AHAA)
just released the first-ever look at America’s leading corporate
advertisers’ spending trends to target Hispanic consumers. Its
findings were that while Hispanics represent 13.5 percent of all
Americans, Corporate America is on average only spending 3.2
percent to reach the market.
“Without the proper investment and positioning of
brands,” says Aida Levitan, the new president of the AHAA
and Co-Chairperson & CEO of Publicis Sanchez & Levitan,
“Hispanic consumers are often only left with price as the discerning factor to differentiate between brands.”
Alison Kroll Hessert is a New York City-based freelance writer who has written about everything from fashion and lingerie to restaurants and film. She
has also worked in marketing for such companies as MTV, Food & Wine From
France, The Four Seasons Restaurant, Speedo and Hue Legwear.