March 23, 2019

By Isaac Mizrahi - Co-President of ALMA

Well, I should start by acknowledging that this article’s title can be a bit of an exaggeration, or maybe not, but I am glad it got your attention. In today’s U.S. market landscape there are two types of companies: those who actively try to connect with multicultural consumers, and those that leave it up to chance whether they appropriately connect.

The latter group’s inaction is mostly driven by their perceived lack of resources or a belief in a one size-fits-all strategy, also known as ‘Total Market’. However, one can argue that it may be more accurate to say that the divide lies between companies that recognize the country’s demographic reality and leverage multicultural consumers’ contribution as a growth engine to benefit their bottom line, and those that risk sales, growth, and profits due to inaction.

Think this is an exaggeration? Not really, if you consider that close to 10% of all national sales for several categories were made by the Hispanics living in three states alone, Florida, Texas and California.

The sheer size of these three states’ population is worth noting, and they are getting larger and larger every year, with a growth rate almost twice as large as the country’s growth average.

These states have reached a point where the Hispanic population is no longer a niche, instead they represent a significant mainstream force. In other words, even when you don’t target Hispanic consumers as a segment, your sales are probably impacted by decisions made by Hispanic consumers.

To better illustrate this point I pulled MRI-Simmons 2018 data for three different categories: consumers who purchased a new TV set in the past 12 months, consumers who purchased a pair of jeans in the past 12 months, and overall individual yogurt consumption.

As you might expect, the results showed a strong correlation between population size and consumption importance. Florida, Texas and California together represented 27% of all TV sets purchased in the past 12 months in the entire country,  27% of all pairs of jeans bought in the past twelve months, and 27% of the yogurt consumption.

Furthermore, the analysis demonstrated the importance of the Hispanic segment in these states. For TV sets, Hispanics comprised 36% of sales; for the yogurt consumption the number was also at 36%; and for jeans consumption, the Hispanic share of sales was at 41%. Hence, the statement at the beginning of this article. Almost 10% of these categories’ national sales, come from Hispanics who live in Florida, Texas, and California.

Another impact derived from a strong presence of multicultural consumers in a given market is that they do not live in a vacuum. In fact, they also tend to influence the non-ethnic population in their habits and attitudes just as much as they are influenced by mass culture themselves. We discuss this in terms of ‘mutual influence.’
One category where we see this clearly is in America’s evolving beer consumption patterns. We find that 28% of non-Hispanic consumers who live in Florida, Texas, and California are regular buyers of imported beers, a category that over-indexes with Hispanic consumers, and which has an outsize number of Latin brands available for consumption. Outside of these three states, this percentage drops to 25%. This difference may seem small, but these 3 percentage points represent tens of millions of dollars.

The idea of mutual influence goes beyond just consumption behaviors, it also shapes the non-ethnic Americans attitudes in a broader sense. For instance, one of the statements from the study is ‘I am interested in other cultures.’ Nearly 60% of non-Hispanics respondents in the three states covered by this analysis agree with the statement, while barely 50% of non-Hispanics in the remainder of the country say they also agree.

I believe that a new wave of business opportunities will be created in the next few years for multicultural marketing experts. We will move beyond leading regional markets’ strategies to also leading our industry in assessing the process of the mutual influence of cultures, and by helping Corporate America understand the consequences and opportunities associated with it.

There’s an expression that says that ‘everything communicates’. This means that everything you say, but also everything you don’t say conveys a message. Similarly, in business, everything you do and more and more everything you don’t do impacts your business. Don’t you think it is time to act and do Hispanic Marketing for real?


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