PRODUCT DEVELOPMENT AND PROMOTION REFERENCES

This is usually a surprise to most food marketers. While most executives are aware that Hispanic Americans are growing in importance, they usually have no idea how their resources are matched to the size of the market.

There are enough publications detailing the size and growth rates of the U.S. Hispanic population, so I won't belabor it here. However, the significance of the market cannot be understated. The U.S. Hispanic population is about 30 million people, making up 11 percent of the total population. However, this group will increase by 247 percent between now and 2050, to almost 25 percent of the total U.S. population.

But it is not just its size that makes this market so attractive to U.S. food companies-they are ideal food consumers! They are younger than the population in general. The average age of U.S. Hispanics is 29 years vs 36 for non-Hispanics. Most importantly, they manifest many of the traits that companies have only dreamed their consumers would have. Hispanic families are mlti-genreational with more children and extended family members living together. Even though they have lower average incomes, they spend about 20 percent more on groceries than non-Hispanic families. They have significantly more at-home meals prepared from scratch and use more basic ingredients in meal preparation.

Once of the most important factors is that Hispanics are among the most brand loyal customers in the market. When asked whether they agree with the statement, "I do not buy unknown brands merely to save money," only 24 percent of non-Hispanics strongly agreed, while 48 percent of Hispanics strongly agreed with that statement.

What steps must a food company take to insure it will get its fair share of the Hispanic food dollar? First and foremost, it must understand that there is not just one homogeneous Hispanic market. In fact, the U.S. Hispanic market is composed of many different ethnic groups that all speak Spanish. The three most significant groups are the Mexicans, Puerto Ricans and Cubans, but U.S. News and World Report(May 11, 1998) suggested that there were 17 different subcultures in the Spanish-speaking community.

While the strategy for Hispanics may be the same as for any subculture, the tactics may vary. For example, you may have a Hispanic celebration day sale planned, but in the Mexican-American markets it may be Cinco de Mayo (May 5) while in Puerto Rican markets it may be Puerto Rico Emancipation Day (March 22). But keep in mind that even if you have a slight faux pas, Hispanics tend to be very forgiving and recognize that you are just trying to better serve their markets.

Additionally, the U.S. food company must recognize that the traditional brand management system will not work. No matter how much it is drummed into the heads of the national brand managers that Hispanics are or will be important, they will still focus on 89 percent of the market (non-Hispanics), even though that portion is destined to fall to 75 percent. You want your major marketing effort to focus on the largest markets, but you do not want to walk away from other profitable markets. The national brand manager may not be willing to spend time distributing to the bodegas of the Hispanic community, with their low volume compared with Kroger or Ahold, but you can reach 60 percent or more of Hispanic shoppers through those distribution channels.

You must create an ethnic marketing team, whose sole job it is to market to the various ethnic groups, such as Hispanics.

Hispanic marketing does not necessarily mean you need to hire only Hispanic Americans to market the product. It does require that you hire people who will be sympathetic to the issues and concerns of the Hispanic consumers and who will know where to draw on expertise to create effective marketing. Gary Berman of Market Segment in Coral Gables, Fla., specializes in targeting all ethnic segments. There are already a large number of specialized Hispanic advertising agencies and research companies. There are three Spanish-speaking TV networks and a myriad of radio stations. There are numerous print media, from newspapers to glossy magazines, targeted to U.S. Hispanics.

The July 12, 1999, cover of Newsweek was titled "Latin USA: How young Hispanics are changing America," The question is, are you changing to take advantage of this wonderful potential? The market is there and growing. They cook and eat at home. The marketing services are in place. What are you waiting for?