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Posted May 25, 2004 by publisher in Cuban American Business

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Teresa Borden | The Atlanta Journal-Constitution

When Rene Michel Diaz started importing Hispanic food brands to Atlanta in 1980, he would order 100 cases a month of Bustelo coffee, a Cuban favorite. Now, he orders fewer than five.

But his orders of Maseca cornmeal, for Mexican tortillas, are going through the roof.

Such are the quirks of the Hispanic market, which Diaz knows intimately. “In the last seven or eight years, the population has changed so much,” he said.

For years, marketers have urged U.S. companies to gear up to serve the sleeping giant that is the Hispanic market, with more than $600 billion in buying power.

Big and medium-size companies heeded that advice, setting up Spanish-language Web sites and running ads featuring Latin celebrities.

And yet, though census figures showed Mexicans and Central Americans, as well as U.S.-born Latinos, flooding into cities throughout the country, the Hispanic buying boom didn’t materialize quite as expected.

“It shouldn’t come as a surprise that there hasn’t been this monolithically huge groundswell,” said Christopher Crommett, senior vice president at CNN en Espanol. “Rather, it’s an awareness that’s popping up in different pockets as people get smart about ‘Where am I?’ and ‘Who do I want to appeal to?’ ”

Experts say Latino culture is so segmented and dynamic that it can befuddle advertisers who are not intimately familiar with it. The numbers may make the Hispanic market seem like a sellers’ Shangri-La, but companies have discovered it to be more of a marketing minefield.

Crommett said Hispanics differ along two major fault lines: country of origin and length of time in the United States.

You might sell picante sauce and tortillas to a recent immigrant from Mexico, but a second- or third-generation Puerto Rican might never pick up the stuff. Or, while a mother of three who is a new immigrant might shop Wal-Mart for children’s clothes, another mom whose family has been here two or three generations might want investment counseling or a home loan.

Diaz commiserates with the baffled presidents of more mainstream companies. As a businessman catering to a relatively narrow market—- new immigrants who miss the brands popular back home—- he understood his market was going from predominantly Cuban to mostly Mexican.

“One size doesn’t fit all,” Crommett said. “It’s important to put things in context and to be mindful that you are reaching across national boundaries.”
Hard to predict tastes

The market is evolving and becoming ever more varied because Hispanics don’t assimilate like other groups, said Dick Thomas, senior vice president at Synnovate, a Miami-based market research company.

Hispanics pick and choose what they want to identify with from their own culture and the prevailing mainstream culture. That makes them more versatile, but harder to predict as consumers.

It’s a lesson companies are learning as they seek to tailor their pitch to the community. Conventional business wisdom is that, with new audiences, companies have only one chance to make an impression. A tone-deaf approach might be worse than none at all, but not being in the market is no longer an option.

Verizon Wireless has seen a “significant increase” in its Spanish-speaking customer base in the past four years, said spokeswoman Caran Smith, though she refused to give numbers. To cater to Hispanics, the company developed North American Choice, a calling plan that includes calls to Mexico, Puerto Rico and Canada without roaming or long-distance fees.

Cingular Wireless wants in, too. Spokesman Clay Owen said Cingular has put together a Hispanic marketing team and hired a Hispanic ad agency.

Georgia-based Home Depot puts bilingual personnel and signs in its stores to cater to Hispanics. Ellen Dracos, vice president for store brands, says the company is tops among Hispanics for home improvement.

“In the U.S., we’ve seen rapid growth in that market,” she said. “But I wouldn’t call it a spike.”

Home Depot last week announced it had acquired 20 stores in Mexico of its No. 2 competitor there, Home Mart. Dracos said the company will send more employees there to pick up pointers about Mexicans’ buying habits that could help the company with its marketing effort among Hispanics in the United States.

The numbers make the effort worthwhile. A yearly report on minority buying power by the University of Georgia’s Selig Center for Economic Growth said that nationally, Hispanic buying power trailed African-American buying power in 2003 only marginally: $652 billion to $687 billion.

Selig director Jeffrey M. Humphreys said that in 2003, Georgia ranked 10th among Hispanic markets in the United States, up from 19th in 1990.

“They are in metro Atlanta in large numbers,” Humphreys said. “They control quite a bit of money.

  1. Follow up post #1 added on May 26, 2004 by publisher with 3905 total posts

    We added the Hispanics section a few months back to monitor and post news articles like this.

    Large and small businesses should be exploring this diverse market right now.

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