Ethnic Marketing: Fluency Means Currency
With more than half the U.S. population growth from 2000 to 2010 fueled by Hispanics, it behooves consumer packaged goods (CPG) companies, marketers and retailers to step up their ethnic-marketing competencies.
Unfortunately, many have failed to make the strides they should have by now. And there’s plenty at stake: One study projects Hispanic purchasing power to reach an estimated $1.5 trillion by 2015.
Glenn Llopis, a former corporate executive who spent several years with Sunkist, should know about this shortfall. Llopis, a Hispanic American, has been able to use two lenses—personal heritage and corporate marketing—to assess how CPG companies and retailers can market to Hispanics in a meaningful way.
Llopis is also the founder of the Center for Hispanic Leadership and a best-selling author of several books on Hispanic culture. “Cultural intelligence has to replace the misguided notion that simply translating English copy into someone’s native language is all a food company or retailer needs to do” to reach an ethnic group at their point of need, Llopis recently told Convenience Store Products.
“Embracing cultural sensitivity has become critically important to the design of new business models, leadership development and the relationships that brands earn with their consumers,” he continues.
Llopis believes that manufacturers and retailers don’t have to be of a specific heritage to sell to that particular cultural group. But they do need to invest the time in learning about their cultural characteristics and the values that would drive them to trust your brand.
“Brands don’t have to communicate in Spanish—they must communicate in their culture,” says Llopis.
Manufacturers and retailers all have an opportunity to turn the Hispanic shopper into a loyal customer, and many brands across the channels have found success.
After a couple of neighborhood successes in Houston, grocer H-E-B brought its Hispanic-influenced Mi Tienda concept to the Austin, Texas, market. The company evaluated the area demographics followed by customer surveys and introduced a store designed to appeal to a large Hispanic immigrant population.
The remodel brought with it 6,000 square feet of additional retail space and 40 new employees. Its recent debut, with food tastings and giveaways, received an enthusiastic reception from the neighborhood.
Facing the produce department is an in-store “masa factory” and tortilla press where packages of fresh white-corn masa sit alongside others flavored with strawberry, pineapple and chile peppers. “The in-store tortilla machines put out a ready supply of white-corn tortillas, as well as flour,” he says.
Around the corner from the tortilla line is an in-store bakery with an abundance of brightly colored Mexican pastries. A deli situated along a remote store wall offers several flavors of fresh salsas and cremas, prepared foods such as rotisserie chickens, and an extensive selection of packaged meats and cheeses imported from Mexico. The meat market is an authentic carnicería (Mexican butcher shop) featuring chorizo and several cuts of seasoned fresh meats prepared daily in the store.
Antonio Swad, an Italian-Lebanese immigrant, founded the $40 million Pizza Patrón chain, based in Dallas. “Pizza Patrón has built an extremely loyal following with first- and second-generation Hispanics by satisfying the culturally relevant needs of these consumers,” says Llopis. “Swad may not be Hispanic, but he has demonstrated that culture is the new universal language in America.
“First, you must understand how culture defines the identity of the Hispanic person. If you don’t understand their cultural characteristics, then you will not understand how Hispanics are wired to think and why they purchase and remain loyal to certain brands,” he says.
Hispanics have an affection for grab-and-go foods, Llopis says, and c-stores definitely have this as a built-in strength. As such, they should concoct ways to better leverage it for ethnic marketing. “It’s not, ‘How do I create bilingual messaging,’ but, ‘How can I offer certain incentives for the Hispanic consumer?’ ”
From a grab-and-go foodservice standpoint, one shining example of a retailer taking advantage of Hispanic growth trends (and doing so in a state that is a microcosm of national growth) is the Laredo Taco Co. foodservice brand. The brainchild of Susser Holdings Corp., the proprietary program offers handmade tortillas and a plethora of menu items in more than 325 of Susser’s 500-plus Stripes stores.
With the locations selling 200,000 food items per day and making up about 30% of the Corpus Christi, Texas-based company’s gross profits in 2010, Laredo Taco Co.’s menus are far from standardized, but feature a subtle variation from market to market, all predicated upon unique consumption trends of Hispanic consumers living in those respective markets. Because, as Hispanic marketing experts know, there are unique regional differences across the various Hispanic subsets.
On a macro level, marketing collaborations with manufacturers is a great way to engage the Hispanic shopper, says Llopis, but retailers need not wait for these programs to manifest. “Many times the brands dictate the strategies for c-stores, so why can’t the c-store be more proactive?” he says.
If more brands valued “cultural ingredients” and began to invest in Hispanic consumers in the right way, “tension points would begin to dissipate and revenue streams would grow,” says Llopis. “Hispanic consumers don’t want to be sold to; they want to connect with brands that embrace their culture and commit themselves to earning long-term and trustworthy relationships.”