Add Nielsen to the list of many organizations that have now studied, sliced, and dissected the new Hispanic market. But this study, released earlier in the month, has given us a few new things to think about.
U.S. Hispanic Population, 2010 Census. Source: Wikipedia
First is the sheer relative size of the market. The U.S. Hispanic market is expected to reach $1.5 trillion in buying power by 2015. Numbers like this have been reported before, but the 2015 number is even more interesting when you look at the relative strength of the market. According to Nielsen, the per capita income of U.S. Hispanics is now higher than it is in any of the so-called emerging BRIC (Brazil, Russia, India, China) nations. Shorthand: if U.S. Hispanics were a nation, it would qualify perhaps as the world's leading emerging country. If that doesn't get your attention, I don't know what will.
But let's pause a moment before looking at Nielsen's other key finding: namely, that Hispanics "exhibit distinct product consumption patterns and are not buying in ways that are the same as the total market." Just a few weeks ago, the Pew Hispanic Center - an organization that has been following the development of the Hispanic market perhaps more closely than anyone else - found that most Hispanics reject the use of the umbrella terms "Hispanic" and "Latino." According to the study, a "majority (51%) say they most often identify themselves by their family's country of origin; just 24% say they prefer a pan-ethnic label." With evidence that Hispanics are not a simple, monolithic tribe, what use do marketers have with generalities about the size of the market, the strength of the market, and - as Nielsen's note about "distinct product consumption patterns" suggests - the special habits of participants in the market?
The answer lies in the countervailing evidence that marketers have uncovered. Despite the fact that many of us would rather identify according to country of origin, there are in fact things that bind a wide range of different Hispanic cultures in the U.S. I call this effect the "metatribe" - the loose aggregation of different groups that sometimes come together when they are approached the right way, or the wrong way. According to the results of a recent project sponsored by the White House (disclosure: I am an informal advisor to the group), Latinos throughout the U.S. - regardless of their country of origin - are interested in jobs, education, healthcare, immigration reform, and Hispanic heritage. The lesson for marketers here may be, "Don't get hung up on labels." Hispanic, Latino…a rose by any other name may smell as sweet. Provided the effort is authentic, Hispanics can be approached as a group.
But what I like about the Nielsen study is that it takes the idea of unity one step further. By saying there are distinct consumption patterns, Nielsen in essence is saying two things: first, because of the sheer size of the market, marketers will absolutely need to adapt to the new patterns:
"In many categories, Hispanics have different consumption growth rates than Non-Hispanics. Beverage sales trends powerful evidence of Hispanic consumers acting as the accelerators for growing categories and the brakes for declining ones. This can be described as the Hispanic Advantage that is found in the projected Compounded Annual Growth Rates (CAGR) from 2010 to 2015 in eight of nine beverage categories, where Hispanic CAGR is equal to, and in many cases higher than the CAGR of non-Hispanics. These projections mirror trends show powerful evidence of Hispanic consumers acting as the accelerators for growing categories and the brakes for declining ones."
Second - and this is what's most interesting - the Hispanic market is not showing any signs of acculturating or vanishing into the so-called "melting pot." That may not be a challenge for marketers who have accepted the realities and dictates of multicultural marketing. But for those who haven't, it may be a big wake-up call. If Hispanics keep growing at the pace we are expected to grow - one out of three Americans by 2050 will be of Hispanic descent, according to projections by the most recent census - and we keep refusing to "melt," the U.S. Hispanic market, with all its irregularities, may soon become the new normal, or at least one of the new normals.
Advice to marketers: do not wait. The future is already here.
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Giovanni Rodriguez is an author, consultant, and public speaker on organizational leadership and digital/social communications. The views expressed in this blog are entirely his own.
March 19, 2014