I would venture to say they are not because I’m not sure they really know that it’s actually Hispanics who are driving consumer spending growth in most categories today. Yes. You heard correctly. Hispanics represent about 12 percent of American households, but contributed to nearly half of the growth in consumer spending in 2010.
I defer to some compelling data from Geoscape indicating that Annual Consumer Spending Growth between 2009 and 2010 was a whopping 47% among Hispanics while representing half or less of that number among Asians (20%), African Americans (12%), and Non-Hispanic Whites (21).
To put this into perspective, this means that relative to the percent of American Households, Hispanic Households represent 12% of all households and almost half (47%) of all growth in consumer product spending. Do the math. That’s almost four times higher.
Comparatively, Non-Hispanic Whites represented 73% of Households, but only 21% of the growth in consumer spending during the same period.
Looked at from a different dimension, Hispanics’ cumulative lifetime spending is also greater because Hispanics are so much younger! Sixty percent are under 35. So think about this: Hispanics’ median age is 27 and their life expectancy is 84 meaning they have 57 more years to spend money on YOUR products.
Comparatively, non-Hispanic Whites’ median age is 41 and their life expectancy is 81 so they have 40 more years to spend money on your products. That means Hispanics Cumulative Lifetime Spending is 17 years longer than among Non-Hispanic White. Imagine how much more they could spend in those additional 17 years!!!
The key point is that in many if not most consumption categories, a Hispanic household is actually worth more, not less than a non-Hispanic white household. These facts should motivate you to run, not walk to ensure your go to market strategies are optimized to succeed in the Hispanic market.
I’ll end with a quote from Nielsen’s CEO David Calhoun and SVP Sales Clauda Pardo who advised 1,400 Consumer Products Goods manufacturers and retail executives at last years’ Consumer 360 Conference with the following:
- David advised the room to spend 65% of their time figuring out their Hispanic opportunity because it is no doubt the single biggest source of growth for all companies in the U.S. in the short and long term.
- Claudia added that within the next five years, multicultural clients will drive 86 percent of the total growth on spending at retail vs. only 10% growth without the multicultural spend.
All the indicators would tell you that if growth is what you’re after, and who isn’t. The Hispanic market can contribute to your company’s growth goals if approached correctly. So what can you start doing today to ensure your company can take advantage of this type of growth?