A Latin awakening

Dairy Field, Jun 2003 by Petrak, Lynn

* Manufacturers say "hola" to a rapidly growing Hispanic market for dairy products.

The nation's largest minority group is garnering a majority of attention these days. The U.S. Hispanic population, long predicted to become a major socioeconomic and cultural force in the nation, is making its presence felt and influencing overall trends throughout the consumer marketplace.

The evolution of this group from a niche to a powerhouse represents a sea of change in the food and beverage industries, which often have been riding the same tides year after year. The pertinent topic, of course, is the role of dairy manufacturers - are they taking a siesta or planning a fiesta to reach out to Hispanic customers?

The answer is somewhere in the middle. Many dairy processors have launched products specifically targeted to Hispanics in recent years, from exotic fruit-flavored yogurts to authentic Mexican cheeses. To the point, only a handful of Americans likely knew what duke de leche tasted like 10 or 15 years ago. Supporting the spate of new products are marketing campaigns that increasingly target Hispanic consumers, often developed with a cultural knowledge and communicated through Spanish language outlets.

Still, the market has a lot of room for growth that dairy companies are poised to capture. Duke de leche is only one flavor, after all, while three-cheese taco blends are a nice starting point but not the end-all, be-all for true Hispanic-style cheeses.

According to some industry experts, various trends are aligned right now that make the popular culinary trend "fusion" a reality for the food and beverage market. Products can and will be aimed at certain demographics and in turn, will become part of the nation's collective palate. "'Mainstream' is becoming more ethnic by the day," says Alan Hiebert, an analyst in the education department of the International Dairy Deli Bakery Association (IDDBA), Madison, Wis. "On the whole, the U.S. population is demanding food with bold flavor, and many ethnic cuisines fit the bill. At the same time, the U.S. population is becoming more knowledgeable about ethnic cuisine - it used to be that there were Mexican restaurants which had standard Americanized fare, but now there are Cuban, Puerto Rican, Southwestern, and Argentinean restaurants."

Corinne McGarrity, marketing director for the Washington, D.C.-based International Dairy Foods Association (IDFA), agrees that Hispanic food preferences are broadening and cannot be ignored. "It's definitely an area that most processors should be able to capitalize on. We are developing programs for processors to use, giving them tools to take into their markets and help them reach this market," she says.

A Demographic Demonstration

Twenty years ago, futurists predicted that the growth of the Hispanic population, would have a major impact on the country. Recent statistics bear out those projections, with population increases occurring across a variety of areas and ethnic groups. U.S. Hispanic consumers can trace their roots to many nations, including Mexico, Puerto Rico, the Dominican Republic and Central American countries like Ecuador and Honduras. While a smaller component, immigrants from Spain also are considered part of the Hispanic demographic group in this country.

Overall, based on the most recent U.S. Census statistics, the Hispanic population grew a dramatic 57.9 percent from 1990 to 2000, from 22.4 million to 35.3 million. According to data compiled by Chicago-based Information Resources Inc. (IRI), the number of Americans who define themselves as Hispanic is projected to reach 42 million by 2007, a growth rate of about three percent a year. Within the category, about 58 percent are of Mexican descent, followed by "other" at 17 percent, Puerto Rican at 10 percent, Central American at 4 percent, Cuban at 4 percent, and Dominican at 2 percent.

By location, Los Angeles is the leading Hispanic market here, with a population of more than 4.2 million. Other major metropolitan areas with a large number of Latino and Latina consumers are New York; Chicago; Miami; Houston; Riverside-San Bernadino and Orange County, Calif.; Phoenix; San Antonio; and Dallas.

One industry leader not surprised by the statistics is Jeff Manning, executive director of the California Milk Processor Board (CMPB), Berkeley, Calif., which began sponsoring Spanish-language advertisements in 1994. "It is amazing how many food marketers have only started doing that since the 2000 census. It took the census to wake them up," he says. "The major food companies are now saying, 'We need a Hispanic marketing program, too.'"

While large cities have high concentrations of Hispanics, experts caution against making any market-based assumptions. "It is not just a California or Miami phenomenon. This shift to the Latinization of America is happening, and it won't be in just a couple of states," predicts Manning. McGarrity agrees, based on research she has encountered during her work at IDFA. "It is almost everywhere. And if you look at the largest growth segments or cities it won't be Los Angeles, New York and Texas - it may be small areas you wouldn't think of, like South Carolina or Georgia, which have a large percentage of growth in their Hispanic populations," she explains.