While the American economy floundered, and consumers as a whole tightened their belts, the growth in Hispanic spending was twice the growth in general market spending, according to a December 2009 analysis of consumer expenditures and corporate growth strategies by the Latinum Network.
The Latinum analysis shows that non-Hispanic consumer spending from 2005 to 2008 grew only 2.9%, while Hispanic consumer spending increased 6.4% in that same period. The Latinum report is the first in-depth analysis of the latest figures from the U.S. Bureau of Labor Statistics on spending behavior as it relates to the Hispanic community.
The Latinum report reveals that significant commercial opportunities exist in major categories where Hispanic consumer spending growth far outpaced the general market. The major categories include cereals, computers, education, fees and admissions, food away from home, laundry and cleaning supplies, major appliances, vehicle finance and insurance, women's apparel, and a range of other categories. For example, from 2007 to 2008:
- U.S. Hispanic consumers were responsible for 30% of the $40bn growth in the food business.
- U.S. Hispanics spent 58% more on education compared to a much more modest increase of 9% for non-Hispanics.
- U.S. Hispanics increased their entertainment spend on fees and admissions by 14% as compared to a 7% decline for non-Hispanics.
"In this economic environment," says Latinum principal Michael Klein, "categories such as these provide opportunities for brands to grow 'organically' by maintaining or increasing their share of an expanding pie. At the same time, we're seeing companies invest in the development of categories where Hispanic spend has been relatively low but is poised to take off."
Latinum's analysis also shows that the highest spending power among U.S. Hispanics is concentrated among those who are increasingly upwardly mobile, yet still influenced heavily by traditional cultural norms.
"As companies look to accelerate growth in 2010, brands that ignore, or misread, the impact of cultural factors on purchasing behaviors may leave the lion's share of U.S. Hispanic buying power on the table," adds Latinum principal David Wellisch. "This segment within the Hispanic market represents an attractive growth opportunity for many companies which have traditionally targeted their incremental investments on the unacculturated consumer. They're growing in number, they have the most money to spend, they behave more like general market customers in terms of what products they buy and how much they spend, yet they still respond well to culturally-relevant messages."
"December 2009 Analysis," conducted by the Latinum Network, January 5, 2010. Website: www.latinumnetwork.com.