Why Food Companies Are Going Loco Over Hispanic Marketing

Last Updated Apr 15, 2010 9:00 AM EDT

With so many Americans already eating too much (23% more calories per capita than in 1970) and overwhelmed with too many choices (thousands of new products are introduced every year), you have to wonder where food and restaurant companies are going to find new growth in the U.S. The answer is simple: Hispanics.

The Hispanic marketing firm Latinum Network reports that between 2005 and 2008, food, beverage and restaurant sales from non-Hispanic consumers declined by $17.7 billion, or 2.4%, while sales from Hispanics rose by $14.8 billion, or 18%. This means that while other groups are busy cutting back in their food spending, Hispanics are spending more. A lot more. And well above and beyond the pure population growth for Hispanics, which is between 3% and 4% a year. Why else, after all, would Pepsi (PEP) care whether or not Hispanics fill out their Census forms? Its Yo Somo online campaign, which includes a chance to be in a documentary by actress Eva Longoria Parker (apparently in her directorial debut), asks Hispanics to stand up and be counted. The hidden message: Get your numbers up, so we can sell you more Tostitos and Mountain Dew. Of course, Hispanic marketing is nothing new, but it's becoming increasingly central to food companies' agendas. As Latinum Network points out, Hispanics are the only growth market for many key food, beverage and restaurant categories. For instance, according to the firm, cracker sales declined overall between 2005 and 2008, but rose 12% among Hispanics. Same with candy and gum -- non-Hispanics consumed 1.7% less and Hispanics 8.2% more. Consider products like Kraft Singles and Kool-Aid. While some eaters have shunned these aged brands as unhealthy and not remotely natural, Kraft (KFT) has decided that its messages about how Singles are made with wholesome milk, not oil and water, would resonate best with Latina moms, who are focused on what Chris McGrath, senior director of Latina cohorts for Kraft Foods, calls "food quality and value." McGrath says the campaign was very successful. None of this is likely to be music to the ears to anti-obesity advocates, who are trying to get Hispanics, especially children, to eat less, not more. Both blacks and Hispanics already have a significantly higher incidence of obesity than whites. Nobody like to talk about this, but the uncomfortable truth is that if food companies are going to thrive in the US, either prices are going to need to be higher (unlikely scenario) or somebody's going to have to eat more.

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