CPG Companies Grow By Targeting Hispanics

U.S.-Hispanic

Marketing efforts targeting Hispanics are correlated with overall revenue growth for consumer packaged-goods companies and CPG-based retail companies, according to a study commissioned by the Association of Hispanic Advertising Agencies and performed by Santiago Solutions Group.

That’s not surprising, considering that Hispanics make up 17% of the population, wielding a total $1.2 trillion in buying power.

The AHAA study examined the top 500 U.S. advertisers from 2006-2010 and determined with a 95% confidence level that among the CPG brands studied, the share of marketing resources devoted to targeting Hispanics accounts for roughly one-third of overall revenue growth.

Companies that devote more marketing resources to targeting Hispanics saw higher revenue growth, on average, than companies that did not make Hispanic marketing a high priority.

The study identified a number of CPG companies and CPG-based retailers as “best in class” for their substantial Hispanic marketing efforts, including Coca-Cola, General Mills, Ralcorp, Groupe Danone, Nestle, Walmart, and Walgreens.

The AHAA study also noted a number of factors that make Hispanics desirable marketing targets for CPG companies and advertisers in general, including larger households (at an average 3.8 individuals per household, compared to 2.5 for non-Hispanic households) and a higher household formation rate than the general population.

Together, these facts mean that Hispanic household expenditures for food are predicted to grow at an annual rate of 5.7% over the next decade, according to Credit Suisse, compared to 2.5% for non-Hispanic households.

Roberto Orci, AHAA chair and CEO of Acento, stated: “CPG companies not only want to gain market share among their competitors but they also want to provide growth and stability for their investors -- investing in Hispanic marketing is a clear strategy in achieving that twofold objective.”

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