• by Karlene Lukovitz  @KLmarketdaily, August 22, 2007

Got Licuados?

Maybe not today, but if you're in the food and beverage (F&B) business, the growing crossover appeal of the Hispanic milk-and-fruit-based blended drink known as a licuado is more than likely to play a direct or indirect role in your company's future (if it isn't doing so already).

The California Milk Processor Board wasn't just being clever when it recently adopted this Hispanic/English hybrid version of the famed "Got Milk? campaign as a tagline. This organization is predicting that licuado will become "the next burrito."

And while beverages are an important part of the Hispanic-influence juggernaut that's impacting the U.S. F&B industry with growing force each year, they are by no means the whole enchilada.

The U.S. Hispanic F&B market reached nearly $5.7 billion in 2006, and is expected to grow by 11.5% this year to reach $6.3 billion, according to a new study on this sector from Packaged Facts, the publishing division of Marketresearch.com. In addition, PF predicts that the market will show CAGR of 7.4% over the next five years, to reach $8.4 billion by 2011.

The data include three PF-defined categories: "authentic Hispanic" products (any product, whether Hispanic in origin or not, made in or imported into the U.S. from Hispanic countries, plus traditional staple items made in the U.S. by a Hispanic manufacturer, and products made here using traditional Hispanic recipes); "mainstream Mexican" (foods such as nachos, salsa, tacos and tortillas that have become part of mainstream American habits--although PF excludes tortilla chips, chili products and alcohol in calculating market size for the very reason that they are now "so American"); and "nuevo Latino" (traditional American foods made with Hispanic ingredients, plus "unique new creations that meld a variety of Hispanic flavors and food traditions").

Among the top 10 Hispanic F&B categories by total sales, stand-outs in terms of CAGR between 2002 and 2006 were bakery items (17% CAGR), rice/rice mixes (14.3%), picante (9.8%) and seasoning/spice mixes (6.6%). But cheese and sauces/marinades each grew in the 5%-plus range, and even the top-selling categories continued to make gains: tortillas/taco shells (4.5%), salsa (1.7%), entrees/handheld items (5.2%), and refried beans (1.9%).

PF projects that five categories will experience double-digit CAGRs between this year and 2011, driving a preponderance of the sector's growth: milk/milk-style beverages (20%); entrees/handheld items (19%); meat (16%); fruits/vegetables (14%) and yogurt/cultured dairy drinks (14%).

It's hardly news that the leading marketers of Hispanic F&B products in the U.S. now include not only names like Goya, Authentic Specialty Foods, Cacique and Don Miguel Mexican Foods, but Campbell, ConAgra, General Mills, Procter & Gamble, Hormel, Kraft and Nestle.

(Advertising to U.S. Hispanics reached $3.3 billion in 2004. In 2006, P&G spent $158 million on consumer packaged goods advertising in Hispanic TV and print media, PepsiCo spent nearly $74 million, and Johnson & Johnson spent $71 million, to mention but a few of the top users of these media.)

More intriguing are the ever-more effective, and aggressive, strategies being employed by marketers playing in the big leagues within this space.

Kraft--which has been marketing to the Hispanic community for 20 years--doesn't rely on its mainstream Mexican brand Taco Bell, points out PF. Instead, the mega-marketer focuses on research, adapting products to the needs and preferences of these consumers, employing region-specific marketing teams, and offering on-target outreach tools like its bilingual food site, ComidaKraft.com. The site includes a bilingual search tool offering a wide variety of recipes--regional and Latin-inspired, as well as traditional American fare--step-by-step preparation instructions, plus personalization tools and on-demand English-to-Spanish translation.

Recognizing U.S. Hispanics' high rates of diabetes, high blood pressure and lactose intolerance, Kellogg has created a mobile tour in partnership with Lactaid that will visit 125 locations to offer tests for such medical conditions. Bilingual nurses will administer the tests, and participants will learn about the program through a brochure that was created in Spanish, and receive a bilingual magazine offering advice on healthful eating.

Last fall, General Mills began deploying bilingual brand ambassadors to 200 locations in California and Southwest states to pass out goodie bags full of samples of its brands and copies of Editorial Televisa's magazine Que Rica Vida (also the official name of the tour).

Meanwhile, Unilever is going all out with its "Desafio de Sabor" ("The Flavor Challenge"), an outreach program based on regional cooking competitions in key Hispanic markets; and ViveMejor, its first program to include all of its food and personal care brands within a single platform targeted to Hispanics. The program includes print, digital, TV and retail Hispanic elements.

That's not even touching on the innumerable, ambitious efforts being unfurled to capitalize on non-Hispanics' increasing passion for both "mainstream" and more adventurous Hispanic-influenced food and drinks.

"The yearning to experiment with all foods Hispanic has practically become a Latin fever in the United States," sums up PF publisher Tatjana Meerman.

And while big marketers are clearly hip to the Hispanic phenomenon, "mañana" is not a word that figures in their strategic vocabulary.