December 22, 2010
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Reaching under-30 Hispanic-Americans shares one caveat with selling private label goods to Hispanics over 30-lump them all into one demographic melting pot at your own risk. 
The under-30 crowd needs to be reached by considering not just age, but also country of family origin and whether they are U.S.-born or recent immigrants. 

Reaching under-30 Hispanic-Americans shares one caveat with selling private label goods to Hispanics over 30-lump them all into one demographic melting pot at your own risk. 

The under-30 crowd needs to be reached by considering not just age, but also country of family origin and whether they are U.S.-born or recent immigrants. 

Answers to those questions will impact everything from which product categories have the best chance for private label success, to language used in marketing, package design and the flavor profiles of private label products sold, experts agree.

“Whoever is designing marketing for Hispanics really needs to understand Hispanics, you have to have experts who really understand the market,” says Mark Ferro, senior account planner with Denver-based 
The Integer Group, a brand marketing firm. 

Agrees Felipe Korzenny, founder and director with the Center for Hispanic Marketing Communications at Florida State University, Tallahassee, in discussing reaching the under-30 Hispanic market: “It has to be done with care; it can not be done by an amateur.”

Anton Angelich, group vice president, marketing, with Virginia Dare, a Brooklyn, N.Y.-based ingredient supplier gives a vivid example of why all under-30 Hispanics cannot be lumped together. 

The group is so diverse, he explains, that it includes a 29-year-old U.S.-born second generation Mexican-American living in Texas who is bilingual, traveling regularly in both countries.

 He is at home in both the Mexican and the American cultures and, when it comes to grocery shopping and food preferences, “picks the best of both worlds,” Angelich explains.

But it also includes a 29-year-old Dominican-American living in New York’s Hispanic hodge-podge Washington Heights neighborhood. He is an immigrant who is married with children. His tastes, and those of his family, run to Caribbean foods he grew up with.

A third 29-year-old Hispanic is a Spanish-speaking Mexican immigrant in Tennessee working in a furniture factory, along with multiple other jobs. 

He lives with other men in an apartment while he sends money back to his family in Mexico. He grew up shopping at Walmart stores in Mexico City and so, is familiar with American brands like Kellogg’s. 

Without his wife nearby to cook for him, his food purchases tend to be made at convenience stores where he often is able to speak Spanish with clerks who can direct him to take-out options.

Lastly, Angelich adds, there’s a 29-year-old living in New Mexico whose family dates its origins in that area back to the time of famed Spanish explorers of the New World like Cortes. “They’re very, very different kinds of people,” he says of his 29-year-olds. 

Each needs to be sold different products in different ways to achieve private label success.

Where to Begin

The average age of Hispanic-America was 27 for men and 27.6 for women back in 2006, according to the U.S. Census Bureau. 

Given that the U.S. Hispanic population is expected to reach 50 million with buying power of more than $1 trillion annually once 2010 census results are tallied, that means a sizable market of young shoppers. 

The good news for food retailers targeting their private label offerings to that young Hispanic market is that, at least when it comes to second generation, U.S.-born Hispanics, there’s less brand loyalty and more openness to try new alternatives, experts agree. 

First-generation immigrant Hispanics tend to cling to brands they knew in their countries of origin. That why, for example, Colgate is the most popular toothpaste for some Hispanic groups, says Korzenny. It’s a brand they knew before coming to the States. 

Trying to win away first-generation Hispanics from Colgate is a lost cause, he contends. 
But there are categories, such as household cleaning products, where brand loyalties may not be in place and so private label can make inroads with this market.

When it comes to second-generation, U.S.-born younger Hispanics, “most categories are pretty open,” Korzenny says. The younger generation will have taste memories of the ethnic foods they ate as children but often they won’t want to do the amount of kitchen work their mothers’ did to prepare such dishes. 

So, they’re open to convenience-oriented ethnic products such as refried beans in cans, something a recent immigrant Hispanic woman would not consider, Korzenny says. 

Refrigerated and frozen products, another category their immigrant mothers likely seldom, if ever, shopped in, also present opportunities for ethnic private label offerings that can appeal to the under-30 crowd with authentic tastes.

“If it tastes like the real thing, it does well with the second generation,” says Dave Morse, president and CEO with New American Dimensions, LLC, a Los Angeles-based multicultural marketing research firm, which has done Hispanic research for the Food Marketing Institute. 

Simply positioning ethnic private label as lower-cost alternatives to name brands is not enough to attract younger Hispanics, he argues. Rather, it’s about el Sabor, the taste. “Taste trumps price. Taste is a pillar of Latin culture. Food and flavor are how they identify themselves.”

Unlike earlier immigrant groups whose second generations tended to turn their backs on their ethnic cultures, even changing names to become more Americanized, younger Hispanics want to remain tied to their roots and so continue to eat ethnic foods while at the same time eating more traditional American fare.  
As they have children of their own, they teach them about the culture. Third generation Hispanics will stay connected by learning Spanish and learning as much as possible about their cultural heritage, a process known as retro acculturalization, says Ferro. 

Food retailers need to know which Hispanic ethnic groups are prevalent in their particular markets and gear product offerings accordingly. 

Habla American?

How important is the use of Spanish in marketing private label to young Hispanics? It depends on the group being targeted. Recent immigrants need packaging and in-store signage in Spanish that provides product information, cooking instructions and other basics. 

Second generation Hispanics fluent in English are another story, however. “Retailers … say ‘they speak English so when I do marketing in English it will reach them,’” says Ferro. But Spanish-language marketing is important to the second generation for a different reason. 

“It’s more than a language issue, it’s a cultural issue. They feel that Spanish is important to them,” says Ferro. 

Spanish can be used selectively on packaging for products aimed at second generation Hispanics. Ingredient lists and other informational communications can be in English, but words that invoke family, motherhood and other emotional touchstones should be done in Spanish. 

“For the second generation, if you put some Spanish on your package, it says you care about them,” says Morse

Store signage in Spanish may not be necessary for this generation, but younger Hispanics value it nonetheless because they feel it shows a retailer cares about their mothers and grandmothers. 

Marketers call such language use “code switching,” explains Korzenny. Spanish is used to signal that the retailer wants the consumer to relate to its products. 

Code switching can be effective if done well but retailers again need to know which Hispanic groups are prevalent in their markets and which terms and Spanish phrases are used by those groups. 

Watching Telenovelas

The need to be bilingual extends to marketing as well as packaging. While younger Hispanics may be English fluent, they’re just as likely to be watching Spanish-language television, or listening to Spanish-language music and radio stations. 

“This crowd is really into entertainment,” says Ferro of younger Hispanics. “When you talk to them, you really need to be thinking in terms of anything that has to do with entertainment and anything that relates to their lifestyle.

” That can extend even to such non-traditional ad venues as movie theaters. “Hispanics go to the movies more and rent more movies than non-Hispanics,” Korzenny notes.

Packaging is an important part of any marketing mix. Conventional wisdom says brightly colored packages appeal to Hispanic shoppers, but Morse says that stereotype is based on trying to emulate bad packaging design that was once prevalent in Spanish-speaking countries across Central and South America.

 “Packaging design in Latin America has gotten a lot more sophisticated than it was ten to 15 years ago. It used to look cheap but that’s no longer the case,” he says.

Rather than just using bright colors, he suggests packages aimed at Hispanic consumers should show the product inside. “They’re from very visually and touch-oriented cultures,” he says.
Sampling also is a good way to connect with this market. “In Latin America, sampling is huge and its part of the shopping experience,” he says. 

Packaging, as well as advertising should, of course, avoid any ethnic stereotype characters or language. The days of the Frito Bandito, a sombrero-wearing Mexican stereotype used on Fritos corn chips in the late1960s, are long gone, or should be long gone, from American food shelves

Avoiding stereotypes also applies to flavoring products. Just including something like mango is no guarantee you’ll reach young Hispanics, says Angelich.

 “A mango is not a mango is not a mango,” he says. “Naïve product developers say ‘we want to reach Hispanics, put mango in cupcakes and mango in iced tea.’ A mango that is appealing to a Caribbean person probably would not be appealing to a Mexican person.”

Flavors for liquids aimed at Hispanics are progressing from single ingredients to a mix of flavors spanning the tropics, adds Paulette Haber, director of marketing and research, with Virginia Dare.

Private label can make inroads in the growing under-30 Hispanic population, experts agree, by knowing the market and remembering the touchstones of good taste and cultural appeal. And the time to start is now.

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