PALM BEACH, Fla. -- During its 2000 Mid-Year Business Conference, held here last week, the Chicago-based American Health and Beauty Aids Institute called for more direct involvement among mass retailers, including supermarkets, in forming partnerships with manufacturers to promote health and beauty care to growing ethnic populations
The U.S. African-American population is projected to increase from 12% of the total U.S. population in 1999 to 14% (from 34 million to 45.4 million) by the year 2005, according to conference presenter Amy Kurlander, marketing associate at New York-based sales consulting firm Rossman, Graham Associates. Kurlander was citing official U.S. Census Bureau statistics from 1999, which put the total U.S. population at 272.3 million. In light of this 2 percentage point increase, there is much potential for expanded profitability for all involved if effective marketing to that consumer can be executed, she said.
AHBAI executive director Geri Duncan Jones echoed this sentiment. "It is an opportunity for us to work together, develop better working relationships so that we can enhance the profitability for everyone in this industry." Key channel members, she said, include food, drug and mass retailers; distributors; and manufacturers.
This year's conference, which drew about 140 members to The Breakers, July 15 to 17, was themed "African-American Beauty Focus 2000: Partnering With Key Channel Members in the 21st Century."
The need for stronger retail relationships was felt by the lack of mass retail participation at this year's event. Several major chains failed to send representatives during an awards luncheon on the last day. When the award for "Retailer of the Year, Food" was presented in absentia to Albertson's, Boise, Idaho, representatives of Luster Products, Chicago, accepted it on behalf of the retailer. Additionally, representatives from Dollar General, Nashville, Tenn., awarded "Retailer of the Year, Mass Merchandise," were not on hand to accept the award in person.
Mass retailers, including supermarkets, are integral members of these twenty-first century partnerships, many said they believe. "We all know who [mass retailers, distributors] is not here," said conference emcee Michael Joshua, president of J.M. Products, Little Rock, Ark. "We've got to get them here."
Some said retailers across the three mass channels do not feel an urgency to focus on the conference or the category due to their reliance on distributors in managing the products. Many stressed, however, that direct manufacturer-retailer involvement is necessary for category awareness, promotion and, ultimately, greater profitability.
Pamela Anderson, HBC buyer/merchandiser for Meijer, Grand Rapids, Mich., proposed an example of how this might be achieved. A participant in a retailer/distributor panel along with Wal-Mart and Walgreen's, she said, "We need to raise an awareness level of the products that we have available. And we will do that by working with manufacturers to help us develop some real plans to get to the African-American consumer." She suggested co-promotions with manufacturers so that the manufacturer "can be really visible to that consumer through Meijer."
Calling for a different type of manufacturer/retailer discourse was panelist Marie Hughes, ethnic HBC buyer for Wal-Mart, Bentonville, Ark. She urged manufacturers to educate retail department managers on their products. "They need to know," she said. "The worst thing that we could do is have a consumer walk in a store and ask for grease and we send them to automotive. And it's happened."
Along with the projected percentage increase of the African-American population, buying power in the community has been ever-expanding. Under the current economic boom, according to Kurlander, the buying power number, currently at $550 billion, is expected to reach $600 billion by next year. That's an increase of nearly 100% since 1990 when the number was at $300 billion, according to Connie Curry, director of sales at J.M. Products.
"I can only begin to imagine the possibilities," said Wal-Mart's Hughes. "There is a tremendous opportunity still available to us in this category."
African-American buying power is not being driven up by population growth, according to Kurlander, as much as it is by African-Americans who are increasingly more educated and those in the populace with higher incomes. The middle class is the fastest-growing sub-segment of that communitysaid Kurlander.
Hispanics, who, in 1999, represented 11% of the total U.S. population, are expected to represent about 16% of the population in 2005, she said, a jump from 35 million to 51.2 million.
The Census Bureau has acknowledged that there is at least a 5% undercount of African-Americans, Hispanics and Asians, Kurlander said.