The ability of manufacturers to develop promotions aimed directly at Hispanic consumers is being hindered by a lack of reliable sales information on what those consumers are actually buying — due in part to a reluctance by some Hispanic retailers to share sales information with syndicated measurement companies.
That was one of the issues raised Wednesday by Isabel Valdes, chairperson of The Center for Multicultural Science, Manhattan Beach, Calif., during a presentation at Sabor Latino, a Hispanic-oriented trade show.
According to Valdes, “Multicultural consumer purchasing data is often incomplete or inaccurate, posing a major challenge for corporations to develop effective business and marketing strategies and to measure the true contribution of the U.S. Hispanic market to their ROI.
“That data gap is driven partly by the fact most U.S. Hispanic syndicated retail data undercounts an estimated 20% to 60% of purchases made by Hispanic consumers, depending on the category.”
Although most observers put the purchasing power of Hispanics in the U.S. at an estimated $1.2 trillion, the actual numbers for the segment’s true purchasing power are not known, Valdes said, because only about half that figure is accounted for by real data, with no reliable information on how the other $600 billion is actually being spent.
The data in the study — which CMS said was based on a 2012 survey by the National Grocers Association — examined the economic contribution of Hispanics among independent operators with annual sales between $2 million and $5 billion, Valdes noted, which excludes smaller operators and those reluctant to share their information, she added.
“But future research is needed to estimate the full value of the U.S. independent retail grocery channel to help retailers and suppliers [gain] additional market intelligence to devise strategies to effectively target multicultural consumers, drive ROI, track sales and win with the Hispanic customer for life,” she said.
In an interview following the formal presentation of the study, Dr. Jake Beniflah, executive director of the center, told SN that CPG companies might be willing to invest more promotional dollars to attract Hispanic business if they knew how much Hispanic consumers are actually spending on their products.
“But there’s not always scanner data available because some independent retailers have chosen not to share their sales numbers with syndicated measurement research companies, or else smaller mom-and-pop stores are too small to invest in scanner technology, so there are data gaps that are problematic for corporations.
“However, if leading brand manufacturers had that data available, they might feel free to invest more in the Hispanic community. They are aware in a general sense that Hispanics tend to over-index in spending on certain categories, but they don’t have reliable figures on how much of their products are being purchased by Hispanic consumers.
“The situation is very impactful now, when 52 million Hispanics in the U.S. represent 17% of the population, but it will become even more impactful by 2050, when Hispanics are expected to represent 133 million, or 25% of the population.”
Data cited by the Center for Multicultural Science included the following:
• The Hispanic contribution to sales within the independent retail sector is $22.9 billion, or 17.4% of all purchases.
• The states with the highest Hispanic populations are, in descending order, California, Texas, New York, Arizona, Florida, Illinois and New Jersey — and represent more than 36 million people who generated approximately $16.7 billion, or 73% of total national annual Hispanic sales.
• The cities with the largest Hispanic populations are Los Angeles, Houston, Dallas, New York, Phoenix, San Diego, Fort Worth, Chicago, San Jose, Sacramento, Fresno, San Antonio, Modesto, Miami, Denver, Brownsville, McAllen, San Francisco, Visalia and Washington D.C., generating Hispanic sales of approximately $2.2 billion.
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