IRI: Investing in Hispanic outreach to pay significant dividends
CHICAGO — IRI on Wednesday released a new “Point of View: Winning with the Hispanic Consumer Today" study to help CPG marketers connect with this diverse, rapidly expanding customer group. According to IRI, the U.S. Hispanic market's purchasing power will total $1.3 trillion by 2015. IRI analysis found that a $1 billion CPG company can earn an extra $71 million in revenue annually by investing more effectively in the Hispanic consumer.
Today, Hispanics account for one in six Americans, or 53 million people. Hispanic families consume more media and are more responsive to media than the general population. Additionally, 70% of Hispanics are under age 40, making investment in this group a wise long-term proposition.
"Hispanics are a powerful, growing group, and marketers who make special efforts to satisfy these consumers will certainly reap many rewards," stated Joy Joseph, principal and practice leader, Global Analytics and Consulting, IRI. "Highly targeted, well-executed Hispanic campaigns grounded in a thorough understanding of the Hispanic shopper can directly stimulate revenue increases and market share growth. In fact, our analysis of 10 CPG product portfolios shows that more aggressive spending on Hispanic campaigns can yield outsized results."
IRI recommends that CPG companies start with a “total market” strategy when approaching the Hispanic segment. There are many definitions of total market being discussed in the industry today, but Latinum Network, a multicultural research and strategy firm with more than 85 active Fortune 1,000 clients, defines a total market company as having three key traits:
Upstream integrated planning: total market companies make cultural segments a required input to strategic and financial plans well before a single campaign brief is written;
Multiculturally led insights: total market companies make cultural consumers at least equal partners in the insights generation process, with oversampling of Hispanic, African-American and Asian segments, and look for transcending multicultural insights to drive to Total Market ideas; and
Integrated execution: multicultural talent both inside and outside the total market organization is given the opportunity to perform “traditional” work, and vice versa; the best talent and the best ideas win, from creative to media to distribution.
Given these key traits, it is perhaps not surprising that total market companies spend more on multicultural segments — these segments are made a part of the strategy from the outset.
This new point of view is IRI’s most recent strategy piece related to the Hispanic market. In July, the company hosted a webinar also titled, "Winning with the Hispanic Consumer Today," hosted by IRI’s Joseph and Andy Hasselwander, VP Latinum Network.