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Food Firms Need to Target Growing Latino Market : Marketing: At a recent convention, food manufacturers learned a valuable lesson--to avoid decreasing sales, advertise more in the Latino market.

March 01, 1990|DANIEL P. PUZO | TIMES STAFF WRITER

PALM SPRINGS — Food manufacturers gathered here heard a clear message: Either devote more of their marketing/promotional efforts on the Latino market or risk losing sales to this "emerging majority."

Many of the nation's leading processors came away from the sixth annual Mexican American Grocers Assn. convention impressed with the demographics that underscore the Latino community's rapidly increasing spending power, particularly in California.

"Love it or hate it, but get used to it. America will not become more German or Irish or Italian (in the coming years) but it will become more Hispanic," Steve Soto, president of the Los Angeles-based group, told the 450 in attendance.

Certainly, the most compelling presentation came from David E. Hayes-Bautista, a UCLA School of Medicine professor. His research indicates that by the year 2030 Latinos will represent 46.1% of all American children, Hayes-Bautista said.

Further, in that year, what are now considered minority groups--Latinos, Asians and Blacks--will constitute a majority of the United States' population, he said. The change is a result of several factors including a declining birth rate among Anglos, particularly in comparison to the other racial and ethnic groups.

"The key issue is, 'How to do business in (such a) multicultural society,' " Hayes-Bautista said. "Are there endless problems with this brown wave? No. There are endless opportunities. . . . The engines of this economy will depend in the future on the participation of Latinos."

Hayes-Bautista estimates that at present Latinos constitute 23.2% of California's population, a figure that will rise to 35.8% by 2030.

Since the first Mexican-American Grocers conference in 1984, however, there has been a great deal of activity among household products manufacturers to reach out to Latinos.

Several major corporations made presentations that described their efforts in this community, which also includes a concentration of Puerto Ricans in the New York metropolitan area as well as Cubans in South Florida.

"Today, Proctor & Gamble has (commercials for) 30 of our brands on the air in Spanish, mostly on (Spanish-language) television networks, every single day," said Robert L. Jordan, with the Cincinnati-based firm. "We will continue to provide innovating marketing programs in addition to these advertisements (in the Latino community). And these efforts continue nationwide 365 days a year."

Other major firms, such as the Miller Brewing Co. and Pepsico also previewed substantial advertising campaigns that target Latinos.

Another producer, Foster Farms of Livingston, Calif., described its recently launched comprehensive sales promotion in Los Angeles' Latino neighborhoods. The effort, called the Fiesta Wagon, was the company's first directed at this community.

The program involved a multimedia advertising campaign, cooking demonstrations and sampling at numerous stores, coupon distribution and a recipe contest.

The objective was to develop brand-loyalty and a high-quality image for the firm's fresh poultry among Latinos.

"We received very significant results after only a few promotions. Our sales in the target areas rose 50%," said Stan Kowalczyk, a Foster Farms sales manager. "We plan on going back to this program and will fine tune it in the coming years."

Manufacturers are not the only segment of the food chain keeping close watch on the Latino community. The supermarket chains have also intensified their efforts in these neighborhoods.

"We have 100 stores with strong Hispanic influences and 40 of these have Hispanic populations (in the immediate area) of 40% and above," said Dick Fredericksen, a senior vice president for Lucky Stores. "We will maintain stores in the Hispanic community because we realize the strength of those areas."

Another chain with a strong presence in Latino neighborhoods is Vons Companies Inc. In fact, the firm has developed a store format, called Tianguis, that specifically targets Latinos.

"We realized that we were in deep trouble unless we spent resources on the Hispanic market," said Ed Marrujo of Vons.

There are now five Tianguis stores among the Vons chain with plans to open another three. The company also has about 30 traditional Vons stores in neighborhoods with Latino populations of 30% or more.

Successful or popular elements of the Tianguis format are often incorporated to the other stores with sizable numbers of Latino customers, he said.

Marrujo challenged other retailers and manufacturers to enter the Latino market.

"Those that do get involved in the Hispanic market should make a full commitment," he said. "(In addition to advertising) these efforts such include training, educational and drug abuse programs for the community as well."

The corporate interest in the Latino consumer was also evidenced by the Mexican American Grocers' announcement that it was opening offices in New York and Chicago in 1991. This expansion will be followed by offices in Miami and Texas sometime in the following year, according to Soto.

"Our future," he said, "is bright."

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