Hispanic shoppers are a natural market for natural products, but it's a market that industry manufacturers and retailers have largely ignored. Ethnic stereotypes, lack of awareness and concerns about additional costs for packaging and advertising are preventing companies from tapping a growing segment of consumers, experts say.
A Vertis Customer Focus Opinions 2007 survey released in October reported on factors that influence Hispanic shoppers in deciding whether to buy a food, health, beauty or cleaning product. It discovered:
- 53.5 percent said all-natural ingredients were the most influential information on the product label.
- 48.5 percent said information about the product being nontoxic was most influential.
- 45 percent cited safety guarantees such as U.S. Department of Agriculture-certified products or those that pass tests for certain contaminants.
- 32 percent said organic ingredients most influenced whether they would purchase a product.
"The desire for all-natural, nontoxic and/or organic products is equal across many demographics," says Scott Marden, director of marketing research for Baltimore-based Vertis Communications, which tracks shopper perceptions. "Approximately 68 percent of U.S. adults and 71 percent of Hispanic adults indicated they'd be more likely to purchase products with this type of information on the packaging, and the percentages rarely change significantly for various age, income and other demographics."
There were 43.2 million Hispanics in the U.S. in 2006, according to Census Bureau figures, and that number is expected to grow to 80 million by 2025. U.S. Hispanic purchasing power has skyrocketed to more than $700 billion and is projected to reach $1 trillion by 2010, according to HispanTelligence, the research arm of Hispanic Business Inc.
"The opportunity is huge," says John Corella, a founding partner of San Clemente, Calif.-based research and marketing firm Ventana Health, and chief marketing officer for the company's Zsweet sweetener. "But Hispanics are completely ignored by the natural products industry." The reason: The industry largely views Hispanics as uneducated, lower-income or as illegal immigrants, according to Corella and Sheldon Baker, senior partner with the Fresno, Calif.-based brand marketing firm Baker Dillon Group. "They feel it's not a viable market," Baker says.
But Hispanic shoppers, particularly those in middle- and upper-income brackets, already are sophisticated consumers of natural and organic products—as evidenced by the results of the Vertis survey on package labels. "With the Hispanic population growing at an amazing rate, opportunities to create and sell products to Hispanics are endless," Baker says.
First, though, the industry has to know how to reach its market. Spanish and bilingual packaging and promotional materials, advertising and features in specialty publications and broadcast media, and focused events are obvious strategies. "In addition to bilingual messaging … consider direct mail, TV, e-mail and newspapers for the Spanish-speaking Hispanic, with a gift-for-purchase offer when possible," says Vertis' Marden.
Corella argues that most promotional and educational material is "watered down or less" for the Hispanic market. Only 20 percent of packaging or other material might be in Spanish, for example, rather than all of it. Marketing material, educational brochures at information kiosks in stores and Web sites should be 100 percent Spanish or bilingual, he suggests. Baker points out, though, that even when bilingual or Spanish messaging is provided, companies often don't follow through. "Many manufacturers and even retailers do not have bilingual customer service reps who can respond to people either in the store or to incoming calls from Hispanic consumers," he says.
The natural products industry also has a marketing opportunity from a cultural perspective to offer products that cater to Hispanics. The vast majority of Hispanics are lactose intolerant, but "where's the soy food marketing?" Corella asks. Health seminars could focus on childhood obesity or diabetes, growing problems among the Hispanic population. "Hispanics would do anything for their children," Corella says. "Obesity is reaching epidemic proportions among Hispanic children—market to them."
Also, cooking demonstrations in grocery stores could bring in chefs from the Hispanic community to prepare authentic fajitas, for example. The natural remedies market is also untapped. Hispanic botanicas (herb shops) that provide natural herbs and supplements are "ancient," Corella says.
With competition coming from all sides these days, natural products companies are on the hunt for ways to grow and find new markets. The industry must start being less "myopic," Corella says. "People in this industry see themselves as enlightened: We're green. We're organic." But, he asks, "What about people?" Awareness should extend to all types of people—ethnic groups and minorities included.
Jane Hoback is a Denver-based writer and editor.
Natural Foods Merchandiser volume XXIX/number 1/p. 16,18