The growing Hispanic population has become the focus of beverage marketers appealing to minorities

America is traditionally known as a melting pot due to the multicultural population. As the “minority” population is soon set to outpace that of the “majority” population, beverage marketers are turning their attention to the groups whose buying power, family size and acculturation rates are rising.

“There is no single most important group; it really depends on the product,” says David W. Stewart, professor of marketing at the University of Southern California and co-author of the book “Marketing Champions.” “Some products have specific appeal to particular ethnic groups while others have broad markets that cut across ethnic groups.”

The term “ethnic marketing” does not intrinsically include or exclude any group, but with 58 percent growth from 1990 to 2000, and continually increasing, the burgeoning Hispanic population steals the focus from other groups. With minimal percentages allotted for ethnic marketing, the emerging Hispanic population and its increasing buying power has attracted companies from energy drink startups to multi-million-dollar breweries.

“I think what is happening now is the growth rate is expanding in ethnic groups, the most from Hispanic,” says Staci Covkin, executive vice president of Hispanic trends in the United States for Information Resources Inc., Chicago. “By 2020 there is projected 45 percent growth for Hispanics and Asians, while African Americans have a 21 percent growth. Savvy retailers and manufacturers are paying more attention to these growing consumer segments.”

The statistics keep going, according to Roberto Ruiz, managing director of accounts for Hispanic advertising agency, La Agencia de Orci & Asociados. The Hispanic median age is 25 years old vs. the general population’s 35 years old. Current global Hispanic buying power is $763 billion, which is expected to reach $1 trillion in 10 years. More than 90 percent of Hispanics still speak Spanish at home. And the United States is now the second-largest Spanish-speaking country in the world, after Mexico.

“Hispanic is the fastest-growing segment today and for the future,” Covkin explains. “Right now the majority of the numbers are from those migrating to the United States and over the next few years the numbers will increase from Hispanics born in the United States, and the Hispanic birth rate is twice that of the general population. No matter how you cut it, what the spending is now vs. the potential is huge.”

With the growing population, companies are now conducting surveys and studies to begin to understand the shopping habits of the Hispanic consumer. The parent company of Lipton, Unilever, Englewood, N.J., recently released the results of its survey on Hispanic shopping habits. Its “Winning the Hispanic Shopping Trip” offers many insights for retailers looking to attract the Hispanic shopper, who tends to be female and responds to Spanish-language signage, circulars and specials, according to Unilever’s data.

The results of IRI’s extensive survey of Hispanic shopping habits and preferences on new products and flavors give an important glimpse into the category. The study found refrigerated juice/beverages, bottled water and beer/ale are growing significantly faster among Hispanics than the general population. Carbonated soft drinks, aseptic juices and sports drinks also show an increased purchase rate. It also revealed a preference for fruit flavors including lemon-lime, tropical fruits and other flavors reflective of Hispanic consumers’ native countries.

The country of origin is of particular importance as Hispanics in the United States can come from one of 20 different countries, all with different cultures and habits. As Ruiz of La Agencia de Orci & Asociados points out, Latin products overall have a sweeter taste, but the similarities end there.

“There is a propensity for colored colas and Goya nectars from a Latin market perspective, but it’s not homogenous,” Ruiz explains. “In some countries they prefer aguas frescas to nectars, it depends on the cultures of origin. Typically, aguas frescas are consumed freshly made. Beverages have to address the country of origin. If you’re from the Caribbean, you’re going to prefer nectars, if you’re from Mexico or Latin America, it’s aguas frescas.”

ACNielsen, Schaumburg, Ill., published the results of its Hispanic shopping study in the Consumer Insight publication. Authors Kylee Hall and Chris Hammer set out five simple rules for understanding Hispanic purchasing behavior such as “learn about the consumer” and “verify results to justify investment.” The results of “The Hispanic Consumer’s Shopping List” research also indicated preferences for berries, lemon, lime, orange and berry/lime flavor combinations.

“Carbonated beverages have traditionally been a strong category among Hispanic consumers, with several brands leading the charge,” Hall says. “Now we are seeing some growth in non-cola, fruit-flavored beverages as well as sports and energy drinks.”

Energy drinks have a strong showing among Hispanics. So much so that some companies are targeting the group, such as Caballo Negro energy drink by California’s Distribuidores De La Energia. According to Stewart, Hispanic respondents are more likely than Caucasians to participate in the energy drinks category, by a margin of 22 percent to 9 percent.

The IRI study, in addition to one by Quepasa Corp., a Scottsdale, Ariz.-based Hispanic and Latino online community, shows that Hispanics tend to be more brand loyal than the general population. The Quepasa survey showed that Hispanic consumers had a preference for Red Bull over Vault in drinks, by an 82 percent to 18 percent margin.

“Hispanics also tend to be more brand loyal,” IRI’s Covkin says. “They are more loyal to certain names and the brand name is more important to them. PepsiCo has taken advantage of this while skewing to the general public with its Frito Lay tortilla chips.”

This could be because, as Ruiz points out, “a brand is a brand across different segments.” He says it’s important to pinpoint what is Hispanic within the brand or category and market from that standpoint. At the same time, Quepasa’s Chairman and Chief Executive Officer Robert Stearns cautions that Hispanics do not want to be stereotyped.

The mainstream acceptance of Hispanic-inspired flavors can be seen in other categories, such as Häagen-Dasz’s Dulce de Leche (translated it means milk candy, a caramel-esque flavor) ice cream or the fact that salsa is selling more than ketchup, Ruiz points out. Beverages are following along the same path.

Miller, Coors and Beck’s have all launched integrated Hispanic marketing campaigns. And Chicago’s Tampico Beverages has always been popular among Hispanics and continues to extend an influence. The traditional juice company recently launched a line of flavored waters with a decidedly Latin twist. The water varieties include Piña Colada, Mamey-Mango and Grapefruit-Tangerine.

Tampico also completed its largest sponsorship in company history for a Hispanic non-profit, PADRES Contra El Cáncer, whose spokeswoman is “Desperate Housewives’” Eva Longoria. The company sponsored the Dream of Hope Sweepstakes and El Sueño de Esperanza Gala, which was held on the set of the hit television show, for the organization committed to improving the quality of life for Latino children with cancer and their families.

“In addition to being the No. 1 brand of refrigerated fruit juice in the United States among all consumers, [Tampico] has the highest frequency of use in non-alcohol, non-carbonated beverages among Hispanics,” Stewart reports.

With statistics demonstrating impressive growth in the Hispanic population for the next few years, this is a group that companies cannot afford to ignore. Recommend-ations for manufacturers and retailers are plentiful. IRI’s Covkin suggests retailers include Spanish signage or private label products to increase shopping trips by Hispanics.

“I think the ones that will be successful are the ones that focus in with specific marketing,” Covkin says. “Novartis has done it with a line of Gerber baby products with Spanish language packaging. Hispanic campaigns with focused efforts will be successful, and with the growth rate of the population, you can’t ignore it.”

Yet current habits may change as the population grows. During the next 10 years, the majority of growth will come from second-generation, not immigration, Ruiz says. The advertising executive points out that the habits of the U.S.-born second generation may differ from their immigrant parents.

“What makes Hispanics Hispanic will become more important,” he says. “Taste will be a bigger factor and language will be less relevant, which will be tougher for marketers to understand. Language is a shallow variable, understanding taste preferences and how things are done will be more important. The competition also will increase as companies from Latin America will come to the U.S.”

It’s clear that ethnic marketing may be an option for now and a necessity in the future.