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How do you say "Success" in Spanish?

What it takes to succeed in Hispanic Marketing today

The general market is dead... welcome the New America! – The general market has disappeared. In its place are multiple sub-Americas that coexist, nurture and benefit from each other. It's now perfectly right (not to mention delicious) to eat teriyaki chicken wrapped in a flour tortilla. Don't be trapped and limited by stereotypes. Expand your perceptions, be more creative and pan-cultural in your thinking… and grow your business.

Today's Latina is savvier than you may think she is – Research shows that there are now millions of Latinas in the U.S. working in professional, white collar, managerial and business owner/proprietor positions. They have a high usage of the internet, cell phones, iPods, social media, etc. Modern Latinas outnumber those in stay-at-home, blue collar or service jobs and represent prime targets for marketers smart enough to pursue them.

Warm up your brand to the Hispanic market – The United States remains the land of opportunity for millions of foreign-born. Hard-working, ambitious people from around the world who risked leaving what they know to build better lives here. Insightful marketers will recognize that they're selling much more than physical merchandise and services to these people. They're also offering hope, building dreams, providing personal validation… and facilitating a better tomorrow.

It's not only about Español – 56% of Hispanics are either English dominant or perfectly bilingual. Yet, English advertising is 77% less persuasive to Hispanics. Whether you communicate in Spanish or English, marketers need to hone in on the cultural nuances to create that desired connection where Hispanic consumers feel "they really get me."

Anita Santiago Advertising

Why Food Companies Are Going Loco Over Hispanic Marketing

With so many Americans already eating too much (23% more calories per capita than in 1970) and overwhelmed with too many choices (thousands of new products are introduced every year), you have to wonder where food and restaurant companies are going to find new growth in the U.S. The answer is simple: Hispanics.

The Hispanic marketing firm Latinum Network reports that between 2005 and 2008, food, beverage and restaurant sales from non-Hispanic consumers declined by $17.7 billion, or 2.4%, while sales from Hispanics rose by $14.8 billion, or 18%. This means that while other groups are busy cutting back in their food spending, Hispanics are spending more. A lot more. And well above and beyond the pure population growth for Hispanics, which is between 3% and 4% a year.

Why else, after all, would Pepsi (PEP) care whether or not Hispanics fill out their Census forms? Its Yo Somo online campaign, which includes a chance to be in a documentary by actress Eva Longoria Parker (apparently in her directorial debut), asks Hispanics to stand up and be counted. The hidden message: Get your numbers up, so we can sell you more Tostitos and Mountain Dew.

Of course, Hispanic marketing is nothing new, but it's becoming increasingly central to food companies' agendas. As Latinum Network points out, Hispanics are the only growth market for many key food, beverage and restaurant categories. For instance, according to the firm, cracker sales declined overall between 2005 and 2008, but rose 12% among Hispanics. Same with candy and gum — non-Hispanics consumed 1.7% less and Hispanics 8.2% more.

Consider products like Kraft Singles and Kool-Aid. While some eaters have shunned these aged brands as unhealthy and not remotely natural, Kraft (KFT) has decided that its messages about how Singles are made with wholesome milk, not oil and water, would resonate best with Latina moms, who are focused on what Chris McGrath, senior director of Latina cohorts for Kraft Foods, calls "food quality and value." McGrath says the campaign was very successful.

None of this is likely to be music to the ears to anti-obesity advocates, who are trying to get Hispanics, especially children, to eat less, not more. Both blacks and Hispanics already have a significantly higher incidence of obesity than whites. Nobody like to talk about this, but the uncomfortable truth is that if food companies are going to thrive in the US, either prices are going to need to be higher (unlikely scenario) or somebody's going to have to eat more.

Image by Flckr user El Gran Dee

General-Market Shops Snatching Up Hispanic Business

Recent Moves by Home Depot, Wendy's Causing Concern Among Specialty Agencies

NEW YORK (AdAge.com) -- After years of trying to convince the mainstream world of the size and importance of the Hispanic market, Hispanic agencies are finding that one group has started to listen: general-market shops. Pressured by cost-cutting clients, general-market agencies are taking on Hispanic shops for a bigger share of the fast-growing Latino market.

With 2010 Census data likely to show big growth in the Hispanic population, the fight is likely to intensify as general-market agencies poach talent and specialty shops protect their turf.

The ad industry was stunned earlier this month when Home Depot moved its $37 million Hispanic account from incumbent Vidal Partnership to Richards/Lerma, a little-known Hispanic capability at Home Depot's general-market agency, Richards Group.

Separately, Unilever is doing a pitch to consolidate its Hispanic business that doesn't rule out participation by general-market agencies. "The business should go to whoever pitches it best," said Tatiana Hansell, senior brand manager-multicultural at Unilever.

Since then, Wendy's has started a review of its Hispanic business that requires contenders to forward their information to Wendy's general-market agency, Kaplan Thaler Group, according to a critical statement issued by the Association of Hispanic Advertising Agencies about both reviews.

In a reference to the Wendy's review, Joe Zubi, chief operating officer of Zubi Advertising, wrote in the agency's ZubiNation blog: "One RFP was actually sent to us by the person who heads up the account at the general-market agency. The first question was to describe how well we get along with general-market agencies. If that does not send a clear message that the Hispanic shop will follow the footsteps of Big Brother, I don't know what does. Not to mention that Big Brother can then figure out how best to approach the market and tell the client that they can do it just as well for less money ... does the name Home Depot ring a bell?"

Pitch to 'band together'

Javier Palomarez, president-CEO of the Hispanic Chamber of Commerce, said he dispatched a letter April 14 to the CEO of Home Depot "voicing our disappointment and surprise," and sent copies to the Hispanic Chamber's 210 chapters across the country.

"As a community we have not done a good enough job of banding together," said Mr. Palomarez, who in the past headed multicultural marketing for Bank of America and early in his career developed Allstate's first Hispanic advertising. He said the chamber represents about 3 million companies generating more than $4 billion in revenue, with about 21% coming from businesses that work in fields such as construction, renovation and landscaping and are "great customers of Home Depot."

Although Home Depot represents the biggest Hispanic account to go to the least-known agency, other general-market agencies are gaining traction.

Havas Worldwide is hiring a top Hispanic creative director, Vidal Partnership's Mauricio Galvan, and Leo Olper, chief operating officer of Hispanic shop Lapiz, to build a Hispanic agency to serve Euro RSCG Worldwide and Arnold clients, replacing the moribund Euro RSCG Latino.

DraftFCB has assembled about 55 multicultural specialists at the agency's 1,100-person Chicago office, said Simon El Hage, senior VP-multicultural segments. Integrated in the general-market account teams, they work on multicultural business for the agency's general-market clients such as State Farm, Kmart and Taco Bell, whose Latino account it just stole from Hispanic shop Dieste. DraftFCB has even joined the Association of Hispanic Advertising Agencies as an associate member.

"Multicultural audiences are the pop-culture creators," said Ken Muench, who joined DraftFCB in December 2009 as senior VP-director of multicultural planning from leading Hispanic agency Grupo Gallegos. "You can't be a credible general-market agency without considering the multicultural segment."

One of the biggest changes shaping the market is the trend toward what many are calling the total market -- a melding of the general market and the growing multicultural market, partly due to the increasing numbers and influence of Hispanic and black consumers.

"Mainstream culture today is not the general market," Mr. Muench said. "It's a multicultural-inspired total market."

The Mexicanal Network taps into L.A. market

Flipping channels hoping to find highlights of the Mexican rodeo? Want to spend a Sunday evening watching a movie from the golden era of Mexican cinema? Look no further.

The Mexicanal Network made its Los Angeles debut early last month on KBEH (digital channel 24.1/virtual channel 63.3), an MTV Tr3s affiliate that reaches roughly 700,000 Latino households in the Los Angeles television market.

It's part of the network's continued distribution expansion in California, which also includes San Diego (K5OLL) and Palm Springs (KMIR), as well as additional cable distribution with Comcast in San Francisco.

"L.A. is, needless to say, the most important Hispanic market in the United States," said Mexicanal President Luis Torres-Bohl. "It took us a while to get here, but good things take a while."

Mexicanal, a joint venture of Castalia Communications and Cablecom, is a 24-hour Spanish-language channel targeting Mexicans living in the U.S. Launched in 2005, it reaches nearly 5 million Latino homes with a blend of multi-platform distribution through DirecTV, Comcast systems in several markets and digital multicasting.

Using the tagline "Tu Canal Regional," the network's content includes news, sports and culturally significant programs from throughout Mexico, including, Jalisco, Aguascalientes, Oaxaca and other regions that represent the hometowns of the majority of U.S.-based Mexican immigrants. In the last two years, it has introduced kids series, cooking shows and music content into its programming lineup.

"What makes this channel unique is it brings backs a historical and cultural connection to all those Mexicans — recent migrants and second generations — living here," Torres-Bohl said. "It's very important to know where you come from so you can get to where you're going."

As for where he hopes the network is going, Torres-Bohl said the goal is to expand to other heavily Latino markets, including New York and Florida, where the network is not yet available through cable or multicast.

— Yvonne Villarreal

Home Depot Moves $37M US Hispanic Account to Richards/Lerma

NEW YORK (AdAge.com) -- Home Depot is moving its $37 million U.S. Hispanic account to Richards/Lerma, a little-known Hispanic capability fielded by Home Depot's general market shop Richards Group, from incumbent Vidal Partnership. The account shift, a stunning upset for Hispanic ad agencies in general, is the clearest example yet of general market agencies' growing attempts to persuade cost-conscious clients to consolidate their Hispanic accounts with their general market agency. 

Read the full story: http://adage.com/hispanic/article?article_id=142969  --Laurel Wentz 

Beer: Heineken grabs Dos Equis maker Femsa for $5.5B

AMSTERDAM — Dutch brewer Heineken said Monday that it will buy the beer-making operations of Mexico's Femsa in an all-stock deal that values the maker of Dos Equis, Tecate and Sol beers at $5.5 billion, excluding debt.

The deal increases Heineken's presence in growth markets and cements its position as the world's second-largest brewer by sales behind Anheuser-Busch InBev. It also continues a decade-long trend toward concentration among the biggest players in the global beer market.

Femsa Cerveza brands have a 43% market share in Mexico and a 9% share in Brazil — two of the world's top four most profitable beer markets, and both are still fast-growing. Femsa's Tecate and Dos Equis brands are also significant players in the U.S. beer market, where Heineken vies with Grupo Modelo's Corona.

"This is a really good deal for Heineken, for our position in the Americas," said Heineken Chief Executive Officer Jean-Francois van Boxmeer on a conference call. "As a worldwide brewer this was a (region) where we perhaps were weaker."

Femsa Cerveza had sales of euro2.6 billion ($3.7 billion) and operating profit of euro618 million ($885 million) in 2008, Heineken said. Including debt that Heineken will assume, the deal is worth $7.6 billion (euro5.3 billion).

Analysts welcomed the buy as a pleasant surprise, given that many had expected SABMiller— now the world's third-largest brewer by sales — to win the race for Femsa.

Analyst Kris Kippers of Petercam Bank praised the deal as a "a great acquisition for Heineken" because Femsa was one of the few remaining large independent brewers in growth markets — and Heineken didn't overpay. Heineken now has 40% of its operations in developing markets, up from 32%.

Heineken shares rose 6% to euro34.25 in Amsterdam, while SABMiller shares fell 1.9% to 1,803 pence in London. Heineken is based in Amsterdam.

Femsa — formally Fomento Economico Mexicano S.A.B. de CV — is one of Mexico's largest conglomerates, bottling Coca Cola and operating the Oxxo convenience store chain throughout much of Latin America, among other activities. It is based in Monterrey, Mexico.

The acquisition is Heineken's second major buy in the past two years, as it bought Scottish & Newcastle operations worth euro10.2 billion ($14.6 billion) in May 2008 to become the largest brewer in Britain and Europe.

In the same year, Belgium's InBev bought Anheuser-Busch for $52 billion, while South African Breweries bought Miller for $3.6 billion in 2002.

"In the context of the reconfiguration of the global brewing landscape, scale and geographic diversification are more important than ever," Femsa CEO Jose Antonio Fernandez Carbajal said Monday.

"This transaction responds to that imperative."

Heineken said it expects the deal to close in the second quarter, pending approval from regulators and shareholders.

Under the deal, Femsa will take a 12.5% stake in Heineken and a 14.9% stake in its parent, Heineken Holding.

Those shares are valued at $5.5 billion, and Heineken is assuming Femsa debt and pension obligations of $2.1 billion.

Heineken's unusual holding structure allows descendants of the Heineken family to control the brewer, and the company said Monday that they have agreed to the deal. A trust holding 39% of Femsa shares has also agreed, Heineken said.

Heineken forecasts cost savings from combining the companies' operations will amount to euro150 million per year by 2013. It said the acquisition will begin adding to Heineken's per-share earnings "after two years."

Analyst Kippers estimated the combined company is currently valued at 12 times its 2010 earnings, compared with an industry average of around 15 times.

He said by paying in shares, Heineken had not damaged its balance sheet at a time of economic uncertainty. He upgraded his rating on the shares to "Buy" from "Add."

Heineken was the best-selling imported beer in the U.S. for years before being surpassed by Corona Extra — owned by Femsa's larger Mexican rival, Grupo Modelo — in the late 1990s.

The top two brands still account for more than 40% of the U.S. import market. Modelo Especial is in third place and Femsa's Tecate in fourth. Corona Light, Dos Equis and Heineken Light are also among the top 10 imported brands, according to trade magazine Beer Marketer's Insights.

Femsa is the second-largest brewer behind Modelo in Mexico, where it also sells Carta Blanca and Indio. Together Femsa and Modelo have an estimated 98% market share.

In Brazil, Femsa sells Kaiser, Bavaria Clasica and Xingu in addition to brands previously mentioned.

By Toby Sterling, AP Business Writer

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Pepsi eyes emerging markets, healthy fare

NEW YORK, March 22 (Reuters) - PepsiCo Inc (PEP.N) laid out its priorities for growth on Monday, including plans to invest heavily in emerging markets and healthier products in addition to folding in its North American bottling operations.

Chief Executive Indra Nooyi detailed her vision at the start of a two-day investor meeting at New York's Yankee Stadium, where the maker of Pepsi-Cola, Frito-Lay snacks and Gatorade also affirmed its growth forecasts.

The company still expects earnings per share to rise by 11 to 13 percent this year, excluding the impact from currency. It is still targeting low double-digit growth for 2011 and 2012.

Nooyi said a key priority is to restore its North American beverage business to sustainable profitable growth starting in 2010, after "an incredibly difficult year for us" in 2009.

PepsiCo is integrating its two largest bottlers, which it acquired last month in a $7.8 billion bid for more control of its North American distribution system. Rival Coca-Cola Co (KO.N) plans to do a similar deal with its top bottler.

EMERGING MARKETS, NEW PRODUCTS

Regarding higher-growth emerging markets, such as China, India, Russia and Brazil, Nooyi said Pepsi plans to invest aggressively in markets where the company can achieve leadership or parity with rivals such as Coca-Cola, whose international business is broader than Pepsi's.

On a worldwide level, Nooyi said PepsiCo is targeting mid-single-digit revenue growth and mid-to-high single-digit operating profit growth in its beverage business.

Nooyi said Pepsi plans to build and expand its snack business, especially products that are healthier. PepsiCo expects its "nutrition business," which includes Quaker Oats, Tropicana juice, nuts and seeds, to reach $30 billion in sales by 2020, up from about $10 billion now.

Executives said growth in its overall snack business would be fueled by expanding core brands, such as by offering whole-grain and blue corn Tostitos corn chips, as well as moving into adjacent categories like dips and salsas.

Nooyi also said PepsiCo would invest in "breakthrough" drinks, develop new zero-calorie beverages and step up innovation in the area of natural sweeteners.

At the meeting, Pepsi unveiled new Gatorade drinks, including some made with a low-calorie natural sweetener and a new salt product that can reduce sodium in potato chips without changing their taste.

Aside from its regular "G Series" Gatorade drink, Pepsi is launching "G Series Pro" targeted at professional athletes. It will be sold at General Nutrition Center (GNC) stores and other specialty sporting goods stores, said PepsiCo, which also unveiled a "G2 Natural" Gatorade drink for sale at Whole Foods Market Inc (WFMI.O) stores.

John Compton, head of PepsiCo's Americas Foods business, said PepsiCo was working on bundling snacks and soft drinks that go well together, such as spicy Doritos and lime-flavored Pepsi, to help boost sales and streamline delivery.

Pepsi also unveiled targets to cut levels of salt, sugar and saturated fats in its top-selling products. [ID:nN21136811]

DEALS AND ALLIANCES

Looking ahead, Nooyi said there would be more room for tuck-in acquisitions and alliances, especially when it comes to cutting costs or expanding abroad.

She said a deal with Anheuser-Busch InBev (ABI.BR) to combine back-office and information technology functions was just "the tip of the iceberg." Future alliances could even involve sharing intelligence between "like-minded" consumer packaged goods makers, she said, since companies that make cosmetics, food and beverages often do similar research.

"What you eat is how you look," Nooyi said.

When asked if PepsiCo planned to spin off the bottling operations in a few years, like many analysts believe Coke will do, Nooyi stressed that PepsiCo is "an operating company at the core," since it already sells and distributes its snacks products. Coca-Cola, on the other had, sells beverage syrup to franchised bottlers.

"We are not in the business of holding assets temporarily," Nooyi said. "But nobody should ever say never."

PepsiCo shares closed down 0.4 percent at $66.31 on the New York Stock Exchange. (Additional reporting by Nivedita Bhattacharjee in Bangalore, editing by Michele Gershberg, Gerald E. McCormick, Matthew Lewis and Bernard Orr).

Marketers ignore growing Hispanic population, survey says

Marketers ignore growing Hispanic population, survey says

10 Mar 2010

The 2010 U.S. Census is expected to find that Hispanics number more than 50 million in this country, and they command $1 trillion in buying power. Yet 50 percent of U.S. advertisers, who acknowledge the cultural impact of Latinos, do not include Hispanics in their marketing efforts. 

That's the key finding of a new Hispanic marketing trends survey of senior marketers at Fortune 1000 companies, commissioned by Los Angeles-based Hispanic advertising agency Orci. The survey, conducted via e-mail in February of 2010, was designed to offer a broad and deep look at advertisers' strategy, spending plans and viewpoints of the U.S. Hispanic market. Respondents included senior marketing and advertising executives of B2B, consumer, small, medium and large Fortune 1000 businesses across the country.

 

Latinos comprise more than 15 percent of the U.S. population, and are predicted to rise to 50 million in the 2010 Census, an increase of 42 percent since the last Census in 2000. In the 2000 report, the Hispanic growth rate of 24.3 percent was more than three times the growth rate of the total U.S. population (6.1 percent).

 

Yet the Orci research showed that 51 percent of respondents do no marketing to Latino consumers. And, 82 percent have no plans to begin or increase existing efforts aimed at American Hispanics in the next 12 months. This despite the fact that the great majority of respondents – more than 8 out of 10 – agreed that Latinos will impact U.S. companies' product and service offerings in the next five years, particularly in food tastes, fashion and technology.

 

The survey also found that 78 percent of respondents do not use social media to engage Latinos despite the fact that Hispanics are the heaviest users of wireless access through mobile phones and laptops than any other ethnic group. In addition, close to 80 percent of Latinos engage in some kind of online socializing. 

The news comes on the heels of the Latinum Network's early 2010 report that Hispanic spending grew more than twice as fast as the general populations' from 2005 to 2008. Latinum Network is a business network devoted exclusively to helping corporations penetrate the U.S. Hispanic market.

Vivendi Acquires Rights to Televisa Content - will release all of Televisa’s content among the U.S. market.

Vivendi Entertainment has acquired U.S. distribution rights to Televisa Home Entertainment's new DVD releases. Under the multiyear deal, Vivendi will release at least 15 titles annually.

Mexico's Televisa, the world's No. 1 Spanish-language media company, is best known for its popular television programming. Their original programming, which airs on Univision, includes highly rated telenovelas such as "Destilando Amor," "La Fea Mas Bella" and "Rubí" as well as such Mexican comedy icons as El Chavo del Ocho and El Chapulín Colorado, from their eponymous TV shows.

"Televisa is the premier brand within the Latino community, and they are a perfect complement to our anchor brands in other categories," said Yolanda Macias, EVP of acquisitions and business development for Vivendi. "The relationship and influence they have with their consumer is unparalleled."

Vivendi already distributes Code Black, National Geographic, Salient, Shout! Factory and The Weinstein Co., among others.

A few Televisa titles already have rolled out under Vivendi. Upcoming titles include the telenovelas  Mañana Es Para Siempre, with Lucero, Silvia Navarro and Fernando Colunga; and Sortilegio, with William Levy and Jacqueline Bracamontes. Dates and prices have not yet been announced.

While this is Vivendi's first exclusive agreement with Televisa, it is not the first time the companies have worked together.

In 2004 Vivendi picked up distribution for Xenon Pictures, who brought along Televisa titles. Xenon has long held the distribution rights to the coveted Televisa titles since August 2002, when Grupo Televisa partnered with Xenon to develop and distribute its domestic video brand, Televisa Home Entertainment.

Between 2004 and 2008, Vivendi and Xenon launched the telenovela category in the DVD marketplace and helped create special sections for the genre at retail with such popular titles as  Rebelde and Amor Real.

"Televisa Home Entertainment is proud to partner with Vivendi Entertainment, who has confirmed year after year their leadership in the Hispanic market, thanks to the strong support and professionalism they put in every title," said Maca Rotter, executive director of Televisa Consumer Products. "From now on THE and Vivendi Entertainment will release all of Televisa's content among the U.S. market."

Lionsgate most recently distributed Televisa titles. In March 2008 the rights to Xenon's products, including Televisa titles, went to mini-major Lionsgate. Xenon will continue to distribute Televisa's catalog titles through Lionsgate, under the "Televisa Classics" line. As Xenon's rights expire, the titles will revert back to Televisa, and Vivendi.