Everyone Wants To Own The Booming Hispanic Consumer Market. Procter & Gamble Can Offer Some Lessons

Excerpted from TIME Magazine - January 24, 2005

Companies trying to reach America's expanding Hispanic population should listen to Julieta Parilla and her family. Parilla, who emigrated from Guadalajara, Mexico, with her relatives eight years ago, is preaching about Pampers. Sitting on a four-poster living-room bed in the cramped apartment she shares with her baby daughter, mother, sister, brother-in-law and five nieces and nephews in Norwalk, Calif., a predominantly Hispanic working-class suburb of Los Angeles, she waxes eloquent about the diaper brand's absorption abilities and its "softer cloth." At a baby shower before her 6-month-old daughter Fatima was born, a friend gave Parilla a competing diaper as a gift. She regrets ignoring her sister's advice to stay away from other brands. Those other diapers, she says, caused her daughter to break out in a rash.

Although the endorsement by her sister and prenatal nurses turned Parilla on to Pampers, a few marketing tactics from Procter & Gamble, Pampers' $51 billion parent company, have helped the 21-year-old single mother stay loyal to the brand. Parilla recalls a Pampers television ad she liked, broadcast in both English and Spanish, showing a smiling baby crawling in the diapers.

With such clever tactics, Procter & Gamble has hooked Parilla and a whole lot of other Hispanic Americans. The Hispanic population is growing faster than any other group in the U.S., and its buying power is soaring too. By most accounts, P&G is leading the pack in the race to grab its business. P&G spent $107 million on Spanish-media advertising in the first nine months of 2004, tops in the U.S.

Companies like P&G can't afford to ignore the Hispanic market anymore. The U.S. Hispanic population has grown 85%, to 41.3 million, since 1990, compared with only 18% for the overall population, according to the Selig Center for Economic Growth at the University of Georgia. U.S. Hispanic buying power has more than tripled in the past 15 years, to $686 billion, whereas total U.S. buying power has grown at less than half that rate. The Selig Center projects that Hispanic buying power will grow an additional 45%, to $992 billion, by the end of the decade; and the U.S. Census Bureau says the Hispanic population will triple, to 102.5 million, by 2050, when Hispanics will make up nearly 25% of the U.S. population. (The group now has a 14% population share.)

Still, nearly half the top 250 U.S. advertisers are spending less than 1% of their ad budgets in Hispanic media. And some companies just get it wrong. According to a TransPerfect Translations survey, 57% of people who speak Spanish--and English as a second language--say they've seen Spanish advertising that is incorrectly translated from English. In one case, point was translated as puta, which means prostitute in Spanish, instead of punta. "Our market is maturing," says López Negrete. "But it's never too late--we're still waiting for an invitation from many brands." Given the sheer potential of this segment, companies will come to the party. The question remains: Who will turn it into a bottom-line fiesta?

—Sean Gregory with reporting by Anna Macias Aguayo, Cathy Booth Thomas, and Sandra Marquez

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