Profile of the U.S. Hispanic Consumer 2

Hispanic Purchasing PowerHispanic Purchasing Power Marketing to HispanicsMarketing to Hispanics

and and Growing Your Business Growing Your Business

Dennis Caicedo / Director Sales Research & Development Spanish Broadcasting System

IntroductionIntroduction

* Source: Terry College of Business / The Mulitcultural Economy ( 2002 )

The immense buying power of 39 mil l ion Hispanic consumers is energizing the U.S. consumer market as never before. This major group, which represents nearly 14% of the country’s population, has a disposable income of an estimated $580 bil l ion for 2002.

- “ Over a seventeen-year period, 1990-2007, the nation’s Hispanic buying power will grow at a compound annual rate of 8.7 %.

The comparable rate of growth for non-Hispanics is 4.8 %. In sheer

dollar power, Hispanic economic clout wil l r ise from 223 Bil l ion in 1990 to 926 Bil l ion in 2007…a 315 % increase over 1990

”

The nation’s fastest growing minority group is increasingly becoming the focus of corporations eager to develop

new markets for their products and services.

Reason and LogicReason and Logic

Estimates of Hispanic buying power in U.S metro areas and counties suggest that marketing to Hispanic consumers wil l contribute to the bottom l ine of most companies or enterprises.

Already, the Hispanic market is attracting greater attention from businesses large and small.

The explosion of Hispanic media— whether radio, television, magazines or on the Internet— reflects the increasing number of advertising dollars targeted towards U.S. Hispanics.

The OpportunityThe Opportunity

The buying power estimates presented here suggest that one ‘general advertisement’ or generic product geared for al l consumers increasingly misses many potentially profitable market opportunities.

As the consumer market becomes more diverse, advertising, products, and media must be tailored to each market segment.

The American PieThe American Pie

U.S. Population by U.S. Population by Race/EthnicityRace/Ethnicity

Source: U.S. Census Bureau, 2000La Agencia de Orcí & Asociados

US Hispanic Population Soars 74% US Hispanic Population Soars 74% Outpacing Rest of Outpacing Rest of

Population Population

Hispanics Asians

22.4 22.4

38.9 38.9 30

35.8 +74

%+19

%

287.9

248.7

Total

+16%

7.3 11.5

+58%

African Americans

1990 2002

1990

2002

( Millions ) ( Millions )

•Source: 1) US Census 2000

2) Terry College of Business / Buying Power at the Beginning of a New Century ( 2000 – 2001 )

In Just -5- Years the US Hispanic In Just -5- Years the US Hispanic Population Will Grow Another Population Will Grow Another 29%29%

Hispanics

38.9 38.9

50.2 50.2 248.9

255.9 +29% +2.8%

Total

( Millions ) ( Millions )

Non-Hispanic

1990

2000

306.2

287.9

+6.3%2002 2007

2002

2007

2002

2007

Source: Selig Center for Economic Growth, The University of Georgia 2002 - Buying Power)

1990

2007

Hispanics Asians

$7.6 Trillion

$4.3

Total

+77%

Billion$

African Americans

Hispanic Buying Power Grew Hispanic Buying Power Grew 160% Over the Past 12 years 160% Over the Past 12 years

Non-Hispanic Whites

$6.3 Trillion +62

%

$223 $223

$580 $580 +160%

$646 Billion

+110%

$118

+151%


$296 Billion

1990

2002

1990

2002

$3.9

$317

The Impact on Your BusinessThe Impact on Your Business

Hispanic vs. Non-Hispanic PopulationHispanic vs. Non-Hispanic Population and Buying Power Trends 1990 – 2002and Buying Power Trends 1990 – 2002

PopulationPopulation Buying PowerBuying Power (Mil l ions) (Bil l ions)

1990 2002 % Chg. 1990 2002 % Chg.

Hispanic 22,600 38,900 74% $ 223 $ 580 160%

Non-Hispanic 226,300 248,900 10.0% $ 4,054 $ 7,052 74%

U.S. Total 248,700 287,800 15.6% $ 4,277 $ 7,632

78%•Source: 1) US Census 2000

2) Terry College of Business / Buying Power at the Beginning of a New Century ( 2000 – 2001 )

Hispanics Asians

$9.9 Trillion

Total

+30%

African Americans

By 2007 Hispanic Buying Power By 2007 Hispanic Buying Power Is Expected To Grow Another Is Expected To Grow Another 60%60%

Non-Hispanic Whites

$7.9 Trillion

+25

%

$580

$926 +60

%$646

Billion

$853 Billion

+32

%

$296 Billion

$455 Billion

+54%


…and outpace that of All Non-Hispanics

$7

.6 T

rill

ion

$6

.3 T

rill

ion

2002

2007Billion$

In order, the 10 most Hispanic populated states are:

California, Texas, New York, Florida, Illinois, New Jersey, New Mexico, Colorado, Washington and Georgia.

In order, the 10 states…with the greatest Hispanic buying power: California, Texas, Florida, New York, Illinois, New Jersey

Arizona, Colorado, Georgia and New Mexico.

The five most Hispanic populated states account for

67% of Hispanic buying power in the U.S.

Where to LocateWhere to Locate Your Share? Your Share?

* Source: Terry College of Business / Buying Power at the Beginning of a New Century ( 2000 – 2001 )

Hispanics are Going NationalHispanics are Going NationalPercentage Growth per StatePercentage Growth per State

Source: U.S. Census Bureau, 2000

Cities with Highest Percent Cit ies with Highest Percent Composit ion of Hispanics Composit ion of Hispanics

TOP 5 14,863,300TOP 5 14,863,300

( 42% of U.S. Hispanic Pop. )( 42% of U.S. Hispanic Pop. )

Majority of U.S. Hispanics ResideMajority of U.S. Hispanics Reside in the Top 10 Hispanic Markets… in the Top 10 Hispanic Markets…

Market Hispanic Pop.

1) Los Angeles 6,599,500

2) New York 3,852,200

3) Miami 1,564,400

4) Chicago 1,498,600

5) Houston 1,348,600

Market Hispanic Pop.

6) San Fran 1,384,7007) Dallas 1,120,3508) S. Antonio 818,000

9) Phoenix 817,000

10) McAllen-Brownsville 786,700

TOP 10 19,789,350TOP 10 19,789,350

( 57% of U.S. Hispanic Pop. )( 57% of U.S. Hispanic Pop. )

Source: US Census 2000

Total Hispanic Non-Hisp. Black

Non-Hisp. Asian

Non-Hisp. White

36.636.6

26.626.630.8 32.5

38.8

Hispanics’ Median Age is Lowest in the Nation:

Hispanics are Younger and Represent Hispanics are Younger and Represent Growing Number of Consumer ProspectsGrowing Number of Consumer Prospects

Larger Households Mean Larger Households Mean More Consumer Prospects…More Consumer Prospects…

2.62.75

3.5

2.62

TotalTotal HispanicHispanic Non-Non-Hisp. Hisp. WhiteWhite

Non-Hisp. Non-Hisp. BlackBlack

Source: US Census Bureau, March 2000 CPS, Households Size 1967-1999)

Larger Hispanic Households –Higher Birth Rate and Extended Nuclear Family

Average No. People/Household

More Hispanic Children More Hispanic Children per Householdper Household

HispanicHispanic Non-Hispanic Non-Hispanic WhiteWhite

Non-Hisp. Non-Hisp. BlackBlack

Source: US Census Bureau 2000, Race – Age & Sex for the U.S.

Percent (%) Composit ion of Household Under 18 Years Old

35 %

22.6

%

32.5

%Market to young,growing and

inf luentialU.S. population

Hispanics Show Biggest Gain Hispanics Show Biggest Gain in College Graduates…in College Graduates…

Hispanics

2.84 6.07

+114%

Source: Census 2000, Educational Attainment

70.3

5

Total

+44

%

African Americans

101.

58

+29.6 %

5.74

+73%

9.89

1987

1997

Non-Hispanic Whites

( Mil l ions )

80.0

4

61.7

8 61

.78

Rising # of Hispanic OwnedRising # of Hispanic Owned Businesses and Revenue Growth Businesses and Revenue Growth

Hispanic Business African American Business

Number of Businesses

422,373

+184%1.2

Mil l ion

424,165

+94%

823,499

1987

1997

Sales and Receipts

(000)

$24.7 Bill ion

$186.3 Bill ion 3.5

X

higher

$71.2 Bil l ion

7.5

X

high

er

$19.8 Bill ion

Source: 1992 & 1997 Economic Census

13.7 Mil l ion

+52% 20.8 Mil l ion

$1,955 Bill ion

$18,553 Bil l ion

Hispanics African AmericansTotal

Total

9.3 X

higher

Average Spending for All Consumers and Hispanic Consumers

Share Share of Total of Total

Unit ($) ( % ) Unit ($) ( % )

TOTAL ANNUAL 38,045 100 32,735 100EXPENDI TURES

FOOD AT HOME 3,021 7.9 3,496 10.7FOOD AWAY FROM HOME 2,137 5.6 1,865 5.7ALCOHOLIC BEVERAGES 372 1.0 285 0.9HOUSI NG 12,319 32 10,850 33.1APPAREL & SERVICES 1,856 4.9 2,076 6.3TRANSPORTATI ON 7,417 19.5 6,719 20.5HEALTH CARE 2,066 5.4 1,243 3.8ENTERTAINMENT 1,863 4.9 1,186 3.6PERSONAL CARE PRODUCTS 564 1.5 564 1.7& SERVICESPERSONAL INSURANCE & PENSIONS 3,365 8.8 2,608 8.0MISCELLANEOUS 3,065 8.1 2,406 5.7

ALL Consumers Avg SpendingPer Consumer

Hispanic Consumers Avg SpendingPer Consumer

U.S. Average Annual Expenditures U.S. Average Annual Expenditures and Item Share - 2000and Item Share - 2000

Source: Shares calculated by the Selig Center, based on data from the Consumer Expenditure Survey, 2000.

SBS Markets – SBS Markets – Consumer Profi lesConsumer Profi les

L.AL.A N.YN.Y .. P.RicoP.Rico MiamiMiami ChicagoChicago S. S. AntonioAntonio

Average # 4.2 3.4 3.7 3 4 3.2 Persons / HH

Buying Power ($ Billions ) 66.8 39 31 39 12.8 11.5

Mean HH

Income

$51,

912

$48,

399

$27,

017

$57,

472

$52,

303

$37,

077

Source: Strategy Research Corp 2002

LA NY Miami Chicago SA

Whit e Collar Occupat ion 1,222 707 436 239 20437 35 46 32 48

Professional / Execut ive 495 284 179 96 81 Mangerial / Administ rat ive 15 14 19 13 19

Employed Full-Time ( 35+ Hr) 2,091 1,146 580 526 26964 57 61 70 63

Tw o or More Persons 1,847 979 563 408 223 Employed in Household 56 49 59 54 62

Self Employed / 432 184 136 69 39 Small Business Ow ner 13 9 14 9 9

Household I ncome 35K + 1,932 1,227 610 455 24259 61 64 60 57

(000) (%)

No. and % of Hispanics per Market No. and % of Hispanics per Market That Belong That Belong to Specif ied Group to Specif ied Group Below: Below:

Hispanic Persons 25-Hispanic Persons 25-6464

Scarborough: Release2 – Aug.‘01 – July ‘02 / SBS - U.S. Hispanic Markets


HHLD Has Home Mort gage 480 335 188 152 6415 17 20 20 15

HHLD Has Home Equit y Loan 122 97 57 65 224 5 6 8 5

HHLD Has Savings Account 1,692 1,157 535 446 30552 58 56 59 72

HHLD Has Check ing Account 1,741 1,205 701 409 29753 60 74 54 70

HHLD Has CD or MM Acct s 179 267 151 105 636 13 16 14 15

(000)

(%)





HHLD Has 401K or I RA 631 446 179 213 10219 22 19 28 24

HHLD Has Mut ual Funds 916 573 315 254 165St ocks or Securit y I nvest mt 28 29 33 34 39

HHLD Has Any I nvest ment 1,027 703 371 307 1,02731 35 31 41 31

HHLD Used Any Credit Card 2,020 1,302 743 438 107 Past - 3 - Mont hs 61 65 78 58 25

(000)

(%)




Summary & OutlookSummary & Outlook

Hispanic Consumer Buying Power will rise another 60% in the next five years – twice that of Non-Hispanic buying power.

Given the high growth rate of the Hispanic Market advertisers & marketers can not afford to miss the mark.

Due to both higher rates of natural increase and immigration, the Hispanic population is growing more rapidly than the total population, a trend that is not expected to change.

Census data indicates that the number of U.S. Hispanics earning more than $50,000 annually grew by over 128% between 1994 and 2000

Hispanic Buying Power in the next decade will be further enhanced due to the numbers of young Hispanics who are either entering the workforce for the first time or moving from entry-level jobs to the next step on their career ladders.

What Others Say…What Others Say…

“ Corporate America cannot continue to wait on investing in the Hispanic Market. The size of the Hispanic market has repeatedly caught Census forecasters by surprise. The corporations that have been successful in reaching the Hispanic market did not wait for the Census to develop mult icultural marketing strategies. They realize the Hispanic market’s full purchase-dollar potential and have seized the opportunity. ”

Carlos Santiago ( Santiago & Valdes )

Profile of the U.S. Hispanic Consumer 2

Documents

Transcript of Profile of the U.S. Hispanic Consumer 2