Salad Bowl Branding

Amid Market Concerns, Marketing Trends Tell A Larger Story

While news of the economic downturn is blazing the nation’s headlines the fact is, it’s only part of the current story. After all, the economy is not the only entity in America experiencing dramatic shifts.

With one-third of the U.S. population currently of minority status—a figure forecast to soar to half the population by 2050—a far larger story of change is occurring. And with sales of specialty foods rising 17 percent over the last two years (compared to only 4 percent of overall food growth), these long-term marketplace changes hold near-term implications for the specialty foods and beverages industry.

A look at many of the current trends tells the broader story—which includes opportunity, not just economic challenge:

• Purchasing power increases. Minority market segments are not only growing in size but in spending power—and that power is pegged to fervently rise by 30 percent, to $1.9 trillion, within only three years. These markets are essential to the overall economy, and a key driver within our own sector.

• The new “tastemakers” wield wide-ranging influence. With sales of specialty foods slated to grow by an astonishing 50 percent over the next decade, the real phenomenon is that 75% of sales generated for specialty foods are from mainstream customers, not the niche cultural segments originating the foods. Indeed, American palates are now influenced by an entirely new set of tastemakers.

• Home-based dining poised for growth. Consumers don’t stop eating during a downturn, but they do adjust where they have their meals. This is good news for food producers as home-based food preparation is undoubtedly poised for an upswing. Moreover, consumers will seek more variety in their home-based diets since they will not be frequenting specialty and ethnic restaurants at the rates of the past few years.

A Look Back Gives Future Insight

As history has proven time and again, the economy will turn back around--just as the stock market took some steps toward recovery this week. But as history has also taught us, the chance to gain a strong foothold into emerging markets is time-sensitive, too.

Opportunities with new markets of this magnitude—that are influencing the purchasing decisions of much larger markets—come and go quickly…which begs the ultimate question: In this economy, is your company’s growth strategy reactionary or truly visionary?

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U.S. Hispanic Market: a force to reckon with...and a boon to savvy marketers

An article from The Wall Street Journal (May 1st) titled Surge in U.S. Hispanic Population Driven by Births, Not Immigration, illuminates just how profoundly the U.S. demographic shifts that are currently taking place will forever change the nation -- and the breakneck speeds at which those changes are occurring.

The 45.5 million Hispanics currently in the U.S. are up from 35.7 million in 2000, with the growth among Hispanics responsible for half of the U.S. population gains between 2000 and 2007. While that increase is nothing short of astronomical, what is most surprising is how it's happened. According the article:

"Hispanics now account for more than 15% of the U.S. population, and their surge is largely the result of births among people already in the country--not immigration. In the 1990s, a flood of Hispanic immigrants explained most of the group's population rise. That has changed in recent years. Between 2006 and 2007, about 62% of the increase in Hispanics came from births."

Hispanic families tend to have more children, while white families are having less. But what is also increasing is Hispanics' purchasing power. As the article states:

"Growth in spending by Hispanics is likely to outstrip that of the general population in coming years. Hispanics control more disposable income than any other minority group. The figure stands at $860 billion a year and is expected to hit $1.3 trillion by 2012, according to Jeffrey Humphreys, who monitors Hispanic demographic and economic trends at the University of Georgia's Selig Center.

Between their numbers and disposable income, Hispanics are already a vital market for politicians and marketers. But these numbers point to how they'll only become more so. And while Hispanics are quickly redefining mainstream America, they're also fragmenting into many micro-niches (read more on micro-niches here) who seek products that align with their cultural heritage as well as the country they now call home.

That only leaves the door open for more innovations across many industries including television programs, music, fashion and, most notably, specialty foods. After all, our markets are changing, so too must our branding. Some reading that covers these new "tastemakers" that are influencing their growing market's preferences--as well as those of the mainstream--is located here. And a three-minute video by The Wall Street Journal on the Hispanic market's dramatic growth and its implications is located below (RSS and email subscribers, please click through to the blog to view).

If multiculturalism is mainstream...why is Hollywood behind the trend?

"I feel like Hollywood is a little behind the curve usually in terms of what America is ready to accept from a cultural standpoint," said Jon Hurwitz  [co-writer and co-director of the Harold and Kumar film franchise]. "Film-goers are a bit savvier than they are given credit for."

In an insightful take on the comedic sequel to "Harold and Kumar go to White Castle," the film that developed a strong cult-like following,  LA Times writer Mark Olsen begs an interesting question on whether cinematic media is ahead of the trends, or behind them.

In both films, the lead characters, who are Indian American and Korean American, have strong ethnic and cultural identities, which marks a departure for mainstream movies. But, what is more telling is how the characters perceive themselves--namely, as mainstream Americans.

And they should. Because they are. After all, America is not a melting pot of one unified culture but a rich "salad bowl" of many cultural segments.

"The theme in these movies is that Harold and Kumar are sort of beyond race," said Hayden Schlossberg [co-writer and co-director of the films]. "They don't really care that much about their own identities; it's the people around them that sort of haven't gotten it yet."

The culturally diverse market segments in America share a common bond through their set of values--like freedom, equality and prosperity--but are unique in their respective heritages. And with one in three Americans already of minority status and forecasts for those numbers set to explode, the fact is, our diverse cultures are no longer minorities...they are, in every sense of the word, mainstream Americans.

What's the key takeaway for film studios? Just as specialty foods are reflecting these cultural influences, so too should our media. It's not only a question of adequately reflecting our nation's demographic makeup...but serving its multi-cultural markets (markets who happen to be avid movie-goers). On the other hand, major television networks have been making some smart casting choices as of late to more adequately reflect diversity. Shows like Lost, Grey's Anatomy and House feature Asian, African-American and Indian actors in lead roles--to much acclaim, loyal audiences and high ratings.

According to Kal Penn, the actor who plays Kumar, "It's probably too soon to say, but hopefully you're seeing a shift where the real America is actually being reflected in all its diversity. I find it really refreshing and more interesting to watch when things are more fleshed out."

We couldn't agree more. If Hollywood needs more assurance that audiences will embrace diversity, they need only look at the growth of the specialty foods industry (17%) compared to overall food sales (4%). The growth rates of multicultural markets, coupled with the surging demand for more specialty foods and the high ratings of TV shows featuring culturally diverse casts make it all too clear: promoting diversity--be it through movies or consumer packaged goods--is a profitable venture for the savvy companies who are reflecting and building upon today's trends in their offerings.

America's Multiculturals: new market, new opportunities

An April 6th article in the New York Times illuminates the growth--and growing prominence--of America's multicultural markets (Americans that are of two or more races). While marketers have long demographically segmented according to one location, one age range and one set of race, that is quickly having to change.

Because our markets are changing.

According to the article: "Of the seven million Americans--approximately 3% of the population--who identified themselves as mixed-race in the 2000 census (the first in which it was possible to do so), nearly half were under the age of 18. Almost 5 percent of Californians now identify themselves as mixed-race; by comparison, fewer than 7 percent are African-American."

As the author points out, "Because we are trying to raise our daughter as bi-cultural, much in our family is up for grabs, from the food we eat — and what we say before and after eating it."

This is an exemplary opportunity for marketers to develop offerings that speak to the various heritages that these consumers identify with, as they certainly don't identify with just one (as previously assumed). There is already a solid trend afoot in fusion foods--the blending of flavors and ideas from different cultures and ethnicities to develop brand new dishes (e.g. Taco Pizza, Mango Green Tea), even new food categories (e.g. Tex-Mex, Pan-Asian).

The possibilities in serving these new markets? Between the levels of choice and authenticity that today's consumers are demanding, the innovations are near endless. Moreover, as foods that are of rooted in the histories of one culture continue to migrate to the palates of other cultures, and into the mainstream (see previous posts on that phenomenon here and here), the profit potential provides a solid business case for more experimentation. Not less.

That said, the first step will be for marketers to better understand these marketers and how to effectively market to them. Hitting home this point, Monique Tapie, communications director for Global Advertising Strategies, explained in a July 2007 Washington Post article, "Multicultural Marketing 101 does not understand such nuances, just as it does not understand the animus of many middle-class and upper-income blacks against advertising campaigns that seem to portray all black people as hip-hop artists or sports figures. It seems to think that all Asians are from Japan, China or Korea, and all Spanish-speaking people are from Mexico, and all Mexicans are alike.

Ethnic marketing is not a matter of cynically exploiting racial, ethnic, class or other differences for profit, it's simply a recognition that differences exist, that America is composed of many cultures and that if you plan to sell to those cultures, you'd better try to do a better job of understanding them."

Also, very much worth watching is this terrific video segment on today's multicultural youth, and how they're working to understand and communicate their rich and varied identities. Let's make it our job to listen to them--and leverage these opportunities to better serve them.

After all, today's dynamic changes in America's demographics are unprecedented and those specialty foods companies that ignore the demands of these rich and varied audiences will do so at the price of market share for many years ahead.