CPGmatters (July 2006)

How CPGs Can Help Grocers 
Step Up Hispanic Initiatives

By Terry Soto

CPG companies have been investing heavily in Hispanic market intelligence. Also, supermarket retailers have come a long way in their quest to attract and retain Hispanic shoppers. Unfortunately, many of the retail efforts have been hit and miss.

The resources retailers need to make intelligent decisions and implement targeted Hispanic programs are available from CPG companies for the asking. However, little progress can be made unless a retailer’s corporate culture is supportive and receptive to aligning with Hispanic market needs and until a retailer’s infrastructure can support the required alignment across its operations – from corporate to the store.

A couple of years ago, I led a food retail consulting project which resulted in a report entitled Grow with America: Best Practices in Ethnic Marketing and Merchandising. I interviewed the top ten CPG companies with the most progressive and aggressive Hispanic programs, as well as several Hispanic food and beverage manufacturers. Subsequently, I also interviewed and visited over 40 chains and independent retailers across the country.

With the manufacturer interviews, I wanted to:

Based on extensive research investment in the Hispanic market, CPG manufacturers have the market insight to create integrated Hispanic “pull” programs that have proved very successful in driving volume when implemented correctly at retail. These research tools include sizable Quantitative and Qualitative primary Hispanic market research studies, syndicated Hispanic market research by notable companies such as Simmons, Yankelovich and Scarborough, sales measurement tools by industry standards, AC Nielsen and IRI, and geo-marketing tools such as Hispanic IQ from Spectra and Geoscape.

Yet, while these resources and resulting retail programs represent tremendous upside opportunities for retailers wanting to attract Hispanics to their stores, obtaining retail support for these programs is not always strong.

We learned from manufacturers, trade associations, publication editors, and others close to the industry that retailers are challenged on several fronts when attempting to target Hispanics, including:

CPG companies wanting to gain support for their programs will need to take a step back and create partnerships at the top and establish an ear for taking an objective and methodical look at the Hispanic market opportunity long before bringing Hispanic programs to the table.

By helping retailers take a more strategic approach to their Hispanic business, CPG companies will help retailers:

That is the only way that CPG companies can help retailers realize what it takes to implement solid Hispanic programs, help them see the advantages of the partnerships and the programs they bring to the table, and ultimately help retailers achieve a more competitive position among a consumer group that has increasing food shopping choices.

The bottom line: CPG companies need to step in and help retailers start taking a strategic and holistic approach to targeting Hispanics. Otherwise, piecemeal efforts by either vendor or retailers will continue to produce piecemeal and suboptimal results.

Terry Soto is a strategy consultant and author of “Marketing to Hispanics – A Strategic Approach to Assessing and Planning Your Initiative.” She can be reached at terry@aboutmarketingsolutions.com.