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Art exhibitions at prestigious galleries and museums sponsored by Lexus, (on home page) and professional tennis tournaments featuring the sport's biggest names such as 2008 Wimbledon champion Rafael Nadal, (above) are some of the innovative ways marketers are seeking out this emerging Latino demo.
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Affluent in Spanish
From tennis to tequila, Latinos are going upscale.
July 14, 2008
By Della de Lafuente
NEW YORK Perhaps nothing symbolizes the rise of the affluent Latino consumer more than the ascent of high-end tequila. Overall, the category grew 10 percent in 2007 to 7.9 million cases, according to Impact, New York. And the growth is being driven in party by high-end entries like Jose Cuervo's silver Platino, which retails for around $58 for a 750 ml bottle. "There's a whole segment of [affluent] Hispanics who are getting back to their roots, and not just drinking cognac, whiskey or scotch, but tequila," said Rene Valdez, brand manager for Casa Herradura, an upscale tequila that's now being distributed in the U.S. via Brown-Foreman, Louisville.
Of course, Latinos aren't the only ones drinking tequila, but a burgeoning segment of affluent Latinos are buying lots of new things and marketers are responding. "Latinos buy more than beer and toilet paper," said Tom Maney, svp-ad sales for Fox Sports en Español. Maney should know. This year, the cable network has seen Volvo, among other luxe brands, buy time to try to reach the net's viewers, which include Latinos who boast an annual income of $60,000 or more.
The fact that such a segment exists should be of no surprise to anyone who follows demographics. There are now 44 million U.S. Hispanics—now 15 percent of the American populace—with an estimated spending power of $1.2 trillion. What's more, nearly 4 million of those Hispanics have annual incomes of $75,000 and above, per the U.S Census.
Not surprisingly, marketers are looking beyond soccer and telenovelas to reach the demo. Art exhibitions at prestigious galleries and museums sponsored by Lexus, professional tennis tournaments featuring the sport's biggest names, exclusive tastings at The Palm of high-end Casa Herradura tequilas, private cocktail receptions for rich Hispanics who are customers of Chase and invitation-only dinners where Heineken USA's premium Mexican beer Bohemia gets an upscale blessing from celebrity chef Rick Bayless are among the increasingly innovative and strategic ways that marketers and even TV programmers are going under the radar and into exclusive eateries, clubs and other high-end venues to seek out this emerging segment.
Said Maney: "The marketplace has really grown to respect this consumer and the advertisers within it. More and more marketers are segmenting their dollars to talk to these consumers, who like their fellow Latinos in the wider Hispanic marketplace represent a diverse ethnic group."
"There are some Hispanics who have been affluent for multiple generations, whether it's Cubans who arrived here in the 1950s and 1960s, or the South Texas Hispanic landowners and industrialists who have been here since the turn of the [20th] century and who say 'the border crossed us,'" said Manuel Delgado, CEO, Agua Marketing, Houston.
For Herradura (Spanish for "horseshoe") that means appealing to Latinos' sense of tradition and cultural heritage. The company has partnered with The Palm restaurants nationwide to showcase the blue agave flavorings of its tequila brands, which are paired with a customized four-course menu.
The dinners, which run through September, coincide with the launch in June of the brand's first U.S. marketing push in print since Brown-Forman became the brand's importer a year ago. Ad placements are mostly in glossy general interest city titles such as Los Angeles.
Herradura also sought to raise its U.S. profile in May as the first tequila sponsor of the Kentucky Derby, and the brand's signature cocktails—martinis, not just margaritas—became a popular beverage alternative to the ubiquitous mint julep.
"You won't find anything mass market about our brand because of the high-level of quality that we want to communicate," Valdez said. "Everything that we do is intimate—and very targeted."
Lexus, meanwhile, is looking to drive more sales by capitalizing on the success of a local effort aimed at Miami car dealers to align the luxury car with wealthy Hispanics who embrace art and culture (Hispanic Marketing Report, March 3, 2008). Lexus created a national marketing program with a widened commitment by the brand to put Latin American art at the center of its outreach program.
"We identified a gaping hole in the world of automotive luxury that no brand had yet claimed: cultural and intellectual wealth," said Laura Semple, vp/strategic planning director, Conill Advertising, Los Angeles. "Not only has this approach uniquely defined the luxury territory for Lexus, it has broadened the entire category."
The "cultural and intellectual wealth" Conill set out to claim for Lexus was divided into two distinct luxury tribes: "Blue blood Latinos," usually first generation Latinos and South Americans who eschew flash or extravangance while looking to Europe and royalty for trends; and "Bourgeois Latinos," typically first and second generation Latinos who flaunt their wealth, power and looks while embracing celebrity trends rather than heritage to maintain the hip image they desire, per Conill.
Conill commissioned Latin American artists Catalina Estrada (her work appears on the home page), Manuel Losada and Raymond Saá to create their view of perfection as it relates to the Lexus tag, "The pursuit of perfection," resulting in print ad placements in affluent Hispanic-targeted glossies such as National Geographic en Español and Alma.
"Latinos saw the Lexus surrounded by beautifully worked Latino progressive art, which showed that only Lexus appreciates and celebrates Latino cultural wealth," Semple said. "It showed that as a brand 'We look for perfection in all the details.'"
Lexus also has cemented its position as art impresario by signing on as a key sponsor of the Museum of Latin American Art in Long Beach, Calif., serving as the exclusive sponsor of a museum gallery that will play host to major events and exhibitions aimed at Hispanic art aficionados and promoting Latin American art, Conill said.
Heineken USA took a targeted approach when choosing to mount an exclusive event dinner last October for potential clients and consumers who appreciate fine dining called "Unexpected Mexico" to showcase its premium Mexican beer Bohemia.
The brand teamed up with award-winning chef Rick Bayless, the Chicago-based cookbook author, restaurateur and the host of the PBS cooking show "Mexico -- One Plate at a Time" as well as top Mexican chefs Patricia Quintana, known as Mexico's Julia Child, and Monica Patiño, considered an innovator of nuevo Mexico cuisine, to serve up a menu of authentic Mexican cuisine that pairs well with the rich flavors of Bohemia. The cerveza serves as a chief sponsor of Bayless' TV program, which highlights the best of authentic Mexican cuisine.
"We wanted to make this bold statement to show the best of Mexico and to convey that there's more about the country than just nachos, chimichangas and Mariachis," said Carlos Boughton, brand director, Heineken USA. "Our goal was to challenge the expectations of what Mexico is all about."
Guests at the gourmet event included a select list of the influential and the influencers, affluent Hispanics, top restaurant groups, Mexican dignitaries and foodies including natural foods chef Bethenny Frankel, of the Bravo TV reality series "Real Housewives of New York," who arrived at the event with the show's cameras in tow, Boughton said. (The Bohemia event later appeared in an episode of the Bravo series.)
The event was also a chance for beer enthusiasts to enjoy the brand while listening to the sounds of Mexican songstress Eugenia León and viewing 25 pieces of art brought in for the event from the vast Latin American collection of Femsa Cerveza, Bohemia's Monterrey, Mexico-based brewer.
"It was a very targeted communication from almost a personal level and it was our way of saying, 'Let us show you what this brand is all about,'" Boughton said. "In a weird way, the vibe was almost like a rock concert, except that instead of music, we were serving food."
At Chase, the banking institution is going after affluent Hispanic consumers as part of a wider general market push for these customers, said Rebeca Vargas, svp, director of multicultural segments at Chase.
The financial institution reaches out to three different affluent Latino groups: Those who are more acculturated and typically do their banking business in English; Spanish-dominant affluents; and Hispanic customers who live in Mexico or in Latin America and do their banking, own homes or have investments, bank accounts and credit cards in dollars, said Vargas. "Ninety percent of the bankers who take care of these customers are bilingual, from Mexico or of Latino origin, and they serve these customers predominantly in Spanish" she added.
To cater to affluent Latinos who prefer to do business in Spanish, Chase is working with the home lenders to create loan documents in Spanish; hiring more loan officers who can serve people in their preferred languge; partnering with Latino brokers; and generating marketing materials in Spanish, Vargas said.
Chase reaches out to affluent customers via TV advertising such as the recently launched Hispanic campaign that includes a television spot focusing on mobile banking; through direct mail, sending offers to a targeted group of Latino consumers aimed at account activation, new accounts; and through intimate, invitation-only events.
Though exclusive in nature, the events usually center around the bank's financial analysts and bankers, who assist affluent customers who may have questions about their finances, investments or may be looking or already has a mortgage.
"It's not us going to them to talk about the benefits of having a bank account," Vargas said. "It's much more about the service and the guidance with one-on-one conversations that may begin as a cocktail reception. It's about the banker who relates to the customer's needs and who relates culturally to the customer and who speaks the customer's language and understands why the customer may be interested in having an account in dollars and why the customer gets incomes from different sources."
While affluent Hispanics only represent about 1 percent of the population now, many believe that such U.S.-born Hispanics who are second- and third-generation, educated with high incomes and bicultural/bilingual, are the future.
"For the first time, the majority of us who were born in this country have to look at the next generation of Hispanics, that is, today's Latino youth, to get a preview of what this group is going to be like when they get older," said Christy Haubegger, a brand manager who consults on the Hispanic market at Creative Artists Agency, Los Angeles.
Though many marketers are likely to benefit from a wave of affluent Hispanics, some are being more proactive than others.
The Association of Tennis Professionals, for instance, is looking to address the fact that although many tennis pros are Hispanic, few fans are. Among the ATP's roster, 17 of the world's top 100 ranked players have Latino backgrounds with five pros among the top 25. And the 2008 Men's Singles' Wimbledon champion Rafael Nadal is from Spain. He defeated five-time consecutive Wimbledon champion, Roger Federer, to win his first Wimbledon title and fifth Grand Slam championship.
During the 2007 U.S. Open in New York City, the ATP held a joint event with ESPN Deportes for tennis enthusiasts to showcase Latino players, many of them rising stars in the sport.
Said Davina Aryeh, the ATP's senior brand manager, Latin America and U.S. Hispanic market: "It's about reaching Hispanics who have certain likes and interests in a very targeted fashion that's often subtle and a very soft sell, but exclusive to what they are about and what they appreciate."
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