Nexos gives particular consideration to investment opportunities that offer products and services to the rapidly growing Hispanic market in the U.S. Below, recent data demonstrating the growth and trends of the U.S. Hispanic community is presented.
Total Population Growth: Growth vs. Rate – US Census 2010 – www.census.gov
US Hispanic Population Change: 2000-2010 – US Census 2010 – www.census.gov
The economic investment fundamentals of the Hispanic market are compelling:
- Hispanics currently comprise 16.9% of the U.S. population (2012 U.S. Census Quick Fact Estimate), numbering 53.1 million, and are growing four times faster than the total U.S. population due to high birth rates and continued immigration (having grown 49.5% over the 2000 Hispanic population base of 35.5 million).
- Hispanic estimated purchasing power is $1.2 trillion in 2012 according to the Selig Center for Economic Growth. In sheer dollar power, Hispanics’ economic clout will rise from $212 billion in 1990, to $489 billion in 2000, to $978 billion in 2009 and to $1.5 trillion in 2015. U.S. Hispanic buying power will grow faster than African-American buying power (54 percent), Native American buying power (65 percent) and Asian buying power (89 percent). Sources: U.S. Census Bureau, 2007 Survey of Business Owners: Hispanic-Owned Businesses (provides detailed information every five years);
- In addition to representing buying power equivalent to that of Spain, the U.S. Hispanic economy should also be viewed as an integral part of a broader consumer marketplace which includes Latin America and the Caribbean. This is particularly relevant in the food, media, telecom and financial service sectors.
- As a result of high regional concentration and high immigration flow, the U.S. Hispanic “nation” is not assimilating to the same extent as other immigrant populations, creating demand for businesses that serve this distinct market.
- Hispanic companies are growing at three times the rate of the national average.
Additional information on Hispanic Purchasing Power from the AHAA:
- Hispanic estimated purchasing power is $1.2 trillion in 2012 according to the Selig Center for Economic Growth. In sheer dollar power, Hispanics’ economic clout will rise from $212 billion in 1990, to $489 billion in 2000, to $978 billion in 2009 and to $1.5 trillion in 2015. U.S. Hispanic buying power will grow faster than African-American buying power (54 percent), Native American buying power (65 percent) and Asian buying power (89 percent).*
- Despite markedly lower average income levels, Hispanic households spent more on telephone services, men’s and boys’ clothing, children’s clothing, and footwear. Also, Hispanics spent a higher proportion of their money on food (groceries and restaurants), housing, utilities, and transportation.*
- Hispanics spent about the same as non-Hispanics on housekeeping supplies, furniture, appliances, women’s and girl’s clothing, and personal care products and services. Compared to non-Hispanics, they spent substantially less on alcoholic beverages, health care, entertainment, reading materials, education, tobacco products, cash contributions, and personal insurance and pensions.*
- The share of buying power controlled by Hispanic consumers will rise from 5 percent in 1990 to 6.8 percent in 2000 and to 9.1 percent in 2009, and the group’s share will rise in every state.
- The ten states with the largest Hispanic markets, in order, are California ($253 billion), Texas ($175 billion), Florida ($101 billion), New York ($76 billion), Illinois ($43 billion), New Jersey ($37 billion), Arizona ($31 billion), Colorado ($21 billion), New Mexico ($18 billion), and Georgia ($15 billion).
- In 2008, 25 percent of children younger than 5 years were Hispanic and Hispanics comprise 22 percent of all children younger than 18.
- Hispanics’ spending patterns already help to determine the success or failure of many youth-oriented products and services. According to the 2007 American Community Survey, 33.9 percent of the Hispanic population is under age 18 compared to 22.8 percent of the non-Hispanic population. Also, in 2007, only 5.5 percent of Hispanics were over 65, compared to 23.8 percent of the non-Hispanic population.
- U.S. Latinos accounted for 11%, or $2.2 billion, of total e-commerce purchases made across the United States in the first quarter of 2012. (Ad Age, Six Things Advertisers Need to Know About the Growing Hispanic Market).
- This segment contributed 34.8% of the growth in the Technology, Telecommunications and Entertainment industries according to our Ad Spend research.
- The Hispanic consumer is spending more dollars at retailers offering brand names with the fashion footwear styles they want. Hispanic women spent an estimated $3.3B on fashion footwear (June 2012 – May 2013), representing 18 percent of the total women’s fashion footwear market. (Source: NPD Group).
- U.S. Hispanics are more likely to purchase grocery foods, dairy, and bread from convenience stores (c-stores) than non-Hispanics, reports The NPD Group. Spanish-dominant Hispanics are more likely to make grocery item purchases at c-stores than other Hispanics.
Source: NPD Group’s 2013 C-Store Hispanic Shopper Report (Base sizes: Non-Hispanics: 2165, Hispanics: 1741).
Other trends seen in the U.S. Hispanic demographic:
- Mobile internet and smartphone usages surpasses other demographic groups.
- Use of social media sites higher than other demographic groups:
- Consumption of news in English has been increasing.
- Advertisers continue trend of directing advertising to the Hispanic community:
As a result of these and other related trends, Nexos views the opportunities in its major sectors of focus to be as follows:
- Consumer Goods — There is a wide spectrum of growth opportunities for companies targeting Hispanic consumers, ranging from repositioning non-Hispanic businesses to serve that group to expanding the product offering of Hispanic businesses to capture the “upmarket” demand from second generation Hispanics. Nexos has particular expertise in food, retailing, restaurant and distribution areas.
- Financial — Financial companies are expected to benefit from greater demand from Hispanics for greater bank account ownership, mortgage banking, credit/debit cards, investment products and insurance as the differential in savings by Hispanics versus the U.S. average narrows.
- Health Care — There are attractive growth opportunities for health care and insurance providers focused on both the existing underserved Hispanic market as well as the emerging, higher income Hispanic market. Research clearly indicates that Hispanics, regardless of language skills, have a strong preference for Spanish-speaking health care providers and community facilities.
- Media & Telecom — Advertising spending on Hispanic-targeted television, radio, print and online media are growing at levels in excess of 15%, and there are significant station ownership opportunities for Hispanics who have access to capital.