Affluent in Spanish

July 14, 2008
By Della de Lafuente

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 Espanol. 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."

For instance, in addition to The Palm tastings, Herradura (Spanish for "horseshoe") 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. 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."

Conill commissioned Latin American artists Catalina Estrada, Manuel Losada and Raymond Saa 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 Espanol and Alma.

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.

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 Wimbledon champion Rafael Nadal is from Spain.

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."

Source: AdWeek