Embracing Multiculturalism

The American melting pot consists of many ingredients. It's what gives our nation depth, character and diversity. With so many different kinds of people, how do retailers and CPG manufacturers reach multicultural audiences?

Population growth and economic forces tell a powerful story. According to a study conducted by the University of Georgia Selig Center, the buying power of American minorities is growing exponentially. In 2014, African Americans, Asians and Native Americans had a collective buying power of $2 trillion, 117 percent higher than in 2000. The number of ethnic Americans also is growing much faster than the general population and will represent a majority by 2050.

Despite these facts, some retailers and manufacturers continue to use a homogeneous approach based on general product development and marketing messages.

But according to Mark Singleton, vice president of sales and marketing for Rudolph Foods, some retailers have been urgently trying to understand multicultural shoppers to better market to their specific demands.

"Recent reports have aimed to grasp who, exactly, this multicultural shopper is and what it is they crave from their grocery shopping experience," Singleton says. "Many retailers have tentatively taken special considerations regarding this group. Research outlining desired brands, promotions, shopping times of day and the aisles they visit most inside the store, has guided the decision-making process. However, the potential to use insensitive and even inaccurate messaging has held many retailers back from reaching this demographic to their fullest potential."

Jolorie Williams, vice president of marketing at Revlon Professional, says more CPG manufacturers and retailers are learning about multicultural shoppers' needs.

"Retailers are recognizing the buying power and the uniqueness of the African-American consumer, for instance, and are going beyond just Black History Month to a year-round focus to ensure they are inclusive in all forms of media regardless of the category," Williams says.

A key element in thriving ethnic brands that all retailers and manufacturers need to embrace is authenticity.

"Those brands loved by the multicultural consumer have one thing in common: that is the authenticity in their messaging."

–Mark Singleton, Rudolf Foods

"Those brands loved by the multicultural consumer have one thing in common: that is the authenticity in their messaging," Singleton says. "Establishing false relationships based on disingenuous marketing will help neither the manufacturer nor the retailer in reaching their ultimate goal of driving consumers in store to purchase products."


So how can suppliers develop products for various segments of the U.S. ethnic market? Simply by truly understanding and talking to the consumer.

"Retailers need to understand and engage with consumers," Williams says. "The multicultural, African-American consumer from seven years ago has changed, they have evolved, and retailers need to get to know who they are."

Indeed, as Juan Lezama, director of Mosaico, a multicultural communications agency based in San Francisco, explains, some U.S. food companies that are successful in Mexico are looking to capitalize on that success and actively market those products to U.S. Hispanics.

"This is very smart, because over 75 percent of the Hispanic market in the U.S. is Mexican," Lezama says. "Despite living in the U.S. for many years, Mexican consumers still hold strong preferences for Mexican products and flavors that are popular in Mexico."

As such, more U.S. companies are creating products with flavors popular in consumers' home countries. For instance, General Mills has developed dulce de leche flavors for Cheerios and other products. Dulce de leche (caramel), a Latin-American confection prepared by slowly heating sweetened milk, also is popular among Asian and Philippine consumers.

Lezama stresses that retailers also face challenges in selecting ethnic products, because many ethnic products also appeal to general market consumers.

"In the recent recession, surprisingly many Latino retailers actually grew," Lezama says. "This is because Latino supermarket retailers tend to have lower prices than their mainstream competitors. This appealed to non-Latino consumers who visited these stores in search of lower prices. As these mainstream consumers visit these stores, they are becoming exposed to traditionally Latino flavors and products. Retailers should look for products that have wide appeal–those products that have traditional Latino flavor profiles that also appeal to the general market consumer."

Singleton says that shared sales data and local demographic information, as well as a brief summary of the retailer's growth in their segment of the industry, can help to answer suppliers' questions: "Such data as that found from point cards, and the insights derived from knowing which products your consumers purchase alongside your own, is invaluable in choosing a prime retailer."

Shopular's chief marketer and retail strategy expert, Lee Senderov, says there is no magic formula for general market versus multicultural market success.

"All people are 'ethnic'; this is a key lesson. Remember, categorizing terms like 'Latino' and 'Asian' cover many different ethnicities and are not always homogeneous."

–Lee Senderov, Shopular

"Meeting multicultural consumers' needs is the sole focus, not distinguishing them from the mainstream," Senderov says. "All people are 'ethnic'; this is a key lesson. Remember, categorizing terms like 'Latino' and 'Asian' cover many different ethnicities and are not always homogeneous." That being said, finding common insights across a broad social group is a good place to start.

To understand a local ethnic group, Senderov recommends retailers walk the aisles of the local competition.

"Smart merchants will look for a way in to grab the attention of the shopper," Senderov says. "While this avenue may not necessarily be the most cost-effective way to merchandise one particular product or offering, it creates a connection and an additional touch point with the shopper–one that can then introduce them to a broader array of potential relevant product offerings."

The matchup between retailer and ethnic brands is important. "Both the retailer and the brand need to be like-minded when it comes to the message they want to send to the consumer," Singleton says. "Considering each retailer's key demographic and location help to build lasting relationships, establishing a strong vision of the brand in the eyes of the consumer while building brand loyalty."

Lezama and his team at Mosaico are currently seeing more general market suppliers who are looking to expand their products to Latino consumers. "Conversely, we are seeing many traditional Latino brands that are looking to do a 'crossover' to market their products to general market consumers," Lezama says. "A smart way of doing this is for these suppliers to first try to reach the U.S.-born Latino millennial. These consumers grew up in a bicultural world and have the power to introduce their friends to traditional Latino brands or introduce their parents to mainstream brands."

In addition, due to the increase in crossover products with mainstream appeal, consumers' perception of ethnic food has shifted over the years.

"More often, American dishes and products with ethnic flair are entering the industry, making a larger impact than ever before," Singleton says. "Brands making this effort are effectively using the familiar products American consumers have already fallen in love with to introduce bold flavors. This encourages the consumer to find comfort in the familiar and allows the supplier to expand their reach, targeting a broader demographic."


According to Williams, because there is so much growth in the ethnic market, only credible and authentic products will be successful.

"To launch a private label ethnic brand will require a big investment, as the multicultural consumer is brand-loyal in key segments, and to get them to switch or try something new is not easy," Williams says.

There are many household names with a variety of ethnic label products and brands. An interesting example is California-based Safeway. Among its private-label brands, Safeway has Mexican-raised chef Marcela Valladolid featuring Mexican products like tortillas and chips, ready-to-cook meats and soups.

"Also interesting is that private-label brands include ethnic foods like soy, teriyaki, salsa, masala and scampi sauces as part of their 'basic' products," Lezama says. "Although some supermarkets still restrict ethnic products to the Mexican and Asian aisles, others are featuring these products along other pantry staples."

Indeed, as Senderov explains, some brands were created to meet the needs of particular ethnic groups from their very origins. Examples include Goya, El Milagro and La Preferida. These brands were created years ago, when their founders saw that new populations in the U.S. brought food traditions from other countries.

"There was much less need to research consumption, as the founders of these brands came from the groups they were looking to supply," Senderov says. "On the other hand, there are suppliers that have created products to supply what has been called the 'mainstream.' Many of these manufacturers have developed new products to meet the needs of multicultural consumers, such as Abuelita chocolate from Nestlé. Indeed, brands such as Abuelita have continued to adapt to the needs of multicultural consumers by creating products to meet new needs."


The multicultural shopper is becoming the mainstream shopper. As demographics in the U.S. shift to make way for a new 'minority majority,' shopping preferences across the retail spectrum will continue to become more like those in the rest of the world.

"As iconic brands with big advertising budgets experiment with these types of products, more companies will realize that the multicultural consumer is a trend-setter," Lezama says. "These consumers seek products that relate to their culture and are sold in general-market contexts. Brands that are 'culturally intelligent' enough to leverage this behavior are not only bound to increase their market share, but they have a chance at introducing new and exciting products to the general market as well. We see an interesting opportunity for ethnic foods or products that are savvy in capitalizing the growing interest in fresh and organic foods, especially among millennials."

The influence of multicultural consumers in the industry will be led not only by these groups' consumption habits but largely by consumers in the general market whose willingness to experiment with new flavors is expanding.

"As a whole, multicultural Americans are a large, young, growing crowd that will continue to grow as their favorite brands grow," Lezama says. "Retailers and manufacturers need to establish a strong relationship with their consumers early so that their brand loyalty continues to grow and influence the generations after them."

Maura Keller is a Minneapolis-based freelance writer, editor and author.