Study: Minorities Show Brand Loyalty, Spend More on Food

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CHICAGO-Ethnic minorities represent nearly $600 billion in annual buying power, but a researcher said only about $500 million is spent on minority marketing in the U.S.

Among findings of a new study: Ethnic minorities spend more money per household on groceries than the general population. The average household spends $65 a week on groceries. African-Americans spend $66; Asian-Americans, $87; and Hispanics, $91.

One reason Hispanics and Asians spend the most is because of larger family size. But a more significant factor is they are much more likely to buy branded products and spend more on quality products, said Gary Berman, president of Miami-based Market Segment Research, which conducted the study. He discussed the results with Advertising Age last week at the Food Marketing Institute convention.

"These groups define nationally advertised brands as being quality products and are more likely to select quality products over price," he said.

Products like all-purpose dry seasonings are purchased by 55% of Hispanics in a one-month period, compared with 40% of the general population. The "Hispanic palate is more accustomed to spicy foods, and they use seasonings in all aspects of their cooking," Mr. Berman said.

But he added that the taste for spicy food is spreading to the mainstream U.S. culture. "We can see this in the increased popularity of foods such as salsa."

Breath mints, however, don't appeal to the Asian-American population. While 25% of the general population buys breath mints every month, only 8% of Asian-Americans do the same.

"The definition of fresh breath is different for Asian-Americans," Mr. Berman said.

Asian-Americans also avoid canned vegetables. While 51% of the general population purchases canned vegetables each month only 19% of Asian-Americans follow that pattern.

"Asian-Americans like fresh fruits and vegetables, and purchase them on a daily basis as needed," Mr. Berman said.

Mr. Berman advised marketers not to peddle breath mints, canned vegetables, deodorant, bathroom tissue and insecticide spray to Asian-Americans, "because this market just doesn't [use] these products."

As far as apparel is concerned, African-Americans spend significantly more than the general population and other ethnic groups.

"African-Americans are very conscious of clothing and are absolute trendsetters of style and fashion," Mr. Berman said.

Savvy marketers wanting to tap into this African-American segment must make consumers feel welcome, he said. For example, J.C. Penny Co. has revamped about 170 stores to target African-Americans-changing merchandise, store layout and using black models in advertising.

Mr. Berman also advised marketers that Hispanics and Asian-Americans are more receptive to media messages than the general population.

"These minorities are less cynical about advertising messages because they really seek out information about products-things that the general market might take for granted," he said.

Also, Hispanics and Asian-Americans are some of the largest consumers of media.

Hispanics spend an average 75 hours a week listening to the radio, watching TV, and reading newspapers and magazines; Asian-Americans spend about 59 hours; while the general population spends 43 hours. For Hispanics and Asians, that includes media in their native language and in English.

Mr. Berman advised marketers trying to appeal to ethnic minorities to "research first and have a deep understanding about consumer attitudes and behaviors-identifying the cultural hot buttons."

He gave an example of a beverage company that launched a grass roots effort aimed at Hispanics tying its product in with soccer under the assumption that all Hispanics play soccer.

The promotion was very successful in markets like Los Angeles but failed in places like New York-the reason being that Caribbean-based Hispanics prefer baseball. So in those markets, the promotion wasn't as relevant.

"That is a strategic mistake," which could have been prevented with some more research, he said.

The Market Segment Research study was sponsored by 30 major corporations; 5,000 Americans were surveyed in person and over the phone from January to April. The margin of error was 3 points.

Besides showing ethnic purchasing habits for more than 250 foods and beverages, media usage and retail habits, the study also includes data on population growth, acculturation/assimilation, social issues and direct marketing.

The report will be presented May 12 at the Market Segment Research conference in New York.

Leah Rickard coordinates Research News.

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