The U.S. is starting to look a lot like Mexico, as marketers realize that brands with household-name status south of the border have a built-in advantage with Hispanic consumers who know and like them.
Mexican marketers and U.S. companies such as PepsiCo and Colgate-Palmolive Co. that have Mexican units with their own strong brands are eyeing the two-thirds of the U.S. Hispanic market of Mexican descent for now, and looking ahead to crossover potential to the general market. Some brands have sat on supermarket shelves as imports for decades but are now getting serious about savvy marketing; others are crossing the border for the first time.
PepsiCo International, for instance, is introducing 15 confectionery products such as chili-flavored lollipops with a mango-gum center this year in the U.S. from its $200 million Sonrics product line in Mexico, a company spokesman confirmed. And Colgate-Palmolive’s biggest hits in the U.S. Hispanic market are two of the company’s brands brought from Latin America, Suavitel and Fabuloso. The company said in a recent report that Suavitel has a 37% share of the U.S. Hispanic fabric-softener market, and Fabuloso is the market leader for liquid cleaners.
A glimpse at the future of retailing: Wal-Mart Stores' executive vice president and chief operating officer, Eduardo Castro-Wright, named in January 2005, was president-CEO of Wal-Mart Mexico, the country’s largest retailer, for the last four years. He brings a wealth of knowledge about Mexican consumers and the products they favor to Bentonville, Ark. Mexico has 100 million people, while the U.S. Hispanic market is approaching 40 million, about 13% of the U.S. population.
“Mexico and the U.S. are rapidly moving to become one market,” said Pedro Somarriba, who was general manager of Clorox in Mexico until he was hired last year as senior vice president for sales for the U.S. by family-owned Mexican household-cleaner marketer Alen. Imagine Procter & Gamble Co. owned and run by two brothers named Alfonso and Enrique Garcia, and that’s Alen. The company boasts some of Mexico's best-known cleaning brands, including the leading bleach Clorolex and a Pinesol look-alike called Pinol (Pinalen in the U.S.) whose jingle most adult Mexicans on either side of the border know well enough to sing.
Alen has U.S. distribution and has done some sporadic local advertising, but with the U.S. Hispanic market the fastest-growing part of Alen’s business, the company has hired Ole, a young Hispanic shop in New York that is developing a reputation for working with Mexican marketers in the U.S.
For Mexican brands in the U.S., the challenges range from understanding a changing consumer to persuading a client that the commercials it airs in Mexico won’t work in the U.S.
“Almost everyone has done that,” said Javier Escobedo, Ole’s managing partner. “It’s the perfect way to throw money away. We live a different reality. We’re in a foreign land, don’t have family around and everything is in a different language. Then people get acculturated and have different tastes. Someone may be watching a telenovela, but be completely American.”
Another Ole client, Mexican canned-food giant La Costena, just broke its first spot for chile peppers. A group of friends watching soccer on TV automatically do as they would in Mexico City at the end of a game -- head to a monument called The Angel to celebrate. They are taken aback when they open the door and see snow and a New York yellow cab.
“It’s based on an insight that really happens to us Mexicans here,” said Paco Olavarrieta, Ole’s creative partner. “When we are eating Mexican food, especially something as iconic and magic as a chile, and on top of that awe are surrounded by other elements from our culture -- sports, friends, music -- for a moment we really forget where we are.”
La Costena’s sales are growing in double digits in the U.S., where the company has a 25% share of the whole-chile-pepper market, said Johanna Lugo, La Costena’s U.S. marketing manager.
“Familiarity with our brand is a plus, but we don’t need serapes or mariachis to say ‘I’m a Mexican brand,’” Ms. Lugo said. “We connect in a different way with consumers. Not nostalgic, but ‘I know who I am.’”
Laurel Wentz, Advertising Age. May 16, 2005
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