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 Business News | September 2006 
Latin American Firms Eye U.S. Market
 Deborah Yao - Associated Press
| | In the Phoenix, Arizona, metropolitan area with such a large population of Hispanics, the great size of this ethnic group has created the opportunity for large grocers to cater primarily to a Hispanic clientele, principally the Ranch Market and the more ubiquitous Food City with more than 60 locations across the state of Arizona. |
Consumption of the 40 million Hispanics in the U.S. is the same as the gross national product of Mexico, and Mexico has 110 million people. Three weeks out of every month, Luis Almeida sits in his office in Cicero, Ill., thousands of miles away from his family in Mexico City. The businessman suffers through his absence from them - and puts up with the state's famous bone-chilling winters and humid summers - for one reason. Actually, for billions of reasons: the dollars spent each year by Hispanics in the United States.
'The market is very big,' said Almeida, whose firm sells Mexican food products to Hispanic grocers in the Midwest. 'Consumption of the 40 million Hispanics in the U.S. is the same as the gross national product of Mexico, and Mexico has 110 million people.'
Hispanics in the United States are expected to spend nearly $800 billion this year, according to a study released last month by the Selig Center for Economic Growth at the University of Georgia. By next year, their economic power should top $863 billion - outpacing blacks as the biggest spending minority group in the country, according to the study.
Mexico's gross domestic product is estimated at $811 billion this year, according to the International Monetary Fund.
Almeida's company, Super Bodega Dona Lupe Inc., is one of more than 100 foreign businesses - mostly from Mexico - represented at the annual convention of the U.S. Hispanic Chamber of Commerce, held this week in Philadelphia. That is the highest number of foreign firms ever to participate in the convention, a chamber spokesman said.
Super Bodega Dona Lupe, which has an office and warehouse in Illinois, caters to Hispanics in Illinois, Wisconsin, Indiana, Michigan and Minnesota. Almeida calls these states 'emerging markets,' with a fast-growing Hispanic population migrating from traditionally Latino-heavy states such as California, New York, Arizona, Texas and New Mexico.
While big companies in Mexico hawking brand name products already sell into the U.S. market, Almeida is an example of the smaller entrepreneurs seeking a niche in the Hispanic market. He started his business nearly four years ago, but sales of his Campo Mio, or 'My Field,' brand really got going last year. He ships 15 containers a month from Mexico to Laredo, Texas, and on to Chicago by rail.
Part of the delay in launching his products has been making sure the goods meet U.S. standards. Labels have to contain nutritional information and manufacturers have to meet U.S. quality standards.
One of his products, a Mexican gelatin, uses only food coloring approved by the Food and Drug Administration. In Mexico, he said, manufacturers use any type of food coloring - and usually opt for cheaper ones.
Almeida also has to compete with U.S. companies catering to Hispanic tastes. For example, he wanted to bring in salsa, but many U.S. companies already make it. So Almeida decided to bottle a kind of salsa that looks like chili paste, but with more oil in it. People can smear it on eggs or tortillas, he said.
Almeida also tries to make his products quick-cooking, since many Hispanics have adapted to the convenience cooking lifestyle prevalent in America.
'Although they are originally from Mexico, they are no longer Mexican in the way they are living and in their consumption,' he said. |
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