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Marketing matters

Marketing matters

Sandra Gonzalez

History is repeating itself. Similar to the historical “discovery” of America, companies are “discovering” today’s ethnic consumer–the new America. What took them so long–weren’t we here all along? Latinos represent 42.6 million people in the United States, including Puerto Rico, and contribute $700 billion in purchasing power (expected to grow to more than a trillion dollars by 2010). So now that these consumers have been “discovered,” many newcomers are scrambling to woo them, while old amigos are reaping benefits from their relationships.

Before all the press releases and census announcements, companies rarely paid attention to Latinos. Now suddenly they are hiring Latinos, adding them to their boards of directors and retaining advertising and public relations firms focused in ethnic outreach. (Again, what took so long?) Yet companies that invested heavily years ago, whether by financial support or with community relations, are enjoying a solid and trusted relationship with this “new” consumer. These experienced companies learned that the most important components of any multicultural initiative are sincerity and a genuine desire to understand and serve the community. But as the Latino community grows in numbers and financial power, and becomes diffused throughout new areas of the U.S., all businesses, including the wine industry, will be faced with challenges and with pitfalls to avoid.

Wine companies must recruit and retain a diverse staff at all levels to successfully serve ethnic consumers. We aren’t talking quotas here. Employees are not hired because they are Latino (or African-American or women, etc.). Rather, they are recruited and hired because they understand the company’s goals, have the necessary skills and are the best candidates for the position. Companies with active diversity outreach nurture a network with local and national social and professional organizations such as the Hispanic Chamber of Commerce, National Society of Hispanic MBAs, Society of Hispanic Professional Engineers, Hispanic Students Business Association, among others. Diversity in the workplace starts at the top, including boards of directors and high level executives.

Cendant Corporation and Tyson Foods added Latinos to their boards just this year, but pioneers like Anheuser-Busch for years have had the value of experienced, well-connected directors who not only provide feedback on Latino issues and marketing programs, but guide the company toward its overall goals. And it is not the responsibility of one ethnic manager to carry the weight of the company. The entire company must be involved in diversity and human resource efforts. Diversity out-reach benefits include a sensitive and insightful workforce and executive team.

Companies successful in their Latino marketing initiatives realize that they must close the loop. Though producing Spanish language material is a first step, it is useless if the other 99% of the company and its distribution chain is ill-prepared to service the new consumer. Home Depot spokesperson Kathryn Gallagher explains, “We provide regional direct mailers in Spanish, but we also have Spanish-speaking staff, have a standard practice of including Latino media in all our information and support Latino-focused philanthropy.” Home Depot’s out-reach program goes beyond translated advertisements; it encompasses internal and external affairs. The company effectively conducts ethnic outreach for a diverse work-force, supports Latino community organizations and produces in-language consumer education and home-improvement clinics.

In January 2004, Coca-Cola launched a retail partnership program called Club Tienda Latina. In addition to translated materials directed to consumers, Coca-Cola acknowledged that its distribution chain needed to empower Latino businesses and those in Latino communities. Club Tienda Latina improves merchandising to Latino neighborhoods and offers support to both “Level 1” supermarkets and larger independents and “Level 2” bodegas and mom & pops. The program provides merchandising materials, such as display racks, single-serve coolers and bilingual P-O-P. Retailers earn points for using the materials, and redeem points for small-business necessities, including security systems and delivery vans. By investing in Latino business, Coke recognizes that its distribution network improves as well. And that translates to positive results.

Companies must invest in new and loyal consumers. Latino marketing is neither spot marketing nor a quick sell. A sincere commitment to the community is critical for goodwill, loyalty and relationship building, especially for the wine industry. Latino advocates know and remember who was there for them from the beginning, and who stepped up when there was a need. Long-established companies that championed Latino causes before the “Latino boom” are being rewarded with that goodwill and loyalty. For wineries, this can begin with local involvement in a Latino organization or a full outreach development and sponsorship program.

Round Hill Vineyards & Cellars is one of the first U.S. wineries to take on that commitment. The company began a low-key Latino marketing initiative two years ago. John Fontes, ethnic marketing manager, has stated that the company is not marketing to Hispanics–rather, they are marketing as Hispanics. In addition to bilingual materials for the entire Round Hill portfolio of wines, the company works directly with grocers by assigning bilingual demonstrators in stores to provide information about its wines, food pairing with Latino cuisine, and selecting wine for a meal, gathering or gift. The company recently became affiliated with Latin Grammies pre-events, established a scholarship aimed at Latino cuisine student chefs and is educating Latino restaurateurs about wine. Round Hill, along with other select wineries, is exhibiting at Expo Comida Latina (expocomidalatina.com), the largest U.S. Hispanic food and beverage tradeshow. Also, before being asked, Round Hill offered to sponsor my wine and food pairing seminar on the trade room floor, demonstrating that the company has its ear to the ground and is actively seeking opportunities to support the Latino community.

Finally, companies need to be patient about their investment. Ethnic outreach initiatives do not result in a fast turnaround. Remember, wineries are educating their first generation of Latino wine consumers. Do not give up if expectations are not initially met. It takes time to gain respect and trust, especially if Latino concerns have been ignored or neglected in the past.

Coors learned this in the late-’70s, and today continues to turn around that history. In 1977, Latinos boycotted Coors over its alleged refusal to hire Latinos, then over an ever-growing list of issues. By the mid-’80s, Coors’ share of sales to Latinos in California had dropped from 40% to 17%. To take steps forward, Coors began to work with leading Latino organizations including the Hispanic Association on Corporate Responsibility, increased its diversity hiring and made finan-cial contributions to support Latino scholarships and education programs. Twenty years later, Coors’ Latino workforce represents 11% of the company; it has increased procurement from Hispanic-owned companies and donated more than $500,000 to Hispanic charities over the past few years. It has also earned numerous accolades from the Hispanic community, such as being listed among the best places for Latinos to work by both Hispanic and Latina Style magazines, and it is listed in Fortune magazine’s Diversity Elite.

Today’s “discovery” of the new America is a challenge for all businesses, large and small. But through a genuine desire to understand and serve the Latino community, that discovery could reap many benefits for our wine industry, including solid relationships with community leaders, employees and ultimately, consumers. These are the relationships that build a solid future for wine in the new America.

(Sandra Gonzalez publishes vinoconvida.com, a Web site dedicated to wine, food, arts and travel celebrating Latin flavor. She contributes wine articles to Latino publications, co-hosts a radio segment on Napa Valley’s KVON-AM 1440 discussing Latin influences in wine, food, arts and travel and she produces wine seminars focused on Latin flavors. She can be contacted through edit@winesandvines.com.)

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