Hispanic Market Growth Propelled by Resident Population Expansions, Mercanti Report Says

LOS ANGELES & MINNEAPOLIS--(BUSINESS WIRE)--Natural increase is now more important than immigration as a driver of Hispanic population growth, and holds important implications for driving business and investment opportunities catering to this expanding segment of the U.S. economy.

“We believe the Hispanic market is ripe with prospects in almost every consumer product and services sector and it’s just a matter of who will capitalize on these abundant opportunities.”

That’s the conclusion of a comprehensive report on the Hispanic market, and its influences on various business sectors, published by The Mercanti Group, an investment banking firm headquartered in Minneapolis, with offices also in Los Angeles and New York City.

According to Edgar Mendez, a Principal at Mercanti’s Los Angeles office, who researched and prepared the study as part of the firm’s monthly Chronicle report series, over the last six years, from 2000 to 2005, natural increases – births minus deaths – accounted for 50% of the growth in the population of the nation’s Latinos. “As a result of the slowing rate of immigration and increasing number of births to Hispanic women in the United States, U.S.-born Latinos are becoming increasingly significant in the Hispanic market,” Mr. Mendez said.

The Chronicle also highlights the fact that Hispanic consumers in the U.S. have one of the largest disposable incomes of any minority group and reports estimate the buying power of Latinos will grow from $838 billion in 2006 to $1.3 trillion in 2011.

“The ability for companies and investors to identify product areas and market to Hispanic consumers will lead to incremental gains in their businesses,” said Mr. Mendez. “We believe the Hispanic market is ripe with prospects in almost every consumer product and services sector and it’s just a matter of who will capitalize on these abundant opportunities.”

In that context, the Mercanti report takes a detailed look at how the trends are affecting various economic sectors, including:

• Key patterns in regional demographics among Hispanics, noting that in terms of population, the nation’s 42.7 million Latinos represent the second largest in the world, trailing only Mexico. Substantial differences exist in the way national subgroups are represented in various markets.

• The Mexican food and beverage industry is booming, accounting for an estimated $52 billion in the U.S. and growing rapidly, with seven in 10 surveyed households eating Mexican food and using Mexican ingredients.
• In the restaurant industry, the early purveyors of Mexican foods are giving way to more authentic Hispanic businesses serving a growing population of Hispanic Americans.
• Food, a key ingredient of Hispanic home life, has resulted in Latino people shopping for groceries 26 times each month, or three times more often than other consumers. They also are consumers, as are other Americans who in increasing numbers are becoming Hispanic food aficionados, of specialized housewares for making tamales and warming tortillas. The market for housewares and appliance brands and products catering to the particular nuances of the Hispanic consumer stands to grow at rates well above the general category.
• Hispanic culture is impacting mainstream consumer products, notably the video and juvenile products sectors. In addition, The Quinceanera, which celebrates a young woman’s 15th birthday, is becoming an increasingly elaborate event, with price tags rivaling that of weddings. Walt Disney World, similar to its popular wedding packages, recently launched a package geared toward Quinceanera parties ranging in price from $1,800 to $20,000.
• Online, Hispanics are becoming “media mavens,” says the report, and the statistics are “staggering.” Citing various studies, the Mercanti Chronicle notes that Hispanics led the general market in “media meshing” and that they spend more than half of each day engaged with television, internet and various media-related technology products. MySpace en Espanol and other online communities such as quepasa.com, babbalu.com, vostu.com and MiGente.com are all competing for a share of the Hispanic online market.
• Companies and private investors are increasingly buying into various Hispanic related properties, including in 2007 San Antonio Farms (a $45 million producer of Mexican sauces and other products), Liberman Broadcasting (U.S.-based Spanish language broadcaster), La Canasta (chain of retail furniture, electronics and appliance stores), Sahale Snacks (gourmet snack food products), DNI Holdings (Hispanic dating website), Hoy New York (Spanish language daily newspaper), Gonzales & Sons (Hispanic food distributor), and Hispanic Impact Media (leading Spanish-language yellow page publisher in the Oregon-Washington-Idaho-Utah areas).

About The Mercanti Group

The Mercanti Group is a results-oriented boutique financial advisory firm that embraces a fierce commitment to client service and provides creative Merger & Acquisition, Capital Raising and Strategic Advisory solutions to small and middle market companies, private equity firms and individual business owners in the consumer, health care, technology, business services and manufacturing industries. Mercanti offers companies the expertise and capabilities of a large investment bank with the focus, attention and energy of a small entrepreneurial firm. Mercanti has offices in Minneapolis, Los Angeles and New York. Mercanti also is strategically affiliated with Marquette Financial Companies, a diversified financial services company which is a part of the Pohlad family holdings. If you would like more information on The Mercanti Group, please visit the Web at www.mercantigroup.com, or contact a Mercanti professional at 612.333.0130 (Minneapolis); 310.444.0130 (Los Angeles); or 212.883.0130 (New York).