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Raising the Barrio

Posted on  | May 29, 2013   Bookmark and Share
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America’s face is changing. By 2042, it is estimated that people of color will outnumber whites in the U.S. In parts of the Southwest, Latinos already make up a significant majority of the population, particularly among younger age groups. Asian-Americans make up the largest racial population at seven of the nine University of California campuses, and a higher percentage of Asian-Americans than European-Americans have incomes over $100,000. And from Jay-Z to Barack Obama to Ursula Burns (CEO of Xerox Corp) and Oprah, African-Americans hold ever-increasing political and economic sway.

What does this mean for the beverage world? This much is certain: there is no one-size-fits-all solution to the multi-culti puzzle. Not only are distinct cultures feeding America’s 21st century melting pot, age demographics are also at play. While some immigrants may aim to recreate life in the mother country, their first-generation-American offspring may aim to adapt their ethnic tastes to American consumption patterns. Appealing directly to distinct sub-populations requires insight as to culturally influenced habits—what media is most consumed, what sports resonate, how a specific demographic treats religion or socializing or credit cards.

For as long as Americans have popped corks, nationality has been central to any discussion of wine. More recently, marketers adore talking about attracting women via “skinny” liquors and female-minded labels. But ask them how they reach out to African-Americans or Hispanics, and the conversation can become one of delicate navigation. It’s a sticky wicket, and with good reason. Isolating a demographic group can lurk precipitously close to stereotyping. And if target marketing is seen as suspect, it can backfire.

But sheer numbers dictate that beverage alcohol professionals in each tier should pay closer attention to ethnicity. Moreover, marketing can be conducted inclusively; after all, if the point is to get the right products to the right customers, targeting is good for both sellers and buyers.

Homeland vs. Homegrown

Part of the trick to tapping into ethnicity is balancing the appeal of a country of origin vis à vis a group’s experience and attitudes in America. “When it comes to marketing product,” says Erick Castro, a first-generation Mexican-American and owner of San Diego’s newest craft cocktail hotspot Polite Provisions. “I don’t think a lot of people realize how much more open-minded a lot of the Latinos are here in the States. It’s more than just rum and tequila.”

Cultural influences from one’s homeland (or one’s parents’ homeland) can affect what’s popular, and how it’s consumed. “Johnnie Walker Black has a tremendous amount of success in the Caribbean market, and that translates here, particularly for Dominicans,” says Leslie Velasquez of Empire Merchants, a large New York distributor. “Buchanan Whisky is very popular among Colombians and Mexicans. Part of the brand strategy for Diageo, which has a tremendous portfolio internationally, is marketing to different Latino segments based on historical success in other countries,” adds Velasquez.

Nicole Rolet, marketer for her family’s wine label Chêne Bleu, agrees that cultural heritage can influence drinking habits. She notes that breaking into the Miami market with her signature Southern Rhône rosés is a challenge. “It’s a red wine culture there, despite the heat,” says Rolet. “Because of the Cuban and Hispanic population, red wines of Spain are very prevalent.”

Aspiration by the Bottle

Some trends—notably bottle service and weekend festivity—and more behavioral than product-based. “A lot of on-premise business in the multi-culti world is really driven by bottle service, particularly for special occasions,” says Marcelo Alcoba, multi-culti division manager at Empire Merchants. “It’s the feeling that ‘Hey, I’m at a lounge or club, and I have two or three bottles on the table. I’ve made it. Look at me.’”

At The Flavor Lounge, a small dancing, drinking and hookah spot in Richmond Hill—an economically challenged Queens, NY, neighborhood—Fridays bring Latin Night, with salsa and merengue blended into the nightly hip-hop. Despite the bar’s modest trappings, $100 bottle specials are offered for those who arrive before midnight. The trend is even more prevalent at high-end nightclubs in Manhattan and Las Vegas. Francesco Lafranconi of Southern Wine and Spirits Nevada notes: “The table service in clubs is very inflated. It’s easy to spend a few thousand for bottles of vodka or tequila.”

Social nightlife impacts when, what and how much Latinos and African-Americans drink, according to Alcoba. “The weekend is when people are going out, or hanging out, and they may want to drink something a little higher-end,” he says. “During the week, it might be Smirnoff Coconut, but on the weekends, Cîroc Coconut.”

Emma Martinez Flores, a first-generation Mexican-American in Nampa, Idaho (a suburb of Boise with a large Latino population), agrees. “Mexicans might have a beer during the week, when they’re done working,” she says. “But going out on the weekends to dance and eat and drink—that’s the big thing.” Despite the large Latino population throughout metro Boise’s Treasure Valley (many employed in agriculture and industry), few social spots directly target Latinos, but clubs such as Caldwell’s Blue Eye Nightclub are apt to showcase Norteño bands on Fridays and Saturdays.

Making the Global Local

The question remains, even with patterns emerging: How do suppliers and distributors convert demographics into dollars? “Our main goal is to make sure we have the right accounts,” says Empire’s Alcoba. “We look at zip codes and specifically find where the consumers are, where they live and where they shop. Then we decide that’s where we’ll focus our on- and off-premise selling.”

Not surprisingly, on the sales frontlines, language itself is critical. Alcoba notes that in metro New York, Empire Merchants tries to place staff who understand the area and its residents, ideally speaking the language and understanding the dominant cultures in the neighborhoods. “It speaks to getting the most out of the brand, and in the case of Hispanics, understanding whether that means Mexican, Colombian, Caribbean or others,” Alcoba says.

Brand support is crucial to distributor success, according to Alcoba. The past couple of years have witnessed an increase in Latino and African-American outreach marketing, especially in the form of outdoor advertising. The Johnnie Walker “My Label is Black” campaign, launched late last year, is highly visible in Latin-American concentrated neighborhoods. Musician/entrepreneur Don Omar and former Yankees catcher Jorge Posada lent their faces to the ad campaigns and have made appearances; charitable partnerships with local organizations help tie the brand directly to the community.

Targets, Both Broad and Focused

Other targeted promotions and products abound. Malibu Red partnered with R&B musician Ne-Yo, who wrote a song specifically for the spirit—a blend of rum and tequila targeting the nightlife crowd. El Jimador, a tequila popular with Mexicans on both sides of the border, launched commemorative bottles adorned with soccer team motifs. As part of April’s Tribeca Film Festival, Heineken sponsored grants and awards recognizing Latino and African-American filmmakers.

A new product, Coco Mambú, welcomes guests with “Hola!” on its website; technically a liqueur at 36 proof, this blend of rum, coconut water (20%), sugar and natural fruit flavors, celebrates a tropical island vibe with two inaugural flavors: Orange-Mango and Watermelon-Lime. RumChata, a 27.5-proof blend of cream, rum and cinnamon, is not targeted toward an ethnic demographic per se, but it is inspired by the rice-based Mexican beverage horchata.

Earlier this year, Hennessy partnered with the rapper Nas as part of its “Wild Rabbit” campaign. Last year’s partners included singer Erykah Badu, boxer Manny Pacquiao and filmmaker Martin Scorcese. Anchored by the slogan “What’s your Wild Rabbit?”, the campaign aims to attract a new generation of aspirational consumers. Hennessy Latino, the brand’s Hispanic outreach program, also hosts large-scale events around the country.

Meanwhile, an increasing number of black and Latino entertainers and entrepreneurs are getting behind brands. Sean “Diddy” Combs’s association with Cîroc Vodka might be the most prominent. CeeLo Green partnered last year with Ty Ku Saké as both investor and spokesperson. Music producer Timbaland launched the sparkling flavored vodka product LeSutra, targeting nightclubs and lounges. And Jay-Z is invested in D’Ussé, Bacardi’s Cognac launched in 2012.

When targeted demographic outreach works, it encourages the consumer to embrace the brand both as a lifestyle emblem and to appreciate the history behind it in the same way marketers have long aimed to attract specific consumers.

Challenges & Promise

Outreach notwithstanding, multi-culti alcohol marketing can still be complicated by economic disparity. So-called “bulletproof” stores, put little inventory on display; some suppliers, in turn, create custom POS materials for such shops. Smuggling alcohol into bars and clubs to spike cheaper soft drinks is a serious concern at many bars. Overall, however, Alcoba notes the trends have been very positive for the multi-culti division: “You’re really seeing a lot of super-premium items driving our revenue
and growth.”

Perhaps most important for re-sellers to remember is that, particularly among young Americans of all stripes, there is a great deal of crossover these days. While Latinos and African-Americans may represent fairly distinct, targetable segments, music, food, cuisine and pop culture flow in multiple directions. Mojitos are practically as well-known as margaritas. In Budweiser’s most recent TV ads, young people of varying ethnicities dance the night away. Tecate Light recently released a canned michelada (beer blended with lime, spices and a hint of chili pepper) as well as a campaign that plays humorously—and bilingually—with English and Spanglish words commonly used among U.S.  Hispanic men.

Just as white suburban kids are steeped in hip-hop, so too are Latinos, Asians and African-Americans populating the fine drinking and dining scene. “People ask me, ‘Who’s your target?’” says Ken Austin, founder and chairman of Tequila Avión. “I say: one thing tequila doesn’t do, is it doesn’t discriminate. No one turns down a shot of tequila. My market is anyone over 21
with a mouth.”

Of course, cultural sub-groups have a long history of influencing American food and drink consumption. The founding fathers brought their taste for discussing politics in pubs over from England. Germans and Bavarians almost singlehandedly built America’s beer culture. Italians ensured California’s wine industry survived Prohibition. Today’s hip-hop culture spark of Moscato is not so unusual in the big picture, and similar phenomena are apt to follow.  All things considered, it is safe to say that America’s melting pot is leaving a significant imprint on the nation’s beverage alcohol enjoyment.


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