Multicultural Retail 360 Speakers Emphasize Inclusivity, Cultural Relevance

Inclusivity, cultural relevance and category growth opportunities were some of the key topics during days two and three of the 2016 Multicultural Retail 360 Summit. The event also included vendor exhibits and a ceremony to honor cultural research pioneer Isabel Valdes, the first inductee into MR 360’s Multicultural Hall of Fame. The Summit took place August 24 to 26 at the Bayfront Hilton in San Diego.

Inclusivity was discussed on a number of fronts, including diversity hiring, marketing and the nature of products and services. Cultural relevance conversations focused on how companies are creating or adjusting products to address the values of ethnic groups. Speakers also talked about the multicultural growth potential of perimeter fresh items, cereal and other categories.

Across all topics, speakers emphasized the importance of constantly updating strategies in order to be germane to tomorrow’s consumers, many of whom will be multicultural.

Christian Martinez, head of U.S. multicultural for Facebook, cited Tower Records, Kodak and Blockbuster Video as examples of companies that disappeared when their traditional businesses were “severely disrupted” by market changes they failed to address.

“These were major organizations,” he said. “Now they’re obsolete. They were so focused on traditional competitors that they had blinders on and were unable to see startups coming.” Martinez also pointed to 1955’s Fortune 500 List. Today, 85 percent of those companies are gone.

This could happen to companies that do not address multicultural consumers in ways they relate to. One of those “ways” is mobile technology. Among Hispanics, 39.2 percent of all apparel purchases, for example are conducted via mobile; among the general market, the rate is 30.1 percent, said Martinez.

For example, on a special concurrent session panel on convenience store retailers, Luisa Salazar, director of marketing and advertising for BP ampm/ARCO, said 73 percent of English-language web site engagement at the California-based c-store chain is through mobile. On its Spanish site, the rate is 98 percent.

The Driving Force Behind CPG

Many companies are actively engaging Hispanics in CPG, where Latinos are driving overall growth. General session speakers Daneyni Sanguinetti and Seda Parzabasi of

the Multicultural Marketing Center of Excellence for The Coca-Cola Company, said Coke targets teen and young adult Hispanics by tapping into values like family, heritage and language.

They showed one ad that depicts a girl dancing with her father at her quinceañera.

Another involves printing Hispanic last names backwards on Coke cans so they can be used as temporary “tattoos.” Latino consumers also discussed what their name (a source of pride) means to them.

In cereal, Christopher Rivera, director of brand marketing for multicultural at Kellogg’s, said the company is appealing to Hispanics with recipes. In a video, master chef winner Claudia Sandaval showed how to make tres leches with Frosted Mini Wheats. Kellogg’s is also using bilingual packaging and promoting popular movies. And a new cereal box features African-American gold medalist Simone Biles and the multi-ethnic Olympic gymnastics team.

22,000 Asian Supermarkets

Cultural relevance is particularly important when targeting Asians, who are largely first generation. Driven by immigration, the group’s growth rate has surpassed that of Latinos. While still smaller in numbers, Asians are more affluent, with 49 percent having college degrees versus 28 percent of the general population.

Annually, Asians spend $25.3 billion in supermarkets, said Jeannie Yuen, president/CEO of APartnership. Sticking to their roots, 77 percent shop non-mainstream stores like H Mart, Seafood City or independents. Los Angeles is home to 13,127 Asian supermarkets; New York has 9,075.

Successful promotions often revolve around Mother’s Day, the Moon Festival and Chinese New Year. Yuen said Asians are particularly receptive to pallet displays, end caps, hanging banners, shopping cart ads and floor graphics.

In targeting Asian Millennials, promotions involving the Fung Brothers and social media have been particularly effective. Millennial soy milk promotions have involved Boston area baker and blogger Christina Ng, who created 14 recipes using soy milk. “Asians are used to drinking soy milk, not baking with it,” said Yuen. “This can help attract younger consumers.”

AARP is recognizing the growing importance of Asians 50+ through DAE Advertising, which works with local Asian organizations to teach consumers about AARP’s services. Most Asians 50+ are foreign born and unfamiliar with AARP, said Vicky Wong, president/CEO of DAE. One program, for example, recruits volunteer translators to help with tax preparation. Services are publicized at local events, such as Filipino Independence Day celebrations, and through Asian celebrity partnerships.

Growth Categories

Fresh departments are particularly important to multicultural shoppers, many of whom cook from scratch and incorporate more produce into their diets. According to Vanna Tran, thought leadership director, multicultural growth & strategy, Nielsen, 73 percent of multiculturals rarely eat frozen food and 81 percent frequently cook at home during the week. “They focus on the perimeter,” added Jana Mickey, director of account services at Nielsen’s Perishables Group.

African-Americans over index in meat purchasing by 116 (with 100 being the national average); in seafood, the number is 166. Catfish and chicken wings are frequent purchases. Asians are very fond of shrimp and tilapia. At an index of 255, they also eat significantly more vegetables, said Yuen.

Many ethnic items have been adopted by Anglos. Favorites include guacamole, whose sales increased 54 percent, and cilantro, up 33 percent, said Tran. Other growth categories include salsa, chilies and cinnamon. “Banana, apple and carrot sales are declining,” said Mickey. “Exotic produce is getting attention from all shoppers.”

Certain center store segments also present opportunities. Rivera of Kellogg’s said Hispanics are driving 37 percent of overall company growth.

Key segments for Kellogg’s are:

• Cereal: down 1.5 percent among the mainstream, but up 1.2 percent among Hispanics
• Frozen breakfast: up 1.2 percent for non-Hispanics, up 1.8 percent Hispanics
• Cookies: down 0.3 percent non-Hispanics, up 2.8 percent Hispanics
• Salty snacks: up 0.3 percent general market, up 8.3 percent Hispanics

Post Consumer Brands told a similar tale. Oliver Pérez, senior brand manager, kids’ cereals, said 82 percent of Hispanic children eat cereal at least every other day. They over index in certain brands, including Honey Bunches of Oats, 172; Malt of Meal, 122; and Pebbles, 119.

Asians, however, have little interest in cereal. In Asian supermarkets, sections can be as small as 4 feet, said Yuen. Cereal is rarely promoted.

Nobody Left Behind

From both marketing and human resources standpoints, inclusivity was the subject of several presentations. Adele Harrington, head of Global Consumer Products, Zumba Fitness, LLC, discussed how the exercise regime’s simplicity drives appeal. Started by three Columbian men—all named Alberto—Zumba blends Latin dance and fitness moves. It is far less regimented than aerobics, which involves counting steps. Zumba moves are repetitive and few in number—even elderly people, amputees and

paraplegics can participate. Zumba is most often practiced in groups, creating a sort of mass consciousness.

“It involves finding great music and creating a `sticky’ coreo that everyone can do,” she added. “Come join us. There’s no right or wrong way and no counting. If you can move, you can do it, regardless of age or physical ability.”

Harrington describes Zumba as a “love brand,” not a fitness company. People love it so much some sport Zumba logo tattoos. There is also Zumba branded footwear, nutrition shakes, videos and partnerships with Special K cereal and Degree deodorant.

Power of Diversity

With diversity hiring, there are tangible financial gains for companies that support this practice, said Debra Sandler, board director at Gannett. Sandler, who has held executive positions at Mars, Johnson & Johnson and PepsiCo, has been involved in diversity programs since the early 1990s “when it was still a big deal for women to wear pants to work.”

Corporations in the top quintile for gender and ethnic diversity are more likely to have financial returns above the national average. For every 10 percent increase in diversity on the senior executive team, EBIT rises by .08 percent, said Sandler.

Sandler suggested managers expose themselves to different groups. This increases their comfort level, creates a more open environment and reduces bias. She also believes in “rewarding managers who get it right.”

A Hospitable Segment

The hospitality industry is one segment that, according to Gerry Fernandez, president and founder of the Multicultural Foodservice & Hospitality Alliance, lags behind retail in diversity. Some companies want to change that.

Kevin Williams, director talent acquisition and inclusion for Chili’s, discussed new initiatives in heavily black Atlanta. Like many of Chili’s inner city locations, these restaurants never reached “peak success” and generated the most customer complaints. They also had few black managers. In addition to hiring more African-Americans, Chili’s taught non-black employees how to better communicate with blacks, including how to recognize verbal cues.

At Buffalo Wild Wings, Guy Floyd, regional manager, conceded that the 1,200-unit chain is “not connected” to many communities it serves. The company has started a women’s leadership forum for employees at all levels. It has also added a vice president of diversity to “identify gaps.” He added, “We have a way to go. We want results now, but it won’t happen overnight.”

The beauty of the restaurant industry, said Fernandez, is that people can start at the bottom and work their way up, making it attractive for those without formal educations. “I started as a dishwasher. It can happen.”

Down the road, demographics will probably make diversity hiring the norm. “We’re running out of white guys in corporate America,” added Fernandez.

In its 12th year, the Multicultural Retail 360 Summit was hosted by Progressive Grocer and Convenience Store News, two leading business media brands in the EnsembleIQ portfolio.