Hispanics Gain Growing Share of U.S. Consumer Spending

“In 2007, Hispanics will control more disposable personal income than any other U.S. minority group, and businesses are paying close attention to Hispanic tastes.

Hispanic consumer spending power (disposable personal income) is expect to top $863 billion in 2007, some 300 percent higher than it was in 1990, according to the Selig Center for Economic Growth at the University of Georgia. During the same period, spending power of non-Hispanics is projected to rise 125 percent.

One in seven people in the United States is Hispanic – of Mexican, Puerto Rican, Cuban or other Spanish/Hispanic/Latino culture or origin. Hispanic is an ethnic category, rather than a race. The Spanish language is the unifying factor.

The Department of Labor’s Survey of Consumer Expenditures shows Hispanics spend more than non-Hispanics on groceries, telephone services, appliances, vehicles, clothing and housing. For instance, in 2004, spending on food at home was $3,883 per Hispanic household, compared to $3281 per non-Hispanic household. Supermarkets in the United States are designating larger sections for Hispanic foods.

Hispanic households might spend more on these consumer items because they are more likely to be in a household-forming stage of life than the general U.S. population, according to Jeff Humphreys, director of the Selig Center. The median age of Hispanics is 27, compared to 36 for the entire population, and the average Hispanic household has 3.5 people, compared to 2.5 for non-Hispanic households.

Humphreys said other products and services, ones on which Hispanics underspend today, might attract their spending in coming years – health care, education, personal insurance or pensions, for instance.

U.S. businesses are taking note of the economic clout of Hispanics by designing products, services and advertising to appeal to them. Car sales to Hispanics grew 9 percent over the last five years, according to Cynthia McFarlane, managing director of Conill Advertising Inc. Her company developed a Toyota television ad featuring a father and son speaking in Spanish and English. The ad first aired during the 2006 Super Bowl, one of America’s most popular sporting events.

José López-Varela, of the Association of Hispanic Advertising Agencies, said spending on advertisements targeting Hispanics is growing at almost four times the pace of overall advertising spending. López-Varela’s agency, ADN Communications in Florida, recently worked on an ad campaign for Royal Caribbean Cruises that emphasized family travel and featured the Mexican band Maná.”

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