Vicente Fox Headlines Record-Setting Hispanic Retail 360 Summit

Former president of Mexico discusses leadership and government as more than 600 attendees gather to share strategies, tactics and data on the Latino market

Former president of Mexico Vicente Fox gave a wide-ranging address touching on leadership, government, politics and partnerships as the keynote speaker of the 2011 Hispanic Retail 360 Summit, held in August in La Jolla, Calif.

Calling for an expansion of NAFTA (North American Free Trade Agreement) to keep North America competitive with the rising economies of Asia, Fox said, "We need a new NAFTA vision because no single nation by itself can succeed and be competitive while the rest of the world is forming blocks."

The president from 2000 to 2006 said Canada, the United States and Mexico must be aware of the current shift of markets, financial resources and political power from the West to the East.

Fox, who worked in the private sector as a businessman as well as the political sector, didn't avoid controversy either — repeating a call he's made before that legalizing drugs would end the drug war along the U.S.-Mexico border. "Prohibition doesn't work," he said.

Something else that doesn't work is walls. "I don't understand why this great country, which I love…decided to build walls. Walls divide, walls isolate and walls don't work. The Berlin Wall couldn't hold out freedom and the China Wall could not stop foreign invaders. Migration is the greatest asset the (U.S.) nation has. Migration has been the strength, power and energy that have made the country so successful."

At this year's conference, a record audience of 605 retailers, suppliers, agencies and service providers participated in area store tours, nine general sessions and 16 concurrent sessions, as well as four smaller working groups. The seventh annual Hispanic Retail 360 Summit was hosted by Stagnito Media and sponsored by PepsiCo. Stagnito Media is a leading food industry media firm and publisher of Progressive Grocer and Convenience Store News, among other media brands.

Other featured speakers at the conference included Latino rapper, producer and entrepreneur Pitbull; Jose Luis Prado, president, Quaker Foods and Snacks North America, PepsiCo; speakers from retail powerhouses such as Sears/Kmart, Target Stores, Safeway, The Home Depot and AutoZone; as well as a lengthy list of Hispanic marketing experts.

By far, though, the biggest surprise was Pitbull, whose talk about the importance of "keeping it real" enthralled the audience.

"Remember the Taco Bell commercial with the little dog? That is not real," he said.

Pitbull (real name Armando Perez) is a first-generation Cuban American who grew up in Miami. Empowering the Hispanic community is an important part of who he is, he said.

"Hispanics, Latinos, whatever you call us; I call us human beings," he said. "We are hard workers who appreciate freedom and appreciate coming to a country that allows us to provide for our families."

Tapping into that community needs to be strategic and not by force, he stressed. "You can try to invade, but it's not a culture you invade. It's a culture that lets you in."

He further explained that the retail industry needs to combine the community's traditions, culture and an understanding of the struggles of people who stay true to their roots. "The culture is amazing and its buying power is through the roof, but I think it's about more than the buying power. It's about the real people," Pitbull added.

His advice was echoed by Prado of Quaker Foods and Snacks North America, who said tapping into the Hispanic market and building brand loyalty among the consumers in that market starts with being authentic. Companies, he said, need to be open to diversity, understand the Hispanic identity, become part of the community and, in the end, have a mutual respect for the community.

"When we combine all that, we will win the trust of the Hispanic consumer; win loyalty," he said, adding that in today's economic rollercoaster, capturing the Hispanic market just makes good business sense. "This is an area that can be the engine for growth that is so badly needed these days."

Retailers and CPG firms also have to realize not all Hispanic consumers are the same. There are different nationalities, as well as different professions within the market. For example, the blue-collar Hispanic worker is loyal to brands and receptive to advertising, according to Kevin Kilpatrick, founder and publisher of Constru-Guia al dia. But retailers and merchandisers need to keep in mind this particular segment prefers to communicate in its own language.

As for Home Depot's experience, the company strives to connect with the Hispanic blue-collar worker through key passion points, according to Alejandra Barron, senior manager of multicultural marketing for the company. For example, the home improvement and construction retailer works to market to this particular consumer in a relevant way, makes shopping easier and comfortable, and constantly and consistently engages its customers.

"We really want to develop a relationship with them," Barron said. "We want to engage in a conversation with them, ideally."

PHENOMENAL GROWTH

In the span of one year — from 2009 to 2010 — Hispanics accounted for 47 percent of U.S. consumer spending growth, stated Geoscape founder and CEO César Melgoza.

To be successful in this rapidly growing market, though, retailers and manufacturers need to pull back the curtain and look beyond the numbers, several presenters noted.

"The business case is so important, but it's not all in the data," said Armando Martin, president of XL Edge and master of ceremonies for the three-day event. "Hispanics and non-Hispanics need to come together and ask, ‘How can we help our leaders understand the changes in America?’"

Martin further explained that as long as the United States shares a border with Mexico, the business community will have opportunities and all segments of that business community need to align themselves, regardless of competition.

According to Melgoza, Latinos are the new "growth majority" and make up 56 percent of the population growth since 2000. The changing face of the population is reflected in what is considered "mainstream." In 1960, mainstream was The Beach Boys, "Ozzie & Harriet," hamburgers and hot dogs, and only 4 percent of players in Major League Baseball were minorities. Now, Melgoza said, mainstream is Shakira, "Modern Family," and tacos and burritos, and 28 percent of players swinging a bat in the majors are Hispanic. In addition, in 1960, Hispanics were "a fringe opportunity," but in 2011, they make up the majority of spending growth.

Over the past 20 to 30 years, companies have moved from diversity as a way to mitigate legal liability toward the end goal of diversity as a strategic advantage, Melgoza said.

WORKFORCE DIVERSITY

A key to seizing that advantage is having a multicultural workforce, said Alison Paul, vice chairman, U.S. retail leader and principal at Deloitte Consulting LLP. "Consumer insights come from those who share the consumer's cultural experience," she said.

According to a joint study by Deloitte and the Network of Executive Women, Hispanic buying power stood at $212 billion in 1990 and is projected to jump 513 percent by 2014 to $1.3 trillion.

"It is no longer about compliance or EEOC (Equal Employment Opportunity Commission)," Paul said. "It is about an integrated approach to the potential you have with a diverse workforce."

Dian Emerson, vice president, diversity and inclusion at Safeway, agreed, explaining that the company is focused on making sure its employees reflect the community it serves. "From a retailer's point of view, if you don't have a diverse workforce you have a lot of work to do," she said. "You need to ask yourself why."

The retailer-vendor partnership is also a key to success. Vendors need to let retailers know if they have the right products on the shelves, said Annie Zipfel, director, Target-owned brands for Target Stores.

Marie Quintana, senior vice president, multicultural sales at PepsiCo, echoed the importance of the retailer-vendor partnership and the diversity of a company's workforce, but pointed out the road to success in the Hispanic retail arena does not have to be a difficult one.

"Sometimes we make it harder than it needs to be," she told attendees. "It's not a niche market; it is an integrated strategy."