The Beer That’s Capitalizing On America’s Fastest-Growing Demographic

Todays top stocks to buyHow the ability to market to this savvy consumer base could mean big bucks for one beverage giant.

17%…

That’s the current size of the Hispanic population in the US, according to the US Census Bureau.

That number is expected to reach 31% by 2060.

And it’s a demographic that companies, large or small, can’t afford to ignore.

In its landmark 2011 study, the Association of Hispanic Advertising Agencies (AAHA) concluded that for every 25% of its advertising budget that a company spends through Hispanic media channels over five years, it would generate annual revenue growth of 6.7%.

Yet it was revealed at the time that many of America’s most prominent consumer brands spend nowhere near that figure.

AAHA’s research revealed the following budgets allocated towards Hispanic media in 2010, and it was pretty dismal:

  • Kraft (NYSE:KFT) — 3.8%
  • General Mills (NYSE:GIS) — 9%
  • NestlĂ© (OTCBB:NSRGY.PK) — 7.4%
  • Hormel Foods (NYSE:HRL) — >1%
  • McCormick (NYSE:MKC) — >1%

It’s safe to assume that there’s been some improvement to these percentages since 2010, as Nielsen estimates the Hispanic population to spend about $1.5 trillion in 2015 — up from $1.0 trillion in 2010.

Moreover, it will be the Hispanic millennials that will dictate that growth.

The 2010 US Census concluded that the median age of Hispanics in the US is the sweet spot of 28.

By that age, they are likely educated, on their career paths, and have had a number of income-generating years under their belts.

According to Forbes, the majority of Hispanic millennials are largely debt free, smartphone savvy, and big spenders — the ideal target for retailers.

“Their parents have instilled in them the value of money and the importance of budgeting,” said Andrea Bell, editor of retail and consumer research at trend forecaster WGSN Group.

In a study last September by PNC Bank, young Hispanics between the ages of 20 and 29 carry about $10,000 less debt than other millennials. The average Hispanic twenty-something owes $18,000, versus $27,800 for their peers.

And they’re not just good at budgeting. They’re also becoming more successful in the jobs market.

Nielsen found that there was an 89% increase in Hispanic millennial-dominant households that were earning between $50,000 and $100,000 a year in the last decade.

In 2003, 11% of American homes with a Hispanic twenty-something at the helm made over $75,000 a year. In 2013, that number has increased to 21%.

But here’s the most important statistic of them all…

By next year, the US Census estimates that the total percentage of Hispanics in America over the age of 21 will be 15%.

Why is this crucial? That’s the population of legal-aged drinkers.

And with such a massive market to tap into, it could mean a very lucrative opportunity for this beermaker…

Top Beer Stock To Buy Today:

Facing stiff competition and lagging sales, MolsonCoors (NYSE:TAP) is looking to diversify its marketing strategy in a big way.

This summer, it will be launching the Coors Light Summer Brew through its partnership with SAB Miller (MillerCoors).

Though on the surface, they appear to be simply trying to compete with the likes of Bud Light Lime and Corona Extra (both are Budweiser products), the citrusy offering really is a bid to appeal to the Hispanics.

MillerCoors’ senior director of multicultural marketing Rudy Rodriquez, said that the Summer Brew was “designed specifically for the Latino drinker to bring new users into the franchise.”

A recent article by Fortune points out that prior to the Summer Brew, MillerCoors had failed to capture a representative share of the Latino market.

Come 2025, the Hispanic drinking age population will reach 18%, and by 2045 will rise to 25%.

It’s a burgeoning population that’s too enticing to pass up.

Based on MillerCoors’ research on Latinos’ beer preferences, Latinos also have a partiality towards flavored drinks.

This helps to explain why its Redds’ Apple Ale and Blue Moon Belgian White Ale have seen sales grow faster among Hispanics than the general market.

The Blue Moon division even has plans to create a seasonal brew this fall called Cinnamon Horchata Ale.

While some companies are still in the dabbling stages of Hispanic marketing, MolsonCoors and SABMiller are going full throttle.

In its company policy, all marketers at SABMiller are required to take multicultural training.

As for the marketing ads, be it for Summer Brew in Spanish, or any of its general market promos, all of them are developed by Hispanic ad agency Bromley.

Plus, with the World Cup 2014 just around the corner, MolsonCoors (as a non-sponsor of FIFA) will look to double its efforts to keep pace with rival Anheuser-Busch InBev (NYSE:BUD) who is the official beer of the world’s largest sporting tournament.

Yours in profits,
Todays top stocks to buy
John Holt
for Top Stock Millionaire
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