Untapped Potential

WEB EXCLUSIVE: Wine consumption by Hispanic consumers soars, but marketing has to catch up. 

Imagine you’re a retailer ignoring 25% of your customers!

Sound outlandish and against everything the retail industry stands for? Perhaps.
But this is exactly what has taken place in the wine business in California and
nationwide for many years when it came to Hispanic consumers, according to
industry observers, who say this is still a largely untapped demographic.

It’s an interesting dichotomy that California, which is home to 25% of the nation’s
Hispanic population and the oldest established wine industry in the country, lags
behind other product categories in serving this growing customer base.

The importance of the Hispanic consumer was underscored in a recent report by
the Texas Wine Marketing and Research Institute which found that an increasing
number of Hispanic consumers are drinking wine but marketers would be mistaken
to think of them as one monolithic group.

For example, Younger drinkers like Spanish-language labels and older ones say
the label language doesn’t matter. In fact, Spanish-speaking consumers are more
interested in wine’s health benefits than English speakers, according to the research.

“Acculturation needs to be taken into account. They need to be approached
differently,” said Natalia Kolyesnikova, assistant director of the Institute, noting
that while major wine companies have started marketing to Hispanics, the
institute plans to conduct surveys online and in grocery stores. She also cited
statistics showing that Hispanics represent 14% of the state’s wine market and that
consumption of table wine actually doubled between 1998 and 2003.

Recent reports on the San Francisco DMA by Scarborough Research discovered that
wine is just as popular as beer and head of liquor, among Hispanic adults and was
twice as likely to be purchased in supermarkets versus restaurants and club stores
in a given 30-day period.

The firm also found that red is 35% more popular than white, three times more
popular than rose or blush wines and four times as popular as champagne or
sparkling wine.

Big gains in consumption were also revealed nationwide over the past five years
with the number of glasses consumed by Hispanics monthly increasing nearly 50%
between 2005 and 2010, according to market research by Experian Simmons. At the
same time, consumption by non-Hispanics was only up 16%.

In a recent interview, John Hernandez, executive director of the Central California
Hispanic Chamber of Commerce noted: “As the tastes of Latino customers get more
acculturated and as their palates change, they are turning to wine.”

His comments were supported by those of Peter Vallis, executive director of the
San Joaquin Valley Wine Grocers Association. “We really have not done a good job
of translating our product to that demographic. Given the growth of the Hispanic
segment of the market, it seems apropos that we find out what these folks want to
drink,” he said in an interview.

As such, the association has partnered with the Chamber of Commerce by forming
a panel of Latino judges to pick the best California wines, results that will help the
entire industry promote more effectively to this group, he stated.

The gauntlet has already been picked up by Beringer Vineyards in the Napa Valley,
whose agency BARU Advertising in Los Angeles, created an entire Spanish-language
ad campaign entitled Invita El Sabor (“Welcome Home the Flavor”) which involved
more than just translating existing ads into Spanish, but creating new messages
revolving around Hispanic family traditions and how wines can be paired with
different Hispanic dishes. “Hispanics are one of the fastest growing segments
of wine drinkers so we wanted to introduce our big, iconic brand to them,” said
Francesca Schuler, chief marketing officer.

The campaign includes Latino television networks in Southern California, sampling,
Spanish-language displays in supermarkets and new POS materials. Plans call for
adding a Spanish-language web page within Beringer.com and Spanish-language
wine tastings at their vineyards.

Print material pictures Latino foods like empanadas, taquitos and guacamole. As
BARU ceo Elizabeth Barrutia told Ad Age: “Often on wine and foodie websites, they
pair a wine with a pungent Brie cheese. Everyday latino consumers don’t spend time
in the Fresh cheese section.”

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