When Carlos Medina, the CEO of the Statewide Hispanic Chamber of Commerce of New Jersey, sees the ever-growing number of Hispanics in the state, he sees dollar signs.
And he wonders why so many companies in the state do not.
According to the U.S. Census data released Thursday, there are now more than 2 million Hispanics in the state, which equals 21.6% of the population. Their buying power is even more impressive.
According to the Selig Center for Economic Growth at the University of Georgia — which has been studying the spending of minority populations in the country for more than 30 years — the Hispanic market is by far the largest minority market in the country. The group’s spending power grew to $1.9 trillion in 2020, an increase of 87% from 2010.
Even more: Much of that spending took place in New Jersey.
The Selig Center, in its latest report (which was issued this week), said New Jersey had the fifth-biggest Hispanic market in the country, at $70 billion. As a state, New Jersey trails only California, Texas, Florida and New York. (That means we’re even ahead of Arizona.)
So, how can companies start to capture that market? We asked Medina. Here are his thoughts:
ROI-NJ: Let’s start at the top: How can New Jersey companies get a bigger share of the Hispanic market?
Carlos Medina: If you’re a smart organization or a smart company, you’re going to make sure that your board of directors reflects your customers. Latinos now make up at least 21% of the population in the state — you’re going to want to make sure your board reflects that. But, it’s more than that. You’re going to want to make sure your C-suite and your vendors look like that demographic, too.
Unfortunately, too many corporations in New Jersey ignore this. And it just boggles my mind. They keep making this mistake, especially when it comes to how they approach their advertising.
ROI: How so?
CM: You can see by their ad spends that they’re still chasing down a shrinking demographic instead of chasing a growing demographic — one that has money in their pockets that they’re going to spend.
This not only is a demographic that’s growing; it represents a new demographic for many companies. These are the new potential customers — this is the market companies should be chasing.
ROI: What about business-to-business?
Hispanic purchasing power
The 10 states with the largest Hispanic markets, based on 2020 data:
- California: $506 billion;
- Texas: $361 billion;
- Florida: $208 billion;
- New York: $139 billion;
- New Jersey: $70 billion;
- Illinois: $68 billion;
- Arizona: $63 billion
- Colorado: $40 billion;
- New Mexico: $32 billion;
- Washington: $31 billion.
Source: The Selig Center for Economic Growth at the University of Georgia
CM: The 21.6% statistic should make companies question and analyze their procurement policies. Hispanics and Latinos create companies at a higher rate than any other demographic. If you’re a smart corporation, you should want to work with them — for no other reason than you’ll be able to realize better pricing.
If you go to your same three friends every time you need a bid, that’s not going to return much. If you get 10 bids, statistically speaking, you will get better bids, because the people bidding will know they have real competition. If you get three, or worse, you only get one, you’re going to get killed, because people know you’re not really bidding it out.
Don’t misunderstand me. We don’t want any special favors, we just want to be able to compete with everybody else. We want to have a seat at the table and get a chance to do the work. Jersey is a big relationship state. Companies need to give folks a chance to build other relationships that keep people honest. And it’s not just with our community, but with all minority communities.
ROI: Relationships can run deep, too, yes?
CM: Absolutely. Companies need to know that our demographic is about relationships, too. We’re a large community, but we’re a tight-knit community of people. People in our community know who you are doing business with. It may be subliminal, but when they want to go to a bank or spend money at a retail establishment, they know who is doing business with our community — and they appreciate it.
ROI: They appreciate it from their pocketbooks. One recent estimate said that, if the U.S. Latino population were a country, its GDP growth rate would be the third-highest growth rate among all global economies. That’s pretty good. I can see why you’re so surprised that so many companies don’t see this.
CM: Exactly. They should want to do business with us because we have big buying power. That’s why companies need to make sure their boards, their leaders, their vendors look like us because — increasingly — we are the customer base.
And it’s a base that’s going to keep on growing. I would argue today it’s already 22% — and I can assure you it’s going to be 25% before you know it.