Give Me Your Tired, Your Poor, Your Beloved Products
(Business 2.0) – Mexico's Jarritos is one of the fastest-growing soft drinks in the United States. But until recently it was una marca desapareciendo--a dying brand. Despite having name recognition in its homeland that rivaled that of Coca-Cola, the 55-year-old soda was losing ground to imported U.S. rivals. So parent company Novamex boldly crossed the border. In the past few years, it has moved onto the competition's turf with marketing that speaks to Mexican Americans' thirst for the good old days. Today, Jarritos's 11 flavors are sold in more than 50,000 U.S. outlets. Sales at privately held Novamex, which now distributes 11 Mexican brands, are set to grow 23 percent this year to an estimated $225 million, thanks mostly to Jarritos. "The Hispanic market isn't a niche anymore," says Luis Garcia, president of marketing and communications firm Garcia 360°. "It's redefining the mainstream."
Jarritos isn't the only product capitalizing on immigrant nostalgia. A flood of newly arrived brands from foreign shores is poised to give icons like Coke, McDonald's, and Starbucks a run for their money. Instead of targeting mass markets, these specialty brands are aimed at immigrant populations with the hope that demand will migrate to the general public. Some are labels that consumers remember from their homelands; others are U.S. startups selling products with immigrant appeal. But all of them are eyeing major expansion plans over the next year in order to capitalize on the increasingly diverse American population. Foreign-born and first-generation residents in the United States number more than 56 million, the most ever, and together they pack at least $1 trillion in spending power. The 40 million U.S. Latinos alone account for $686 billion, and it's likely that by 2030 one of every four people in the country will be of Hispanic or Asian descent. "We are at the tip of the iceberg," Garcia says.
Just ask Pollo Campero, the Guatemalan fried chicken chain that has diners lined up around the block every time it opens a new location. Aggressively expanding, it plans to increase its store count from 22 to 50 by the end of next year. Other Latin American franchises, too, are crossing the border. Mexico's Taco Tote, targeting neighborhoods that are at least 35 percent Hispanic, has 11 U.S. stores and plans to open at least 10 more by the end of 2006.
Ethnic branding is also spreading to other diasporas. Jollibee, a fast-food chain based in the Philippines, has 10 stores Stateside and a franchising plan on the way. Philippine bakery and food shop Goldilocks now does $50 million in annual sales in the United States; its new locations boast menus that cater to second-generation Filipinos and crossover buyers. India's Satnam Overseas, similarly, wants to broaden its 20-year-old brand. The ready-to-eat food and rice maker recently rolled out products in Kroger and Whole Foods and plans to hit Wal-Mart next.
Meanwhile, U.S. entrepreneurs are launching new brands that give immigrants a taste of home. Panadería Taza, which debuted in Phoenix in June, wants its Costa Rican coffee and Latin American pastries to attract both homesick Hispanics and non-Hispanics looking for a Starbucks alternative. It plans to franchise 10 coffeehouses by the end of 2006. Los Angeles-based Soofer is targeting Middle Easterners with its $10 million-plus Sadaf brand. The seasonings, oils, and other foods hit shelves at Safeway in September, and sales are expected to climb 20 percent this year. Chicago's Lifeway Foods is raking in $20 million annually selling Kefir, a yogurtlike drink craved by Eastern Europeans and Russians. "The ethnic population was our bread and butter and let us fund growth into other populations," says Lifeway CEO Julie Smolyansky. Kefir is gaining a mainstream following and just began test runs with Target and Wal-Mart. Lifeway also launched a spinoff called La Fruta, aimed at Hispanics. The strategy, Smolyansky says, is simple: "Appeal to an immigrant population with a product that's familiar." -- ELIZABETH ESFAHANI
The Ethnic-Branding Boom
Source: Listed companies