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New Jersey Business
Hispanic Businesses Enter Mainstream Economy
By Anthony Birritteri
March 1, 2002
Copyright © 2002 New Jersey Business. All Rights Reserved.
Copyright (c) 2002 ProQuest Information and Learning. All rights reserved.
Hispanic businesses have come into the mainstream of the U.S. economy. Companies and firms in sectors such as finance, health care and technology are replacing food retailers and auto dealers, according to Hispanic Business magazine's annual ranking of the nation's Top 500 Hispanic-owned firms.
According to Daniel H. Jara, president of the Statewide Hispanic Chamber of Commerce of New Jersey (SHCCNJ), Jersey City, "It's no longer bodegas (little grocery stores). We are also seeing Hispanic businesses in areas such as construction, manufacturing and services industries. The assimilation has been very strong."
The statistics are also strong. According to 1997 Census Bureau figures, there were 36,116 Hispanic-owned businesses in the Garden State and 1.2 million nationwide. The number in New Jersey represents a jump of some 14,000 firms since 1992, based on the five-year Economic Census survey These companies employed 128,000 workers and generated nearly $5.7 billion in revenues.
According to Jara, Hispanic businesses today number approximately 40,000 companies in the Garden State, generating some $7.5 billion in revenues. In 1997, the state ranked fifth among the states with the most Hispanic firms, following California with 336,400; Texas, with 240,400; Florida, 193,900; and New York, 104,200.
Hispanic residents in New Jersey numbered 1,117,191 in 2000, a 51 percent increase from the 1990 figure of 739,861. The increase accounted for more than half of the state's total population growth. Hispanics now make up 13.3 percent of the state's total population of 8.4 million. Hudson County is home to the state's largest Hispanic population, with 228,221 residents, an increase of 24 percent from 1990. The second largest Hispanic population in the state resides in Passaic County with 143,815 people. The counties with the largest percentage of Hispanic population increases were Ocean County, 71 percent, followed by Hunterdon County, 70 percent.
Just a generation ago, this New Jersey population largely consisted of descendants and immigrants from Cuba and Puerto Rico. Today, the Mexican population (102,929) and Dominican (102,630) have surpassed the Cubans (77,337), while Puerto Ricans (366,788) still hold the majority Most other Hispanic residents in New Jersey are immigrants or descendants from countries such as Colombia (65,075), Ecuador (45,392) and Peru (37,672). Approximately 80,497 are from other countries in Central America and 66,550 from South America.
Looking at the nation as a whole, the U.S. Hispanic population stood at 32.5 million, according to the 2000 census, making up 12.5 percent of the total 281million U.S. population, a 60 percent increase in a decade. Hispanics virtually tied African-Americans as the country's largest minority group.
What makes the Hispanic firm so successful? Jara says it's the entrepreneurial spirit that the business owner learns from his or her homeland, or is handed down from the preceding generation. "In Latin America, people are geared towards trade and commerce, and they put the same concepts to work, here." Another reason for the success of these businesses is that they are all family oriented. "Employers treat their employees as part of their family. That has been a great incentive for employees to be more productive, explains Jara.
Some of the 14 New Jersey-based, Hispanic-owned businesses that appear on the most recent national listing of Hispanic Business magazine's Top 500 include: No. 3 - Goya Foods, Inc, Secaucus, with 2000 revenues of $695 million; No. 68 - Mendez Dairy/Tropical Cheese Co., Inc., Perth Amboy, $65.1 million; No. 71 - Anpesil Distribution Services, Gibbstown, $63.6 million; No. 109 - Northeast Construction, Inc., Lakewood, $39.6 million; No. 143 - Imperial Construction Group., Inc, Elizabeth, $28.79 million; No 227 - ECO & Sons, Inc., Paterson, $13.73 million; No. 291- Metro Packaging & Imaging, Inc., Moonachie, $12.6 million; and No. 309 - the CSR Group, Nutley, $12 million.
Jara says that many Hispanic entrepreneurs confront the challenge of starting their own businesses without the usual resources available to most small businesses. "Access to capital has been a major hurdle," he says. To change this scenario, Jara and the Chamber are working with various financial institutions in the state, introducing them to this lucrative, $7.5-billion market. "We are now just starting to see financial institutions opening the door," he says.
The 8,000-member Chamber also has agreements in place with the Small Business Administration and the New Jersey Economic Development Authority to market the latter groups' financial loan products to the Chamber's membership. In addition to this, the Chamber is in the process of establishing a micro-loan fund where it will make available loans of between $1,000 and $20,000. "One of the major complaints financial institutions have about Hispanic businesses is that they don't have a financial history with banks. We feet the micro-loan fund will be a starting point to establish such a history. We are asking area banks to commit dollars to the fund. A committee of bank representatives will then review the loans," says Jara.
Other services provided by the Chamber include educational and training seminars. Every October, it holds its ever-popular Annual Convention & Expo at the Newark Air-port Marriott Hotel with more than 2,500 attendees. Some of last year's educational sessions and workshops included: business development; SBAEDA loans; international trade; Internet access; school construction programs; and information technology.
About a third of the chamber's membership consists of non-Hispanic businesses that want to tap into the Hispanic market, and for good reason. This market, nationwide, had an estimated buying power of between $450 billion and $550 billion last year. This year, it is projected to be more than $600 billion. By 2010, one of every four consumers will be of Hispanic descent.
For the non-Hispanic company wishing to sell its products or services to this market, misconceptions and stereotypes have to be conquered.
Many companies think they know the Hispanic market, but they classify everything under one generic group and market to that group. "Yet, there are many nationalities identified as Hispanic or Latino, all influenced by a variety of differences," says Ricardo Lopez, president of Hispanic Research, Inc., East Brunswick, a consulting firm which has helped companies such as AnheuserBusch, M&M Mars, McDonalds, Verizon, Citgo, Seagrams and Coca-Cola market to the diverse Hispanic population here in the U.S. and abroad. "U.S. geographic region, socioeconomic status , education, immigration status , age, gender and level of acculturation all play a role," says Lopez. "These groups also vary in their attitudes and behaviors, preferences regarding food, entertainment, media sources, telecommunications, health care and financial services. Each sector of the Latino or Hispanic community needs to be understood and addressed on an individual basis."
For M&M Mars, Hackettstown, Lopez has helped the candy manufacturer with the research and test marketing for a "Dulce de Leche-flavored" M&Ms which is currently being test marketed in Miami, Florida, and San Antonio, Texas. Dulce de Leche, ironically, is one type of desert that is fairly common in Most Hispanic and Latino cultures, although it may go under different names. It is a chilled desert, with a consistency similar to rice pudding, made from ingredients including milk, sugar, salt, eggs, vanilla extract and orange juice.
Like Dulce de Leche, the Hispanic businesses are beginning to experience "Sweet" success in the U.S.