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Mainland Hispanics: Opportunity for economic growth

BY ELISABETH ROMAN of Caribbean Business

June 23, 2005
Copyright © 2005 CARIBBEAN BUSINESS. All Rights Reserved.

Goya may have been the first food producer to target the Hispanic market and to place its products on supermarket shelves on the U.S. mainland, but food producers throughout Puerto Rico now are recognizing the economic potential of this growing market on the mainland.

Hispanics are the fastest-growing consumer group on the U.S. mainland, with their purchasing power reaching $700 billion in 2004 and projected to reach $1 trillion over the next five years. This market is larger than the gross national product of many nations. Hispanic earning power is also on the rise, reaching an average of nearly $45,000 a year in 2004.

While Hispanics are playing a greater role in the U.S. economy, they have maintained their cultural identities as consumers, seeking the foods and products with which they most identify. As a result, the growth of Hispanics on the mainland presents major economic opportunities for Puerto Rico food producers and businesses. At a time when the island’s economy is projected to grow only a little over 2%, the growing Hispanic market on the mainland could open the door for Puerto Rico companies to export their services and products and generate major growth for their local business.

This week, CARIBBEAN BUSINESS has looked at the opportunities available within the island’s food industry to export its products to the mainland. Several companies already have begun to take advantage of these opportunities and are reaping major benefits.

Hispanics consumed over $153 billion in food and beverages in 2001, according to most recent studies. The Hispanic market, 41 million strong and growing, spent nearly 25% of its disposable income on food, which has sent many stateside supermarkets, particularly in Florida, California, Texas, Illinois, New Jersey, and New York, looking for products that appeal to the Hispanic market to stock their shelves. As a result, it is the perfect time for Puerto Rico producers to take advantage of the opportunities this market offers and to gain the loyalty of Hispanics with their products and brands.

Puerto Rico companies have a major advantage by being a part of the U.S., being able to identify with the demands of the Hispanic markets, and having the ability to fulfill the needs of this market with products that are native to Puerto Rico. While many companies on the island are targeting foreign countries for possible expansion, it is important they don’t overlook the potential for economic growth that the Hispanic market on the mainland offers. Puerto Rico companies possess talent, quality products, and open access to the U.S. market, allowing them to export exceptional products that appeal to Hispanics on the mainland. The 41 million Hispanics strictly refers to the mainland, since the four million Hispanics who reside in Puerto Rico aren’t included in that figure.

This week, during the Puerto Rico Chamber of Commerce convention, representatives from many businesses on the mainland will visit the island, including a group from the state of Florida and the Orlando Chamber of Commerce, to meet with local businesspeople. This activity provides an excellent opportunity for Puerto Rico companies to establish new business contacts and open doors to their products and services on the mainland.

Commonwealth government support is also necessary for local producers seeking to export to the mainland. Puerto Rico government offices in the U.S. must be used efficiently to assist local companies seeking to export or expand on the mainland, particularly in the states with the largest Hispanic populations. Just as Puerto Rico government offices assisted citizens who relocated from Puerto Rico to the mainland 30 to 40 years ago with jobs and other opportunities, these offices could help local producers of all sizes cater to the highly important Hispanic market.

This Caribbean Business article appears courtesy of Casiano Communications.
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