Hispanics are steadily helping shape the landscape of America’s economy and have become a game changer for marketers. But within this broad demographic lies a powerful core segment that accounts for 37 percent of the group’s total spending power—and this spending power is increasing.
According to Nielsen and the Association of Hispanic Advertising Agencies (AHAA), this viable and sophisticated market of upscale Latinos lives in a world of cultural duality, and provides lifetime value and upside opportunities for many high-end and luxury brands. Defined as Hispanic households earning $50K-$100K in annual income, upscale Latinos are the most influential segment since the baby boomers and will drive shifts in category consideration, purchasing behavior and brand relationship.
In 2012, the 15 million upscale Latinos in the U.S. accounted for 29 percent of the country’s Hispanic population—and that figure is expected to double by 2050. Upscale Latinos are younger than upscale non-Hispanic Whites (33 years old compared with 39 years old) and they live active lifestyles, often with young families. In fact, 85 percent of upscale Hispanics have a household size of three or more, compared with 65 percent of upscale non-Hispanics.
While upscale Hispanics reside across the country, they are mostly concentrated in urban areas such as Los Angeles, New York, Houston and Miami, although they show significant representation in secondary markets such as Honolulu and Washington, D.C. and Oklahoma City.
A force behind new businesses with higher educational and professional attainment, upscale Latinos are technologically savvy and are often viewed as trendsetters among their peers. They’re more likely to use smartphones, own iPads and subscribe to one of the top four U.S. mobile providers.
With more than half having attended college, upscale Latinos are more likely to own businesses than upscale non-Hispanics. Accordingly, the upscale Hispanic segment has a higher concentration of white collar professionals than total U.S. Hispanics.
Heavily involved with wealth creation and preservation, upscale Hispanics are building a bright future for their children, as they place a greater emphasis on saving for education than upscale non-Hispanics. This segment tends to own their own homes and is very financially savvy: half have investments and 86 percent maintain savings accounts. They’re also 50 percent more likely to manage their financial accounts from their mobile device. Mutual funds and stocks are the most commonly used investment opportunities among upscale Hispanics, and the majority is more likely to invest in the stock plans their employers provide them. In addition, more upscale Hispanics invest in mutual funds more than the total U.S. Hispanic population (21% vs. 16%).
Deeper pockets don’t translate to increased assimilation. Upscale Hispanics live in two cultures, as three-quarters speak both English and Spanish. While upscale Hispanics are slightly more English-dominant, their strong cultural duality and bicultural behavior is reflected in their media consumption. More than a third of upscale Hispanics watch content in both languages. English-language comedies, documentary-style programming and children’s weekly programming are the most watched. However, upscale Latinos switch to Spanish-language television for cultural events, concerts and sports.
Upscale Latinos have the disposable income to pamper their image, and they outspend upscale non-Hispanic Whites and Hispanics overall on health and beauty products. Men’s toiletries, women’s fragrances, hair care and cosmetics dominate in the health and beauty aisle, and upscale Latinos favor brand choices. When it comes to shopping for alcohol* and baby care products, this group steers toward store labels. In addition, upscale Hispanics spend more on fresh ingredients than general U.S. Hispanic population, as feeding their growing families healthy and nutritious food is a priority.
Marketers have a unique opportunity to identify the needs of an evolving upscale Hispanic household. With an interest in building net worth and simplifying their lives, upscale Latinos are fueling the growth of America’s middle class while maintaining a bicultural lifestyle—one that streamlines their multi-generational responsibilities and enriches their American Dream.
Key touch points for this segment include:
Upscale Hispanics control $4 out of every $10 Hispanic spend dollars, making this growing segment an essential component for Hispanic marketers as well as all upscale marketers in the general market.
*Brands vs. store label skew in alcohol this analysis was driven by Hispanic spend in club and other measured channels with a strong store label presence. It does not represent consumer spend on store label alcohol beyond this universe.