How Nestle Is Preparing Itself for a Multicultural World
What: CPG brands are facing pressure to evolve quickly in response to increasingly diverse and complex demographics within the United States.
Why It Matters: Too many brands are failing to recognize that a significant percentage of their future growth will be generated by Hispanic consumers. We spoke to Margie Bravo, Multicultural Marketing Manager at Nestle, about Best Practices for preparing your brand for a Multicultural world, how many brands are misusing data, and the danger of cultural messaging be driven by assumptions.
Assumptions Are Dangerous But All Too Common
Over half of the United States’s population growth can already be attributed to Hispanic Americans, who are increasingly diverse in their language preferences, and attachments to different elements of Latin culture. As they become the largest ethnic minority in the United States, they are carving out a new place for themselves in American culture. But brands are still scrambling to find a way to respond to these shifting demographics.
Nestle is widely recognized as the largest CPG brand in the world, recording $90 billion in revenue and $8.6 billion in profit for the trailing twelve months that ended on April 7, 2017. The United States is Nestle’s largest market, bringing in $27.4 billion in sales across all brands in 2016. But if Nestle and other similar CPG heavyweights are to stay on top, they will have to stay at the vanguard of Multicultural Marketing.
Margie Bravo, the food and drink giant’s Multicultural Marketing Manager, is a Mexican-American mother of three bicultural children, a position that enables her to approach Nestle’s Multicultural Marketing challenges from the perspective of both a consumer and a marketer.
According to Bravo, one of the most prevalent mistakes that marketers make is assuming anything about particular demographics or failing to back up conclusions about Hispanic consumers with real data. “I think to win with Multicultural Marketing you need to be curious and open-minded,” Bravo explained. “Many times when we work for a specific brand at Nestle, we think we know everything about it and we tend to answer the consumers' questions from our perspective, thinking they are just like us.”
She pointed to Nestle’s Tollhouse cookie brand. During the holidays, Nestle has to remember that while acculturated Hispanic-American children like to leave cookies for Santa Clause, campaigns should not assume that these children’s parents have grown up with the same tradition.
Language use among Hispanics is also varied: While Hispanic Americans are disproportionately young and tend to speak English as well as Spanish, their language preferences are not clear-cut: When discussing sentimental topics like family, love, tradition, Spanish may be preferred, while English may be spoken at school or among groups of young friends.
Handle Data With Care
Bravo insisted that assumptions are still keeping marketers from connecting with a demographic that will be key to driving brands’ growth in the United States. She pointed to persistent lie that Hispanics don’t buy Premium Brands when in reality, the demographic actually contributes some of the Most Valuable Consumers for Haagen-Dazs, Nestle’s Super Premium ice-cream.
The process we follow at Nestle is to first start with business analytics, in order to identify where our sales are coming from, and then to immediately look at contributors to growth.
For all the fuss that brands are making about Multicultural Marketing, it appears that they need to learn to walk the walk, not just talk the talk when it comes to investing in understanding what motivates different consumer behavior within the Hispanic demographic. And part of the problem is that brands are still figuring out how to read and make use of their data.
Even the world’s largest brands are struggling to make data analytics work in their favor. According to Bravo, too few marketers are giving growth — as opposed to current sales — the attention it deserves. “The process we follow at Nestle is to first start with business analytics, in order to identify where our sales are coming from, and then to immediately look at contributors to growth.” Bravo said.
The American Consumers of Tomorrow Are Disproportionately Hispanic
Since so many marketers are still learning how to use data to dig into deeper levels of consumer trends and demographic patterns, it is surprisingly easy to ignore the obvious, and become stuck on who is buying the products now instead of who is likely to be buying them in the future (Spoiler: it’s Hispanics).
Hispanic account for around 24% of Millennial consumers, and at an average of 27 years old, they are still in what marketers call the “acquisition stage,” when they are forming their first long-term relationships with brands. If brands only pay attention to their current customers, they may find themselves ignoring a very different population and paying a large price for it in a few years.
Brands that do pay attention will see that there are significant opportunities to connect and create long-term relationships with consumers in the demographic: “They also have larger households with multigenerational family members, and are having more kids, which opens consumption for a great number of categories,” Bravo added. But not enough brands are taking even this much into account.
“I think sometimes brands don’t ask which and how much Multicultural consumers are already contributing to sales in their category or brand,” Bravo lamented. The world’s most innovative brands need to invest in training analysts to go deeper with data and identify variables that reveal the motivations of Hispanic consumers with diverse lifestyles, cultural practices, and language preferences.
When brands don’t understand where their growth is coming from in terms of the different Multicultural groups, it is very difficult to be able to defend budgets.
What’s more, brands that don’t understand data will have a hard time defending Multicultural budgets: “When brands don’t understand where their growth is coming from in terms of the different Multicultural groups, it is very difficult to be able to defend budgets,” Bravo said.
Multicultural Masters Will Have Significant ‘Foundational Research’
Bravo asserted that with the world and its demographics changing at such a rapid pace, brands are going to have to lead an effort to educate themselves and do what she refers to as “foundational research” so that they can truly “speak the language of culture, not just the language.” This means creating degree programs dedicated to the field — a trend that is already underway — and encouraging exploration of new methods and metrics that assign values to complex and evolving consumer behavior.
“Brands just need to understand that growth is the name of the game.”