OpEd: P.R. brands need to think about scale, consumer diversity when expanding to U.S.

In recent years, we’ve seen the interest among Puerto Rican brands to expand their sales by exporting their products or expanding operations to Orlando and Central Florida.

This makes all the sense in the world. Initial estimates suggested a wave of more than 300,000 Puerto Ricans who had relocated to this region.

And, Puerto Ricans living in the U.S. are almost twice the size of the population in Puerto Rico at 5.2 million (Census Est. 2016).

More recent projections in 2018 by the Bureau of Economics and Business Research from Florida University indicate that number to be closer to 30,000 to 50,000, added to area with a population growth of approximately 15% in the last 8 years. Likewise, that 5.2 million diaspora population is spread out across several markets.

While Orlando is certainly a good point of entry for Puerto Rican brands, Hispanics of Puerto Rican origin represent only 11% of its total population. The other 89% is comprised of Hispanics of Cuban, Colombian, Venezuelan and other countries of origin in Latin America. Moreover, Puerto Ricans in Orlando are only 3% of the total population in Florida.

Puerto Rican brands should therefore plan their strategies to attract not only the newly arrived Puerto Ricans in the Central Florida region, but also to expand their reach to a broader market segment, the total Hispanic consumer market in Florida and beyond.

In Florida alone, a brand entry in this segment is the road to consideration among another 5.2 million Hispanic residents who have a similar culture and who may be persuaded to buy a Puerto Rican brand.

And why not? Mexican brands like Tajín seasoning, Corona beer and Bimbo bakery products and others from Latin American countries, have done this successfully, crossing over to the mainstream U. S. market and across consumer segments beyond the U.S. Hispanic market.

So where can you start? 
The stakes are high. We can’t just ship a ton of product somewhere and see where it falls. My advice to clients is to always begin with a clear definition of their current and potential consumer target along with clear goals and KPI’s. it is imperative to “size the opportunity” over the short-, medium- and long-term relative to their prospect consumer target.

Then, ask what the viability of manufacturing at scale is and plan accordingly. Giant retailers like Publix and Winn Dixie in Florida or Kroeger and HEB in the Southwest, must be convinced that a broad market potential exists that will result in an adequate sales rotation in their stores. This takes time, effort and money for expansion of brands that require a quick ROI to fuel their growth.

Importantly, detailed consideration must be given to the marketing strategy and budget required to reach, generate awareness and ensure relevance among a more diverse consumer market. Nostalgia for “lo nuestro” won’t cut it in this context so it’s key to understand the existing (or not) relationship between the brand and its prospect consumers and create a cultural link to their needs and expectations from that brand.

Another key factor to consider are the demographics of the consumer target, so that we can achieve a scalable, replicable business model that can be applied to the expansion project.

Contrary to Puerto Rico, the U.S. Hispanic market is young, digitally savvy and highly influential among a broader, highly diverse mainstream population.

In coming articles, we will explore demographic and psychographic profiles of key consumer targets as well as media and digital consumption patterns that are critical for the success of brands entering the U.S.