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Last
March the Grammy Award-winning Mexican musical group Los Tigres
del Norte—perhaps the best-known band in all of Latin America,
often referred to as the “Beatles of Mexico”—played
to 4,000 well-dressed fans at the Sarasota-Bradenton Convention
Center. Three-quarters of them had paid $60 per ticket, and the
party went on until 3 a.m. Los Tigres del Norte has sold more
than 50 million albums and performed before crowds as large as
150,000. Yet despite their international fame, there was no mention
of the group’s concert in the local Anglo media.
To Oscar R. Parsons, the president of the convention center, the
event was a wake-up call to local business. He shakes his head over
the lack of recognition of the region’s powerful and rapidly
growing Hispanic market.
“
The [Hispanic] community has a lot of money,” he says. “They’re
honorable people, they pay their bills, and it’s been kept
pretty secret.”
Hispanics and Latinos now outstrip African-Americans as the largest
minority group in both Manatee and Sarasota counties, numbering close
to 60,000 and representing 11 percent of the area’s population.
Foreign-born immigrants and their children account for 70 percent
of that 60,000, according to Dr. Sarah Hernandez, a New College of
Florida professor who focuses on international labor movements.
According to Miami-based Geoscape International, a firm that specializes
in gathering multicultural market intelligence nationwide, the average
annual household income for a local Hispanic family is $43,000. Annual
Hispanic household expenditures on goods and services in the Sarasota-Manatee
area, including things such as food, transportation and insurance,
range from $500 million to $650 million.
TAPPING INTO THE MARKET One of the most compelling indicators of
the power and presence of the local Hispanic community has been the
introduction of Spanish-language FM radio to the area. In July 2005,
CBS Radio made the decision to flip one of its Tampa-based country
music stations to a full-time tropical Spanish format. In just one
rating period, 50,000-watt 92.5 FM, La Nueva, jumped from 30th place
to second place in the Sarasota-Bradenton market’s Arbitron
radio ratings for listeners 25 to 54 years of age. Luis Diaz-Albertini,
vice president and general manager of the station, says, “It
is very rare to ever see a jump like this.”
The station is currently earning $350,000 per month in ad revenues,
but Albertini is frustrated that 70 percent of that comes from individual
businesses rather than advertising agencies. “There’s
a little bit of racial bias with media buyers from agencies,” he
says. “They don’t trust the numbers that we’re
putting up, telling us, ‘We need a four-book average’.
[An average Arbitron rating over the course of one year.] In the
meantime, they’re losing market share every day. We even tell
them that we’d put their current English-language ads on for
a test, and they respond, ‘But wouldn’t it be better
if the ad were in the audience’s native language?’ And
we say, ‘Exactly! Now we’re getting somewhere.’”
The only other Spanish-language FM station in the area is 105.3,
La Zeta, a less powerful, 6,000-watt signal coming out Zolfo Springs.
In contrast to La Nueva’s tropical Spanish format, La Zeta
is employing a “Mexican Regional” format aimed at the
predominant Mexican demographic in our area. “You don’t
go into Manhattan with country music, nor would you go into the heart
of Alabama with smooth jazz and expect any significant audience,” Bryan
Hollenbaugh, the station’s general manager, explains.
While not pulling numbers as strong as La Nueva, La Zeta is posting
respectable ratings for its size, something that’s not going
unnoticed. There have been two offers to purchase the station in
the past six months, but Hollenbaugh and the station’s private
owners are in no rush to sell. “The biggest question of the
day is when will the advertising community mature enough to demand
Hispanic media?” he says. “When they do, the Clear Channels
will come in, and many of our mom-and-pop-type of publications and
stations will fall off.”
Albertini agrees: “Fourteen percent of the U.S. population
is Hispanic, yet only 3 percent of dollars spent annually on advertising
is allocated to this market. There’s $180 billion spent on
advertising per year in the United States—there is a lot of
ground to be made up.”
Pedro Perez, a 1996 graduate of Ringling School of Art and Design
who likes to say he was “born in Miami, made in Cuba,” hopes
his fledgling Nuevo Advertising will ride this upward wave. It’s
currently the only ad agency in Southwest Florida to focus solely
on the Hispanic market, and Perez has received calls from as far
away as Key West for consulting advice. To date he has begun work
on smaller contracts with the Tampa Bay Storm arena football franchise,
the Southwest Florida Water Management District and Gold Coast Eagle
Distributing, targeting the Hispanic community.
Luis Eduardo Barón came to Sarasota from his native Columbia
in 1999 and immediately saw the emerging Spanish-speaking market.
He now publishes 26,000 copies of a weekly newspaper, 7 Dias, and
60,000 copies of a glossy monthly magazine, Guia del Golfo. He is
also one of many in local Hispanic media who are rooting for Perez
to do well. “Unfortunately,” he says, “most Anglo
companies do not understand what Pedro is trying to do, and many
are using him for little more than translation services. That is
not an ad agency.”
Marjorie Floyd, owner of Strategic Marketing Resources in Sarasota,
says she empathizes with Perez and Barón. As the head of marketing
for the southeast U.S. region of Long John Silver’s restaurants
during the early 1990s, Floyd was tasked with figuring out why Miami
was the chain’s worst market in the United States when fried
seafood should be a strong sale in a heavily Hispanic market. “After
a few phone calls, I realized why things were out of whack,” she
says. “The media buyer was based in Pittsburgh—an Anglo—and
didn’t know the first thing about Miami. Our principal restaurant
was on Calle Ocho—the heart of Little Havana. Yet we did not
have any Hispanic employees in the place. We immediately changed
our advertising with radio ads in Spanish, hired bilingual employees
and had them wear “Hablo Español” buttons, created
giant pictures of menu items with prices and added three typically
Latin desserts. Sales went up 76 percent in one day.”
C.J. Czaia, a 1977 Riverview High School graduate and a self-professed “café-con-leche” son
of an American Foreign Service officer and a Nicaraguan mother, has
been entrenched in the local Hispanic market since 1995. His law
firm, Czaia & Gallagher, does work from Orlando to Collier County
and is based in a recently renovated 4,000-square-foot office across
the street from DeSoto Square Mall. The firm employs 20 full-time
employees, 80 percent of whom are Hispanic. Czaia boasts that from
clients’ first phone call to the final resolution of their
case, they receive full legal service in the Spanish language.
Czaia says businesses are either blind to Hispanic customers or fearful
of cultivating them. “People are scared of what they don’t
know,” he says. “We are a very well-schooled community
but not very educated. I say to people, ‘It’s about making
money. If you don’t react to the changing demographics of your
local market, you don’t make money.’ Look at our banks.
Western Union and Amscot are making a killing. Why aren’t any
of our local banks trying to aggressively market and get in on this
game?”
Czaia doesn’t hesitate to spend heavily on Hispanic media across
the board and believes it’s a better buy than traditional media,
since undocumented segments of the population will never show up
on ratings and so do not put upward pressure on advertising rates.
Vern Buchanan of the Buchanan Automotive Group believes that 20 percent
to 30 percent of his monthly sales can be attributed to Hispanics.
Ten percent of his company’s six-figure monthly marketing budget
goes to Hispanic marketing.
Amscot, the Tampa-based check-cashing and tax-filing corporation,
recorded $3 billion in transactions during 2005 in 111 locations
across Florida; 25 percent of Amscot’s marketing message is
taken to the air via Spanish-language advertising on at least 19
Spanish radio stations, as well as Spanish-language television.
Darlene Echevarria, district manager for Sarasota and Bradenton’s
12 Amscot locations, estimates that 60 percent of Amscot’s
clients in Sarasota and Bradenton are Hispanic. Of Puerto Rican descent,
Echevarria is bilingual and considered a valued asset by the company’s
Scottish principal owner, Ian MacKechnie. “We’ve found
we have to have bilingual associates in every one of our locations,” he
says. “We are desperately seeking and recruiting bilingual
staff for the Sarasota-Bradenton area. It has gotten to the point
now that we are encouraging and giving incentives for bilingual associates
to relocate to Sarasota from Tampa.”
Not surprisingly, local Hispanics seem to be doing the most business
in the Hispanic market presently. An eye-opening experience for any
local businessperson unaware of the strength of the region’s
Hispanic market is a weekend visit to Supermarket Acapulco Tropical,
a family-owned Latin superstore. The store, across the street from
DeSoto Square, is a scaled-down version of a typical Florida supermarket
but with an entirely Latin American flavor. If you can jockey through
the crowd, inside you’ll find a Latin bakery, a butcher, Latin-flavored
hot food to eat there or take home, a natural tropical juice bar
and a fresh tortilla area, in addition to typical supermarket fare.
Ruben Valle, a 36-year-old Mexican-American transplant from San Benito,
Texas, illustrates the maturation of the local Hispanic marketplace,
where there is now a significant internal migration of Hispanic-Americans
from places such as Texas or California. He arrived here in 1999
and immediately recognized that there was nowhere to buy fresh corn
tortillas—a staple for all three meals in Mexican and many
Central American diets. With a $20,000 investment, he opened Tortilleria
Valle in June 2000. In May 2004, he sold the business to an Anglo
couple, Ramon and Karen Kipnes, for more than $1 million.
Now producing and selling more than 35,000 corn tortillas a day,
the Kipnes say they are pleased with the return on their investment. “We
have the Valle recipe for the tortilla, the Valle name, and we have
many of Ruben’s family still working for us. Ruben put together
a great product,” says Karen Kipnes.
Valle used the proceeds from the sale to finance the construction
of Southwest Florida’s largest Mexican nightclub, El Sombrero,
located in Palmetto. With capacity for 2,200 people, there is rarely
a weekend when the club is not packed with a festive crowd, letting
loose after a hard week of work. Customers come from Sarasota, Manatee,
DeSoto, Hardee, Charlotte, Pinellas and Hillsborough counties. With
a payroll for 2005 of close to a quarter-million dollars, Valle,
wearing his new 22-karat, gold-and-silver belt buckle engraved with
El Sombrero, expects revenues to be well over $1 million this year.
He estimates that between the club and the promoters who brought
in musicians during 2005, they easily spent six figures on advertising
with La Zeta, the Mexican FM station. Andrea Saputo-Cox of Gold Goast
Eagle Distributing company for Budweiser says El Sombrero is one
of their largest accounts. “The atmosphere that they create
is very positive—great music, great food, and they always get
a great crowd.”
Barón, the publisher, says this growing market is not going
to go away. “The Hispanic market is still in its infancy, and
the process of assimilation will not be the same as it was for other
cultures. When you look at the massive availability of media in Spanish—TV,
radio, satellite, print publications—you quickly realize that
no one will be losing their native language when there is so much
in place conserving it. What’s more, you now are seeing a retro-acculturation
of third-generation Hispanics who are relearning Spanish and ensuring
that their children learn the language as well. Twenty years ago,
to speak Spanish was an embarrassment; today it’s stylish.”
TAX DODGERS OR PAYERS?
While the issue of illegal immigrants often coincides with complaints
that undocumented workers take advantage of taxpayer services, such
as medical care, schools and government translators without ever
paying for them, there are illegal immigrants who pay taxes and contribute
to Social Security without ever taking advantage of those services.
It is estimated that over 1 million undocumented individuals crossed
into the United States during 2005 alone. Dr. Alayne Unterberger,
anthropologist and executive director of the Florida Institute for
Community Studies in Tampa, estimates that in especially agrarian
Florida counties, undocumented workers can account for up to 80 percent
of the working Hispanic population.
In the urban areas of Sarasota and Manatee counties, nearly all
undocumented workers can buy a fake Social Security number from
a variety of underground
sources, according to one member of the Gulf Coast Latin Chamber
of Commerce. These are used for months and years on end to receive
their weekly paychecks—checks that withhold Social Security.
This is money that will never be called upon, and serves as a yearly,
multibillion-dollar contribution to the federal government by the
undocumented population.
Patti Patterson, deputy regional communications director for the
Social Security Administration (SSA), confirms that there is no
requirement for employers to verify Social Security numbers, and
wage reports
are not typically processed by SSA until one year following the
work period. The SSA does send letters to employers and employees
who
register false numbers, in case an error occurred, but in the majority
of these cases there’s no response. Since 1937, more than
254 million W-2s have come up as untraceable, representing $519
billion
in taxed wages (not adjusting for any interest income earned).
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