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).