It is no surprise to anyone in the retail and marketing world that U.S. Hispanics are an integral part to any business plan. However, when broken down further, a new study finds that upscale Latinos are wielding more power than ever before.
AHAA: The Voice of Hispanic Marketing explored the growing segment in a recent two-part study "America's New Upscale Segment: Latinos!" The study, in conjunction with Nielsen, took a closer look at U.S. Hispanics earning between $50,000 and $100,000 a year and found that the segment accounted for 15 million households. That figure -- an increase of two million since 2010 -- makes up 29 percent of all U.S. Hispanics households, according to Carlos Santiago, president and CEO of Santiago ROI.
Speaking during AHAA's webcast, "The Upscale Latino Segment," Santiago explained the upscale Latino segment will generate 37 percent of the Hispanic spending power in 2013, or $500 billion of the $1.3-trillion Hispanic buying power.
"This is the most influential segment since the Baby Boomers," he said.
And this will only get stronger. Based on conservative estimates this demographic will double by 2050 to reach 35 million households, he added.
"The accelerated growth of the segment will influence the identity of U.S. Latinos," Santiago said. "This is the new boom."
But who exactly is this Latino? According to the study, the segment's median income is $71,000. In addition:
75 percent are under 45 years old versus 59 percent of upscale non-Hispanics
77 percent have households with four or more members
68 percent live in the Southwest and Pacific regions of the United States
39 percent are employed in white collar positions
Diving deeper into the upscale Hispanic segment the study identified four sub-segments: young achievers, urban uptowners, young accumulators, and the affluentials, according to Reny Diaz, director of client engagement at Nielsen.
He also explained that upscale Hispanics are 31 percent more likely than the overall U.S. Hispanic population to invest financially and almost twice as likely to establish college funds compared to upscale non-Hispanics.
Geographically speaking, upscale Latinos are evenly distributed across all major Hispanic markets in the United States. According to Santiago, 28 percent live in New York, 28 percent in Houston, 26 percent in Miami and 32 percent in Los Angeles.
However, the paths they took to the upscale segment are different, he said. For example, in Florida 75 percent of the segment owns a home and 79 percent have some college or graduated college. In Southern California, 56 percent own a home and 43 percent have some college or graduated college.
"Both geographies have about three in 10 [Hispanic] households in the upscale segment but how they got there differs," Santiago said.
Upscale Latinos also have a significant presence in many secondary Latino markets like Washington, D.C.; Salt Lake City; Honolulu; and Jacksonville, Fla. In addition, the segment is fueling emerging Latino markets in Baltimore; Raleigh, N.C.; Oklahoma City; and Yakima, Wash, he added.
Overall, the study found that the upscale Latino market is viable and sophisticated; younger with larger households; a force behind new businesses with higher educational and professional attainment; and has one foot in each culture.
"The market is here, it will continue to grow and it is not a new phenomenon," said Gabriela Alacantara-Diaz, president of G ADMarketing Communications.