Earlier this month, PepsiCo CEO Ramon Laguarta announced a set of initiatives and related spending aimed at Hispanic businesses, consumers, communities and employees. Some of that work will pass through the relatively new Hispanic Business Unit of PepsiCo Beverages North America (PBNA), which is now in its third year. In 2020, the company added a similar unit for PepsiCo Foods North America. BD reached out to Esperanza Teasdale, the VP and GM who leads the Hispanic Business Unit for beverages, reporting to PBNA CMO Greg Lyons. Teasdale discussed her team’s work to capture a greater share of the $2.6 trillion in annual spending in the US by Hispanic consumers. As she put it, that market would be equivalent to the eighth largest country in the world. The following has been edited for clarity and space:
BD: Describe the Hispanic business unit and the scope of your job?
ET: We are a standalone business unit that has a cross-functional, multidisciplinary group of people who are focused on accelerating PepsiCo’s growth among Hispanic beverage consumers. I have a peer who does the same thing for snacks. We’ve got our own marketing teams, sales teams and category management teams that help guide the organization on key insights for the Hispanic consumer, growth opportunities, and how we can influence customers to lean in, and building plans to grow their businesses. Our job is fundamentally Esperanza Teasdale, PepsiCo Vice President, General Manager Beverages, Hispanic Business Unit to help PepsiCo become the most loved food and beverage company amongst Hispanics by being really authentic on how we do it.
BD: Why is such a unit necessary?
ET: There are so many ethnicities within the Hispanic consumer base that approaching them as one monolithic group is not ideal. While there are similar values, there are different cultures. There’s different food, music, and local traditions that make Hispanics much more unique than just saying. ‘Let’s just communicate in Spanish and we got everybody.’ We have multiple cohorts.
PRESERVERS, FUSIONISTAS, AND AMERICAN EMBRACERS.
BD: Is there a difference in marketing to recently immigrated Hispanic consumers compared to second- or third-generation US Hispanics?
ET: We actually have a segmentation that looks at the consumer beyond language, time here and country to understand attitudes and behaviors. On one hand, we have ‘preservers,’ who probably are newer to the country. They’re still very close and ingrained in their culture where they came from. Then on the other side you have these ‘American embracers’ who probably are later generations who’ve been here longer, and who do have some elements of their tradition but they’re really more American. Maybe instead of soccer, they’re really much more into the NFL. Nonetheless, there are some components of their heritage they could still keep. Then in the middle, there are ‘fusionistas,’ who are 100% still in [their Hispanic] culture, and 100% in American culture, and they’re kind of seamlessly working across and preserving both. They’re celebrating where they now live, but then also really pulling forward and continuing to hold on to those traditions that they grew up with.
BD: What is the breakdown of those groups?
ET: So, 26% of Hispanic consumers are preservers. Fusionistas are 43%. American embracers are 31%. Preservers are high Hispanic affinity. Fusionistas are dual affinity. And then the American embracers are high American affinity.
BD: Are preservers and fusionistas likely to buy the same products?
ET: Yes, but the work is different. As fusionistas, reaching them probably is a hybrid of Spanish language and English language. For a ‘preserver,’ you would reach them perhaps with more communication on products that are anchored in their heritage. So, for example, Manzanita Sol is from Mexico, right? But it’s sold in the US and very close to their culture. The key thing is that it’s just different how we would reach them and engage them. That goes back to recognizing that we’re not all the same.
'A LOT OF CONVERSATIONS AROUND LANGUAGE’
BD: Does language introduce added complexity when marketing to different demographic groups within the Hispanic cohort?
ET: The power is in the targeting, and how you reach them efficiently. Digital is obviously a very good tool to tailor your communication based on where you’re finding those consumers. The art and science is that you have to know where they are, and we’ve got some great capabilities internally and help us identify where the most valuable households are for our brands and for our customers so we can be really tailored. For example, I may have a new innovation for which I need to reach Mexican consumers in LA with one language, one visual. But, then, if I’m trying to reach a Mexican consumer in El Paso, it may look different and sound different and maybe it’s more in English and Spanish. So, tailoring is the unlock to being as authentic as possible.
BD: Do you have translators on staff, or do you use agencies?
ET: We have agencies that work with us that are really proficient. We have a lot of conversations around language and words because, again, there are words that have different meanings across different Hispanic ethnicities. You can’t just assume that the way you said something is going to work for someone from Puerto Rico versus someone who’s from Ecuador.
GOAL: GROW HISPANIC BUSINESS FASTER THAN GENERAL MARKET BUSINESS
BD: Have you seen a shift in buying power of Hispanic consumers, and why?
ET: It shifted quite a bit. Latino GDP grew +75% faster than non-Latino GDP from 2010 to 2018. As generations come in and higher education is more of an opportunity, there is more achievement. So educational attainment growth is rapid with the Latino base, and there is very strong labor force participation. So, the more people that are coming in, the more labor there is to continue to help grow the GDP, and obviously that has been relatively fast over the last 10 years. As folks continue to come to the United States and have all those opportunities, then it would be a trend we would expect to continue.
BD: Has PepsiCo’s focus on Hispanic consumers generated results?
ET: For sure. The metric that we use to monitor how our brand equity is tracking with Hispanic consumers is strong. How we monitor growth in the marketplace is strong. So, we’re definitely seeing the business KPIs improving. If you looked at Hispanic growth in the business versus the general market, the goal is to grow faster because the Hispanic population is growing faster.
BD: When you look at a specific PepsiCo beverage brand, how important is it to understand how the Hispanic market relates to that brand or not?
ET: It’s important to understand it as you would any consumer for any brand. What motivates them? What are they consuming? How to engage them, how to fundamentally build the loyalty with them. So it’s really critical and that’s why the Hispanic business units are able to provide the leading insights on the consumer that then can help influence brands like Pepsi, for example, on how do we then craft the right plans in order to help drive loyalty and engagement.
BD: Is it important for the broader Pepsi brand message and marketing to be inclusive of the Hispanic demographic?
ET: What we do with a brand like Pepsi is that we have a key strategic target that’s called the fusionista that is that 200-percenter – 100% their heritage, 100% American culture – that we then include in our overall efforts for the brand. In addition, we have my team dedicated to also deliver communication, innovation and customer plans that then double click on that consumer base. The success relies on recognizing that the fusionista is part of the general market but also recognizing that the other part of them is consuming media or shopping digital that is closer to their culture. You have to include both ways to build the loyalty.
BD: When it comes to product categories and segments, what most resonates with Hispanic consumers in the US?
ET: My team is focused on brand Pepsi, and on brands from home like Manzanita Sol, which is a very authentic Mexican brand. We also influence teams like Gatorade to help share insights on the Hispanic athlete. We’re working on influencing as many of our teams as possible because this economic growth is going to drive a lot beverage growth. The more that brands can do what brand Pepsi does, the more successful we’ll be in the long term.
BD: Does Mtn Dew resonate with Hispanic consumers?
ET: It’s definitely an opportunity, and there are some things that we’re trying to work through. But approaching the Hispanic consumer with a brand like Pepsi is probably more of a priority.
BD: What about energy?
ET: The Hispanic percentage of sales there is pretty high. Our goal would be to help influence the energy team to elevate the insights and the market opportunities, so that they build plans that can then be commercialized to capture some of that growth. Brands like Rockstar are rich in opportunity.
BD: When it comes to sports drinks, what’s the sweet spot for Hispanic consumers?
ET: We’re still working through what the sweet spot is. There are a lot of similarities across the competitive athlete, but there are definitely some nuances. Once you elevate the insights around that Hispanic athlete, including what’s unique to them from an emotional perspective, their story, and their family’s journey, then you start to figure out how to build more equity and elevate the brand above competition.
BD: What do you mean by their ‘journey’ and ‘emotional perspective?’
ET: For the most part, a Hispanic family will have a story behind their process for coming to the US or being in the US and the opportunities that they’re looking forward to. Hispanics in general are resilient and have a lot of perseverance and passion. When you step back and think about the journey that their families may have been on to get to where they are, the idea of Hispanic athlete takes on a completely different frame of mind. Within the Hispanic cohort, there’s so many narratives and stories of positivity and optimism, that that’s the space where the brands that can tap into that and get the messaging right will be set up.
BD: What retail channels are most important when it comes to engaging with Hispanic consumers?
ET: We’ve been studying digital shopping and about 60% of Hispanics were raised during the digital age, which is more than the non-Hispanic population. Hispanics on average are younger. Their reliance on digital and mobile is paramount. That becomes an opportunity, to be digital first. By the way, they live longer, so all this conversation about building brand loyalty is important for building a business that is future proof.
‘HISPANIC ISN’T UBIQUITOUS’
BD: What mistakes do brands make when it comes to focusing on that Hispanic cohort?
ET: Don’t assume that we all are the same, just because we might have a common language. Hispanic isn’t ubiquitous. The right thing to do would be recognize the nuances that drive authenticity. The right thing to do as an advertiser would be to portray the Hispanic consumer in a positive, uplifting and optimistic way. Being consumer centric applies no matter what. That fundamentally helps drive cultural relevance, which then helps drive purchase interest. That formula is proven.
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