Companies like Bally Total Fitness (NYSE: BFT), Coors (NYSE: RKY) and Hershey Foods (NYSE: HSY) are just a few of the U.S. businesses that have set their sights on a share of the booming Hispanic consumer market.
According to U.S. Census figures provided by the San Diego County Hispanic Chamber of Commerce, both the population and businesses owned by Hispanics are on the rise.
In 1990, the region's Hispanic population totaled 510,781. The 2000 Census raised the number to 750,965, or 26.7 percent of the county's total population. It is expected that number will reach 33 percent in 2020. And, there are more than 30,000 local businesses owned by Hispanics, generating more than $6 billion in sales.
"Currently, the service sector leads all other industry segments in overall concentration and numbers of Hispanic-owned firms," said Juan Solana, co-author of a new study of the entrepreneurial trends in the Latino community. The study predicts that the number of U.S. Hispanic businesses will increase 7.6 percent annually through 2010. Projected revenues from these companies will surge 70 percent to more than $465 billion.
The vast majority of the Hispanic businesses -- like the overall trend in businesses nationwide -- are new and developing companies. That has led to a new relationship between the Small Business Administration and the U.S. Hispanic Chamber of Commerce. The alliance is an effort to provide more resources, education and training services to new businesses.
Overall, SBA loans to minority businesses rose to record levels in the recently completed federal fiscal year. In particular, loans to Hispanic businesses rose by 31.7 percent over the previous year.
"We have worked hard to reach out to every community, and we are seeing the fruits of our labor with these numbers," said Hector Barreto, SBA administrator. "Capital is the lifeblood of small businesses and every time we approve a loan, that means another small business has a chance to grow and contribute to the economy."
Of course, as the Hispanic population and business communities grow, so does the demand for other products and services. In particular, a number of new programs have been launched to increase homeownership by Hispanics.
The California Association of Realtors and the National Association of Hispanic Real Estate Professionals are just two of the groups striving to raise the number of Latinos that own a home. In California, just 43 percent of the Hispanic population own homes, compared to a 76 percent rate for the overall population.
"We are excited that these industry leaders are working collaboratively to address key barriers to homeownership and to help more Latino families achieve the dream of homeownership," said Craig Nickerson, vice president of expanding markets for Freddie Mac (NYSE: FRE).
"Central to the initiative is the recognition of the challenges to homeownership Latino families often face, including language and cultural barriers, nontraditional credit and a lack of experience with the home buying process," said Nickerson.
California National Bank is one institution that has stepped up its marketing toward Hispanics. The company recently opened a Spanish-speaking branch in Marywood, Calif., providing a full variety of financial products and services. In addition, the branch administers a matching grant program for first-time homebuyers, providing qualified applicants with up to $5,000 in grant funds to use as part of the down payment.
"Purchasing your first home is a complex process," said Yovani Flores, vice president and branch manager. "It is especially intimidating for non-English speaking individuals. Spanish-speaking bankers and Spanish language products, services and training provide Hispanic customers with an opportunity to make informed decisions."
Chamberlin's financial analysis column appears each Monday in The Daily Transcript. Chamberlin also reports daily on stocks and local business on NBC 7/39 and on "Money In The Morning" on KOGO 600 AM.