To counter its slow U.S. revenue growth, Procter & Gamble (NYSE: PG ) plans to capitalize on the growing Hispanic population. According to The Wall Street Journal, the company is looking to focus more on Hispanic shoppers by modifying its products and bringing new brand ambassadors onboard. Let's dive into the details.
The Latino way
According to the U.S. Census Bureau, more than half of the U.S. population gain in the decade ending in 2010 consists of the Latino demographic. Their families tend to be larger and younger than average, and that's good news for the maker of Pampers, Charmin, and Bounty. According to Hispanic Business magazine, Hispanic shoppers had nearly $1 trillion in spending power as of 2010, and that figure is expected to rise to $1.3 trillion by 2015.
This trend is too big to have gone unnoticed, though, and when it comes to personal products, P&G isn't the first one to the party. Colgate-Palmolive (NYSE: CL ) , for example, has a better foothold in the Latin American market for items such as toothpaste. Clorox (NYSE: CLX ) , too, has had its ear to this market for years. It's spent heavily on ads in Hispanic media outlets, and it recently partnered with the Hispanic Scholarship Fund. Even spice maker McCormick (NYSE: MKC ) has enjoyed a good deal of success over the past 20 years by focusing on this market.
Star power
P&G is looking to put new fragrances in its air fresheners, fabric softeners, and dish soap to make them more appealing to this demographic, with scents sporting names such as "Brazilian Carnaval" and "Apple Mango Tango." It's launching a new website aimed at Hispanics, and it's also hired Latin superstars Jennifer Lopez and Eva Mendes as spokeswomen. Lopez will be the new face of Venus razors, while Mendes will be the representative for Pantene shampoo. Having these two highly recognizable faces at the helm should boost sales of their respective products.
The Foolish bottom line
P&G needs to correct its sluggish U.S. sales, and the focus on the Latino demographic should help. Just how well it will do, of course, remains to be seen. To stay up to date, add P&G to your Watchlist.
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