March 1, 2018
With African-Americans spending about $1.2 trillion annually, brands have a lot to lose if they do not make a special effort to appeal to this demographic, based on findings of a poll released on February 15 by Nielsen.
Black consumers and consumers of color, alike, often represent more than 50% of the overall spending in key product categories. For example, half of the total spend ($941 million) on dry grains and vegetables in the United States in 2017 came from consumers of color. And specifically, Black consumers represented $147 million of the total spend in this category, which has recently made advances in product creation to meet the demands of diverse buyers.
Among the other categories in which diverse consumers are making inroads are:
- Baby food, with $817 million spent last year by consumers of color out of a total spend of $1.9 billion, or 43% of the market;
- Personal soap and bath products ($1.3 billion out of $3.04 billion, or 42%);
- Fresheners and deodorizers ($774.1 million out of $2.02 billion, or 38%); and
- Shelf-stable juices and drinks ($2.3 billion out of $6.2 billion, or 38%).
Not so surprisingly, African-Americans have cornered the ethnic hair and beauty market, ringing up $54 million of the $63 million total industry spend in 2017. However, Black consumers aren’t just spending on products created specifically to appeal their own demographic.
In fact, in terms of dollars, this group spent considerably more money in the general beauty marketplace last year. Black shoppers spent $473 million on total hair care (a $4.2 billion industry) and made other significant investments in personal appearance products—such as grooming aids ($127 million out of $889 million) and skin care preparations ($465 million out of $3 billion).
African-Americans make up 14% of the U.S. population but have outsized influence over spending on essential items bottled water ($810 million or 15% of overall spending) and refrigerated drinks ($587 million or 17% of total spending).
“Our research shows that Black consumer choices have a ‘cool factor’ that has created a halo effect, influencing not just consumers of color but the mainstream as well,” said Cheryl Grace, Nielsen SVP of U.S. Strategic Community Alliances and Consumer Engagement. “These figures show that investment by multinational conglomerates in R&D to develop products and marketing that appeal to diverse consumers is, indeed, paying off handsomely.”
“When it comes to African-American consumer spend, there are millions, sometimes billions of dollars in revenue at stake,” said Andrew McCaskill, Nielsen SVP of Global Communications and Multicultural Marketing. “With 43% of the 75 million Millennials in the United States identifying as African-American, Hispanic or Asian, if a brand doesn’t have a multicultural strategy, it doesn’t have a growth strategy.”
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