NEW YORK, NY — Hispanics have become the most important
U.S. demographic growth driver in the food, beverage and restaurant sectors,
according to data presented by Latinum Network during the Sanford C. Bernstein Investor conference call today.

The U.S. Hispanic segment made up more than 50% of real growth in the midst
of a stagnant U.S. consumer economy between 2005 and 2008, with $52 billion
of new inflation-adjusted Hispanic spending outpacing $40 billion of new
spending by non-Hispanics. This growth can be attributed primarily to an
increase in the number of U.S. Hispanic households, and secondly to an
increase in consumer spending among U.S. Hispanics. In the food, beverage
and restaurant business, this new spending offset most (84%) of the real
decline in demand across the entire $1 trillion sector. This divergence in
demand is driven mainly by differences in ethnic preferences, economic and
cultural integration, and demographics.

Among Latinum’s key findings:

— Over $9B of new value in Food and Beverage was created by Hispanics in
otherwise dormant or declining categories such as fish and seafood,
fresh fruit juice and dairy products between 2005 and 2008

— $5.9B of new value was created by Hispanics in growing categories
where they represent approximately 20% of the growth such as vegetable
juices and fruit drinks, meats including pork, ham and mutton and
frozen meals, which represent the highest-growth food category among
Hispanics. It appears that busy Hispanic professionals are
increasingly turning to frozen meals to feed their children.

— While health & wellness trends reduced non-Hispanic consumption of
beef, ethnic preferences buoyed Hispanic buying of beef

— Hispanics are eating out more while others are cutting back, driving
growth in fast food and full-service. In particular, Hispanics are
increasingly likely to eat out during the work day, driving new sales
in fast-food breakfasts and full-service lunches

— The increasing rate of Hispanic home ownership is driving growth in
household goods, while non-Hispanics are doing the opposite – reducing
real estate holdings and their purchase of household goods

— Hispanic teens are driving the majority of new growth in deodorant and
feminine hygiene and at least 20% of growth in cosmetics and shaving

According to Alexia Howard, Senior Research Analyst-US Foods at Sanford C.
Bernstein, “With total U.S. Hispanic household spending expected to top $1
trillion by 2013, and emerging markets around the world (such as China or
India) fraught with political risk and hidden costs, institutional investors
have a unique opportunity to look homeward. We see the growth in food,
beverage and restaurants here as a particularly interesting opportunity for
our investors. Especially with the relative stability of Hispanic
demographics, this growth can be reliably predicted through 2050.”

Says David Wellisch, co-founder and principal of Latinum Network, “Clearly,
U.S. Hispanics represent a growing market in the midst of a mature U.S.
consumer economy, but in order to win over this important demo, brands must
make an authentic appeal to the unique behaviors and tastes of U.S.
Hispanics through distinct products, channels, messaging and marketing

For example, while younger Hispanics have higher levels of English
proficiency and economic achievement due to having more education than their
older counterparts, Spanish usage and preference remain high as consumers
acculturate, giving companies expanded options for in-language and
multichannel advertising and marketing strategies which appeal to a broader
portion of the market.

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