NEW YORK: Multicultural consumers are the most dynamic and fastest growing segment in the US consumer economy and are on course to become a majority of the population by 2044, a new report has stated.
Already with a collective spending power of $3.4 trillion, multicultural consumers are younger, comprise 38% of the US population, consume a disproportionate share in many product categories, and their spending habits can influence other groups.
These are some of the key findings in the Multicultural Edge: Rising Super Consumers report, published by research firm Nielsen.
It said American multicultural shoppers – defined as those from African-American, Asian and Hispanic ethnic backgrounds – have what the report calls an "ambicultural identity", or the ability and willingness to maintain their cultural heritage while simultaneously being equally American.
Cultural identity is very important for African-Americans (78%) and Hispanics (71%), the report asserted, while adding that social causes are particularly important for Hispanics (43%).
Cultural identity is not just important in itself but also because multicultural consumers are drawn to brands and products that reinforce their cultural roots and their purchase behaviour can influence other consumer groups.
Hot sauce, for example, has now become a mainstream condiment while other food products are becoming as "ubiquitous as apple pie and hot dogs".
But the influence of multicultural consumers is not limited to particular goods. They also comprise a disproportionate share in many categories, including dairy, detergents, school supplies and other family goods – in part because of their younger age profile.
Nielsen said that the younger average age of multicultural consumers meant they have more "effective years of buying", CNBC reported.
According to the report, the median age for non-Hispanic whites in the US is 42. That compares with 32 for African-Americans, 35 for Asian-Americans and 27 for Hispanics.
One other aspect about the younger age profile to consider is that multicultural consumers make up a relatively high proportion of the sought-after millennial generation.
"Organisations are so focused on millennials, but how can we speak about millennials without looking at the multicultural quotient?" asked Vanna Tran, senior manager of multicultural growth and strategy at Nielsen.
Data sourced from Nielsen, CNBC; additional content by Warc staff