The challenge for businesses, of course, is to figure out the best way to cater to the growing numbers of Hispanics, Asians, Muslims, and the fastest-growing group of young Americans, the 4.2 million under 18 who call themselves multiracial. Even playing to the African-American population—which demographers expect to remain fairly stagnant in terms of its numbers over the next few decades—will require corporations to shift strategies, as blacks increasingly leave cities for the suburbs and gain buying power.
No longer can American businesses get away with chasing a single group of consumers—that is, whites. Large or small, white- or minority-owned, corporations will need to create new products and pursue segmented marketing strategies. “The idea of the mass market,” Deshpandé said, “has disappeared.”
Corporate America should have noticed a red flag in 1980. It was in preparing for that year’s census that government officials coined the term “Hispanic” as a category for the burgeoning number of U.S. residents who trace their roots to Spanish-speaking places.
Thirty years later, 50 million-plus Hispanics were living in this nation of over 308 million souls—43 percent more than just a decade before. The number of Asians also jumped by 43 percent, to nearly 15 million. The only major racial group to see its share of the population decline was non-Hispanic whites, from 69 percent to slightly less than 64 percent of all U.S. residents.
Businesses that hadn’t been paying attention were caught off guard. “The  census numbers woke up a lot of folks,” said Phil Colón, a former marketing executive at Coca-Cola North America who’s now CEO of Project 2050, a multicultural marketing firm in New York. “It’s freaked out big brands.”
A handful of corporations, such as Procter & Gamble and McDonald’s, have courted Hispanic customers for years. But for the late bloomers, last year’s census provoked “a feeding frenzy on marketing to Hispanics,” according to Jeanne Vaughn, a former executive at GlobalHue, a multicultural advertising firm with offices in New York City and Detroit. “Companies are all trying to suddenly rush in and do something.”
No longer can American businesses get away with chasing a single group of consumers—that is, whites.
No wonder: There’s plenty of money to be made. Last year, according to the Selig Center for Economic Growth at the University of Georgia, Hispanics controlled $1 trillion of the nation’s $11 trillion in buying power, a leap of 108 percent since 2000; they are expected to control $1.5 trillion by 2015. Much of the wealth is concentrated in a few states—notably, California, Colorado, Florida, New Jersey, New Mexico, New York, and Texas. The buying power of other racial and ethnic minorities also rose dramatically during the past decade. The white majority’s buying power grew by 49 percent since 2000 (adjusted for inflation), the Selig Center estimated—less than Asians’ 98 percent or African-Americans’ 60 percent.
This power, naturally, has prompted new consumer demands. Hispanics spend less of their money on alcohol, tobacco, health care, entertainment, and education than do non-Hispanics, according to the Selig Center’s research; they spend more instead on groceries, apparel, and phone services. African-Americans, meanwhile, tend to spend a relatively large share of their incomes on housing, gasoline, phones, footwear, and children’s clothing. Hispanic families also tend to be larger, with twice as many children under the age of 18 in the household than non-Hispanic families. Because of these differences in demographics and taste, companies must adjust their product lines—and use their marketing savvy—to peddle their wares in each disparate, ever-more-inviting submarket.
SEEKING AN ETHNIC MICROSOFT
In this nation of immigrants, demographic submarkets are nothing new. The B. Manischewitz Co. began baking its Passover matzo in Cincinnati in 1888, and today’s company continues to corner the market on cloyingly sweet kosher wine. Then there’s Rao’s, another ethnic business that’s gone national. The Italian-American company started out in the late 1800s as a New York City neighborhood restaurant run by successive generations of a large immigrant family. But in 1977, a gushing restaurant review in The New York Times turned it into one of the hottest reservations in the Big Apple—and, shockingly in fickle and fast-moving Manhattan, it still is. Rao’s has also opened a second restaurant in Las Vegas and has expanded its business to shipping specialty foods—extra-virgin olive oil, roasted eggplant Siciliana sauce, and the like.
But how can we identify, here in the early 21st century, the emerging Microsoft of a soon-to-be majority-minority nation? Look for a company that, after catering to a demographic submarket, finds its consumer base broadening.