Latinx influence on American culture is fully on display in many aspects of everyday life. From the food we eat, the music we listen to, the language most of us study in primary school – Latinx culture has entered the mainstream in many ways. Recent examples and trends such as the smashing success of Oscar-winning Coco, which grossed $200M+ domestically and $600M+ internationally, and projections that Latinx-owned small businesses could add $1.4 trillion to the US economy point to a major opportunity.
Latinx immigration began in the late 1800s but didn’t really pick up until 100 years later. As shown below, Latinx has become an increasingly significant portion of the Us population.
With a present-day population of ~59M (or 18% of the population), projections show this figure increasing well into the future, reaching 111M (28% of the population) by 2060. Interestingly, Latinx is a much younger demographic compared to the rest of the country with a median age of 28.7 compared to that national median of 37.8.
Alongside rapid population growth, Latinx spending power has also been on the rise, from $210 billion in 1990 to a projected $1.72 trillion next year. This century, Latinx spending power has grown at 2x the rate of the broader US population.
With this magnitude of spending it’s important to ask: where their time and money being spent?
Latinx consumers are unique in that they represent the largest minority in the US yet a significant portion of this population still faces language barriers. Additionally, cultural factors account for different consumer behaviors relative to the broader population. Brands that leverage these behaviors and authentically communicate with the consumer are poised to benefit.
- Latinx families make more frequent trips to the grocery store, yet lag the average consumer when it comes to e-commerce.
- Latinx has been chronically underbanked in the US. Cultural factors and language barriers make it difficult to receive the same types of financing services that the broader population enjoys.
- Access to food options that allow Latinx consumers to cook Latin American dishes is extremely important yet very underserved. In Falls Church, VA, where I grew up, there are a couple bodegas that fill this need however they charge 20-30% premiums (because they can!).
Mobile / Entertainment
- Latinx use their mobile devices to stream videos significantly more and for many this is the preferred medium of consuming video
- Latinx spend far more time on social media on average than the broader consumer base. Latinx families (both immediate and extended) are traditionally very close and take full advantage of social media and messaging apps to stay in touch.
With this significant and growing buying power and consumer behaviors in place, I wondered what the startup landscape looks like for startups directly or indirectly targeting Latinx.
Quite frankly, I was very surprised how difficult it was to find companies. I’m certain I am missing a bunch – if you know of any please let me know! I intend to update this here as I come across more companies.