Why Brand Authenticity Is Most Important for Hispanic Millennials

Posted by Elena del Valle on March 19, 2016

By Jay Gronlund,

President, The Pathfinder Group

Jay Gronlund, president, The Pathfinder Group

Before the internet, marketers had a relatively free reign for making questionable competitive claims, creating a brand image of superiority and hence demanding a premium price. But the internet has changed the ground rules. Instant access to endless information and objective feedback from friends has enabled consumers to seek and find the truth behind such promises. This has also led to an atmosphere of extensive mistrust of companies, CEO’s and even many established brands, especially among Hispanic Millennials. Today consumers want authenticity.

We are living in an age of growing skepticism and ebbing loyalty for many established brands. A recent poll by Havas, a reputable marketing agency, showed that consumers in America trust only about one fifth of all brands (least trusted – snacks and household gadgets). A report from the research firm, Mintel, indicated that about half of American shoppers trust smaller companies to do the right thing, compared to only 36 percent for large ones. The impact of these changing attitudes is already being felt by major brands. Catalina, a big marketing consulting firm, reported that 90 of the top 100 consumer packaged goods brands lost market share in the first half of 2015.

Smart marketers are realizing that they must change their tactics. Gone are the days when they can just communicate only “half truths” about their brands and offer marketing gimmicks. The ease of learning more about ingredients of personal care and food products, for example, has led consumers to realize that retailers’ own-label products are basically the same as more prominent brands, only much cheaper.

In 2013, the Boston Consulting Group surveyed 2,500 American consumers and found that authenticity was one of the main qualities that would attract them to a brand. Recognizing these alarming attitudinal trends, large companies are trying to re-build authenticity for their brands and stem their declining market share.

For Millennials, authenticity is particularly important. This survey revealed that authenticity was second in importance, only after rewarding their loyalty with discounts and other perks. Another survey found that 85 percent of Millennials want companies to be more “authentic”, as they want to have an “engaging, authentic” relationship with brands.

Authenticity is often described as the quality of being genuine and real, true to its origin. Among Hispanic Millennials, this means true to their culture and so it is even more important. They are very proud of their culture and heritage. According to Pew Research, only 33 percent of second generation Latinos identify as American first; the rest still refer to themselves as Hispanic or Latino first. In short, Hispanic Millennials are Hispanic by choice.

Many Hispanics come from countries where corruption is rampant, so they are very skeptical and sensitive to brand marketing initiatives to sell something without first earning a trustworthy relationship. They value authenticity and will quickly walk away if they spot a phony. They simply want to connect with brands that embrace their culture. So the first step for marketers to build trust and authenticity is to truly understand how their culture helps define the values of the Hispanic consumer.

Three approaches being pursued more to address this decline in trust and authenticity among all consumers, especially Millennials, are storytelling, increasing transparency and emphasizing purity or natural:

• Stories are inherently captivating as they engage, inspire and connect consumers emotionally (scientists call this “neuro-coupling”), plus they provide greater credibility. Whole Foods offers fascinating biographies of the chickens they are about to casserole. Blue Moon beer describes how their creator came up with the idea of garnishing each glass of pale ale with a slice of orange.

• A big issue in the food industry is the growing demand to know about ingredients, especially information about genetically engineered ingredients. Campbell Soup recently announced that they will begin disclosing the presence of GMO ingredients like corn, soy and sugar beets in their products, partially as an effort to become more transparent.

• The demand for natural ingredients is surging, especially among Millennials. Chobani Yogurt just initiated an advertising campaign that highlighted the artificial ingredients of their competitors, compared to its own natural ingredients.

Ultimately this drive toward greater authenticity will force companies to develop more credible benefits that truly distinguish their brands and adjust their pricing to more honestly reflect their value to consumers. For Hispanic Millennials, this also means communicating in a way that reflects a full understanding and sensitivity to their culture and heritage. This will prove to be a boon for all consumers, and hopefully encourage more creative marketing and innovative product solutions from large companies.

Jay Gronlund is founder of The Pathfinder Group, a business development firm specializing in emotional branding, ideation facilitation and international expansion. His background has included executive positions in marketing and new product development at reputable companies in the US and abroad. He is also vice president, managing director of Latin Pulse – USA, a marketing and research firm headquartered in Mexico City. Jay teaches branding at NYU, and has a B.A. from Colby College and MBA from Tuck at Dartmouth.