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The African-American Food Dollar

Where it goes and how to get a piece of it.

They are every operator’s dream: loyal customers who enjoy trying new cuisines and who are receptive to advertising messages. The demographic? African-Americans. What’s more, their population is 39 million and growing. Researchers at Packaged Facts, a Maryland market research firm, estimate the U.S. African-American population will increase 15 percent, to 41 million, in the next four years.

More than half of African-Americans live in the South. And they’re a major force in the largest American cities: about one of every five people living within the boundaries of a major metropolitan area is African-American, according to Packaged Facts.

This group also tends to be young. Chicago research firm Mintel reports that the average African-American was 31 in 2006, while the average white was 40.5 and the average Hispanic was 27.4. And although African-Americans’ median household income is relatively low—about 70 percent of the median non-African-American household income, according to Mintel—a significant subset is quite affluent.

Indeed, with an average annual income of $122,000, affluent African-American households represent just 17 percent of all African-American households. However, they wield 45 percent of the total African-American buying power, according to Packaged Facts. These consumers tend to be highly educated urbanites who own their own homes.

Currently, however, African-Americans spend less of their household budgets on eating out than do other consumers, according to Packaged Facts. Sarah Burroughs, senior vice president of operations at E. Morris, a Chicago firm that specializes in advertising to African-Americans, says the relatively low incidence of dining out springs from two factors: African-Americans see home cooking as very important, and the bitter aftertaste of Jim Crow laws, which segregated restaurants and other establishments, still lingers for some, she says. “In my lifetime, there were restaurants I couldn’t go into. That fact does color attitudes even today,” says Burroughs.

However, African-Americans who do visit restaurants tend to do so more frequently than other consumers. Packaged Facts cites data from Simmons NCS showing that although African-Americans are less likely than other consumers to visit family restaurants (75 percent versus 82 percent), African-Americans who do go to family restaurants are more likely to be frequent users (visiting six or more times in a 30-day period).

This trend is even more pronounced when it comes to fast food. African-Americans are only slightly more likely than other consumers to visit fast food restaurants (87 percent versus 85 percent), according to Packaged Facts. But they are nearly twice as likely (27 percent versus 14 percent) to say they have visited fast-food restaurants 14 or more times in the last 30 days. “I suspect those trends are driven by the urban lifestyle,” says Bob Brown, co-author of the Packaged Facts report “The African-American Market in the U.S.” “They might also have something to do with priorities of African-American women—how much time they have, and what they’re able to do in their daily life.”

If you’d like to attract more African-American consumers to your concept, the most important thing to understand is that, just like any other large demographic group, African-Americans are extremely diverse. “My 27-year-old daughter, for example, is as different from me as night and day,” says Burroughs. “She chooses brands differently, and she identifies with brands differently. You have to take those differences into account.”

Mintel’s report, “Black Americans’ Shopping and Spending Patterns,” suggests, however, that African-American consumers are far more alike than they are different: “Black Americans share many beliefs, lifestyle attributes and preferences, indicating that efforts to communicate fluency in black culture do not generally need to be tailored to sub-groups (e.g. the affluent vs. the poor).” The report goes on to say, “Portrayals of black life in advertisements and other collateral should generally focus on the lives of middle-class blacks, who tend to exhibit some attributes common among affluent blacks (e.g. interest in technology), and others that are more commonly seen among the poor (e.g. church).”

But don’t just sprinkle black actors among the cast shown dining in your TV spots. That’s according to Al Anderson, who in 1971 founded Anderson Communications, his Atlanta agency, to specialize in marketing to African-Americans. “Almost every ad for a restaurant chain shows black and white couples hanging out together at a restaurant,” says Anderson. “That is the extent of the restaurant’s attempt to address diversity in marketing. But the reality is that black and white couples do not socialize with each other in large numbers. Presenting a fake reality is worse than making no effort at all.”

Anderson says McDonalds—not surprisingly—is the “gold standard for ethnic marketing.” The chain has separate agencies for each ethnic market, as well as for the general market, but they all work together. “Strategically and tactically each agency goes off in different directions, but they’re all working toward the same objective,” says Anderson.

Whether you choose to target African-Americans directly, perhaps by advertising on urban-format radio stations, or simply broaden your general market campaign, pay attention to words that may inadvertently offend. Burroughs, for example, remembers a dish detergent ad that talked about “preserving your peaches and cream complexion.” “That just doesn’t work for most people I know,” she says.

Bear in mind, too, that community outreach is key with this segment. Anderson notes the example of a QSR chain that developed a promotion in conjunction with the United Negro College Fund. “You can’t just write checks—you have to creatively engage the community,” he says. “That promotion showed the consumer that these folks are interested in our concerns about education and helping our young people.”             

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