Mars is targeting the Latino market in the US with Dulce de Leche flavor M&Ms. Despite the growing importance of the Latino population, Mars may find it tricky when it comes to manufacturing and marketing the new product. Authenticity is the key to satisfying ethnic consumer groups. Yet, to drive mainstream penetration, Mars will have to reduce the product's authenticity to appeal to the general audience's more limited palate.

US confectionary giant Mars is trying to replicate the success of Dulce de Leche flavor into ice cream by becoming the first major company to offer the flavor to the market in candy form. The candy features a swirl of chocolate and creamy Dulce de Leche caramel coated with M&M's traditional hard candy shell. Initially available in Los Angeles, McAllen-Brownsville, Miami, San Antonio and San Diego, the product will be supported with a $5 million advertising campaign targeted specifically at Hispanics.

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Mars is not the only company to tap the burgeoning ethnic population. Manufacturers across the consumer packaged goods industry have started to realize the enormous potential of targeting specific ethnic groups. A prime example is L'Oreal's acquisition last year of number one ethnic hair and skincare company Carson, which had worldwide sales of $176 million in 1999.

This trend will only accelerate in the future. Recent US Census figures show the Hispanic population grew by 57.9% from 1990 to 2000. By 2010, Hispanics will account for nearly 15% of the US population. Their purchasing power is also expected to increase significantly - according to a University of Georgia survey, Latino purchasing power will top $450 billion in 2001, a 118% increase since 1990.

Tapping Latino consumer groups can certainly be lucrative, since as well as being the fastest growing ethnic group Hispanics tend to be more 'brand loyal' than average. However, manufacturers should not ignore other minority groups. Retail sales of ethnic foods are currently $15.5 billion and Datamonitor expects this figure to grow faster than that of overall food spending.

Striking a balance between opposing preferences among ethnics and non-ethnics will be the determinant in achieving mass penetration of Dulce de Leche Caramel Chocolate Candies. Regardless of the many obstacles, consumer packaged goods companies such as Mars can no longer afford to ignore the growing importance of ethnic groups not only because of their growing size, but also because of their influence in changing Americans' tastes.

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