How to Capture the $1.5 Trillion Spending Power of Cinco de Mayo

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Cinco de Mayo is becoming a major marketing opportunity for U.S. startups. In 2015, Hispanic consumers were projected to shell out $1.5 trillion, a 50 percent increase from 2010, according to data from Nielsen.

Still, it's important to be strategic and artful in your advertising. Otherwise, you may risk making a costly gaffe.

The holiday, which falls on May 5th, commemorates the Mexican Army's victory over French forces at the Battle of Puebla in 1862. Over the years, it has become a major sales platform for many restaurants, retailers, and liquor brands in the U.S. Cinco de Mayo is thematically appropriate for smaller companies, insofar as the Mexican troops were outnumbered by the French yet still ended up claiming victory.

"Cinco de Mayo is part of the Latino experience of the American Civil War," said David E. Hayes-Bautista, director of the Center for the Study of Latino Health and Culture at the School of Medicine at UCLA, in an interview with Time. 

Corona and Modelo, two leading beer makers owned by Constellation Brands, have a long history of capitalizing on the holiday. Last year alone, Corona sold more than 145 million bottles of Corona Extra in the two weeks leading up to and following May 5th, accounting for 51 percent of all Mexican import sales in the U.S. during that time.

"We consider Cinco to be the 'kickoff' to our summer selling season, which is typically the busiest time for our business," said Jennifer Dohm, a spokesperson for Constellation Brands. The company, which produces and markets wine, beer, and spirits, has an impressive portfolio of brands that includes Corona, Modelo, and Casa Noble Tequila. Overall, Constellation's beer business gained a full point of share around Cinco de Mayo last year.

This year, the company ran a series of television ads leading up to the holiday, including a Corona Extra spot prompting consumers to "get ready" to celebrate. On social media, Corona launched its first ever "Lime Drop" campaign, aimed at generating more awareness for the brand. To participate, users simply follow Corona on Facebook, Twitter, or Instagram, take a creative photo that somehow relates to citrus, and tag the photo using the hashtag #LimeDrop at 5:55 p.m. on May 5th. The company also tapped singer and actor Diego Boneta to join the campaign and encourage others to participate.

Elsewhere, major restaurant chains are offering Cinco de Mayo discount deals, including Bahama Breeze, Carl's Jr., Chili's, Margaritas Mexican Restaurant, On the Border, Sonic, Taco Bueno, Taco Time, T.G.I. Friday's, and Tijuana Flats. Chipotle, in an effort to boost its image on the heels of a nationwide contamination crisis, is offering $50 off catering.

Avocados From Mexico, a produce trade group, says it saw "untapped potential" in Cinco de Mayo. The company plans to appear on ABC's Good Morning America on Thursday, its first themed segment on a national morning show.

"Really associating our brand with the holiday really makes sense for us," said Kevin Hamilton, the director of brand marketing with Avocados From Mexico, in an interview with Ad Age. "What we need to do is tell America about the product and the brand and how we fit in with Cinco de Mayo."

In addition to the television slot, Avocados From Mexico has partnered with three New York City food trucks to give out free food made from avocados. As part of an ongoing social media campaign, the company reached out to influencers to ask them how they #GuacIt on Twitter, Facebook, and Instagram. It's also running a $5,000 sweepstakes for sharing guacamole recipes, in partnership with Tabasco, and inked a deal with Qdoba to create a Cinco de Mayo-themed music playlist.

Independent businesses nationwide are getting creative, sponsoring "human cockfighting" (exactly what it sounds like), or rolling out innovative cocktails such as the Tequila Sidecar. UberEats, the ride-sharing giant's recently launched, on-demand meal service, has cryptically announced that it's "mixing up something special" for the holiday.

Keep in mind, however, that you need to be culturally sensitive--especially when making an effort to drive sales. Remember that Cinco de Mayo is a Mexican holiday, not a pan-Hispanic one, and that common tropes are often viewed as offensive.

Victoria's Secret, for instance, showed how not to promote Cinco de Mayo in 2013, when it retailed a line of T-shirts with such phrases as "I know the guac is extra" and "Let's no taco 'bout it." Customers were quick to lambaste the move on social media, with some calling the shirts "garbage" and "disgusting."

Rochelle Newman-Carrasco, the chief Hispanic marketing specialist with Walton Isaacson, warns companies not to "co-opt" Cinco de Mayo and Day of the Dead, which belong to a specific culture.

"You celebrate by looking at how you can put your brand into the lifestyle of those who are creating, like local artists or independent filmmakers," she advised. "There's nothing worse than taking something you don't understand and messing with it on a commercial level."

By Zoe Henry