SPECIAL REPORT: The Changing Face of the Urban Markets
The Museum of Public Relations.
This report appeared in a 1962 issue of Food Business
Negroes are emerging as a major segment in the total city scene -- in the big food dollar markets. They spend heavily on national brands, rarely private label.
The outstanding fact about the Negro market today is its emergence from the very framework of a "minority market" and its rapid development as a major economic force in the major cities of the U.S. This is happening through a sort of economic gerrymandering process whereby Negroes, who make up 10.5% of the U.S. population, are concentrating in the big cities -- where this percentage is more than doubled: Negroes today comprise more than 25% of the aggregate population of 78 major cities -- primary markets where about 2/3 of all retail sales are made and where most sales efforts are concentrated.
A more-than-25% slice of 78 major markets of the country hardly qualifies as a "minority." It's enough to make or break most sales efforts. For food marketers, the growing urban Negro market segment offers special enticements:
A STAFF REPORT
Location of the Negro market in 1962 is the big reason why this market is taking on a new significance. It isn't a primarily southern market anymore. The 1960 census shows that slight more than half of the nation's 19 million Negroes live outside the old south (the 11 Confederate states) and more are moving out all along.
But it's not just a migration northward; it's a migration to the big cities all over the country. More than half of all Negroes live in 78 cities -- more than 1/3 the total live in the 25 biggest cities alone. The effect of this concentration has been enormous -- Cleveland, 28.6% Negro; Chicago, 22.9% Negro; Houston, 22.9% Negro; Philadelphia, 26.4% Negro; Washington, D.C., 59.3% Negro.
But what exists today is only half the drama. The other half comes when present migratory trends have more time to develop. Professor Donald J. Bogue, population expert at the university of Chicago, forecasts that by 1975 -- a scant 13 years from now -- Chicago, now 22.9% Negro, will be more than 50% Negro. And there are a number of cities -- New Orleans, Detroit, Cleveland, Atlanta, Memphis, St. Louis, Philadelphia -- that have a higher percentage of Negroes today than Chicago does and could theoretically become primarily Negro sooner.
How fast this population change can work shows up in figure for Washington, D.C. In 1950, the city was 34.5% Negro. In 1955 it was 42.5%. By 1960 it was 53.9%.
But percentage figures alone don't tell the whole story. New York City for example, is only 14% Negro today. Yet the Negro population of New York City -- more than 1 million -- is more than equal to the sixth largest city in the country.
Obviously, what has occurred is that urban white populations have moved in droves to the suburbs and Negroes are taking up the void in the cities. But not so obvious is the resulting paradox in food marketing strategy in the big cities: Food marketers still approach the big cities with sales appeals that are almost entirely directed , at least subconsciously, to white population -- while the population itself is becoming less white, more Negro. The result is badly misdirected that may explain some of the chronic profit griefs food marketers complain of. Downtown department stores long ago perceived the Negro's role in the profit picture. To date, relatively few food marketers have.
Purchasing power of the Negro market is what makes the market's geography so important. The Negro's annual dollar spending is currently pegged at about $20 billion -- roughly equal to the entire purchasing power of Canada. Of this, Negroes spend nearly 20% ($3.75 billion) in food stores. (The population as a whole also spends about 20% on food, but this includes spending in restaurants where Negroes spend very little.) There are several statistical reasons why the Negro is an exceptionally important food store customer:
Reasons for this extra spending on food include the fact that 50% more Negro wives work than white wives, plus the fact that social barriers prevent the Negro from spending much at restaurants, on homes, in travel, etc., where whites can and do spend freely. The point is, the extra money Negroes spend on food is a relatively stable factor for food marketers to consider. Beyond this point, national statistics become less important -- if not downright misleading to food and beverage marketers. A classic instance: Among whites, the primary market for scotch is in the $8,000-and-above income group. The median income for Negro families is only about 50% of the white family median, so scotch would seem to find only a small market among Negroes. But as a matter of fact, it is estimated that Negroes buy about 40% of all the scotch consumed in the U.S.
Even that national figure of family median incomes at 50% of whites obscures the fact that Negro family incomes average about 80% of white family incomes in such key markets as Chicago, Detroit, Los Angeles, New York, Washington and San Francisco. (There are, incidentally, a few towns -- Saginaw, Mich., and Johnstown, Pa. -- where Negro median income is reported to be higher the white family income.)
The lesson here is that white income-consumption relationships can't be applied to the Negro market. Neither can national statistics about Negroes offer any real guide to local markets where market potentials have to be measured and sales efforts made. The Negro market requires evaluations for each local market being considered. This is particularly true of food.
(insert chart, see article)
What Negroes buy in the way of food and beverages varies from white preferences in several significant ways. "Where many food marketers and grocery retailers are losing business from the Negro," Ebony publisher John H. Johnson told Food Business, "is in adjusting the stocks of grocery stores in the neighborhoods that have become, or are becoming, primarily Negro neighborhoods. This change means different customers with different tastes to be satisfied." Johnson estimates that as much as 10% of a supermarket's shelf space would be affected by a proper reallocation.
The differences in stock would be in five areas:
Exactly what food items are involved? Here is an alphabetical list of some food store commodities and the percentages by which Negro percentages of them exceeded white purchases, based on a study in Memphis in the last half of 1960.
Fresh meats and poultry, key items in most food stores, are also areas of major variation between white and Negro preferences. According to Department of Agriculture consumption figures, the Negro household consumes 3% more meat of all descriptions by weight than the white family, 6% more chicken and turkey by weight. The most important single meat: pork. Negroes eat 3.5% more pork by weight than all whites. Bread is another key staple which Negroes eat more of, about 15% more.
Convenience foods are important, largely owing to the greater percentage of Negro wives who work than white wives. Negro families buy 26% more frozen vegetables than the white family, 22% more prepared flour mixes, 20% more refrigerated biscuits (a very important item on the Negro family table)
Beverage consumption by Negroes is vastly different from the white population. They use less coffee and tea than the white family. But they consume 41% of all the fruit ades sold in the U.S. Alcoholic beverages are very big in the Negro market -- more than 90% of urban Negro households regularly drink or serve some kind of alcoholic beverage. Of these consuming households, 87.5% regularly serve beer, according to Johnson Publishing Co. research. Brand preferences? Heavily in favor of the big 5 national brands that have strong quality images -- .and strong marketing efforts aimed at Negroes.
Then there are the food specialties Negroes like that aren't normally stocked for white consumers outside of the south. Most of them are southern food preferences -- hominy grits, black-eyed peas, okra, mustard greens, hamhocks, chitterlings, etc. Chitterlings (i.e., "chittlins" -- smaller intestines of pigs, usually fried or boiled) are one of the delicacies many Negroes gave up when they came north, partly because there was almost no supply of them and partly many associated chitterlings with the old days they'd rather forget. But chitterling marketers have adjusted to this situation, are now promoting chitterling hors d'oeuvres in the north and winning new acceptance for the product.
A key difference between white and Negro food preferences is the Negro's special demand for the quality image and the quality product -- ultimately the national brand rather than private label. Reason for this is the Negro's determination to enjoy the symbols of status wherever he can, whatever the price. According to Ebony publisher Johnson, the Negro is quicker to consider the quality image than the white. He allows the price factor to determine only the quantity bought. "If you want to epitomize what the Negro wants in food products," Johnson told Food Business, "it's the quality item out in the large economy size. The Negro market, therefore," Johnson added, "is a market for the national brands, not the private labels."
Negro brand preferences within the different commodity groups may in some cases vary considerably from white preferences, also requiring a change of emphasis in shelf space locations. A big factor here that doesn't affect the white consumer is the extent to which the different brands are merchandised specifically to the Negroes, discussed further in this report.
On the other hand, there are some commodities that are less popular among Negro families than white. Cheese is an example. According to department of Agriculture figures, Negro families consume about 30% less cheese than white families
One entire commodity group that is less important with Negroes than whites is the group of products oriented to dieting. Unlike whites, most Negroes still do a considerable amount of physical work and are consequently less plagued with the overeating problem.
Marketing to Negroes is, as most people in the business know, a fairly ticklish and demanding operation. There's no need to summarize here the social history that has produced the special demands of the Negro market, except to state the resulting fundamental of marketing to Negroes: The Negro seeks recognition, in commercial affairs as in the other areas of life. Only part of this job is conventional advertising. The other part, more important in the Negro market than usual, is in public relations. It isn't just the advertising face marketers hold up that Negroes look at. More and more, these days, it's the social recognition of publicity work that's important -- including the food marketer's own employment practices.
In this situation, advertising takes on a special function in the Negro market. It is a means of displaying recognition of the Negro
This is actually the identification factor that applies in all advertising to some extent -- but with Negroes it's infinitely more important than whites.
How much more effective is the message in a Negro medium? Daniel Starch & Staff concluded from a recent study of this that Negro readership of an ad is 40% higher when it appears in a Negro medium than it is in other print media. This advantage works for ads in the Negro media whether or not models are used at all and whether or not Negro models are used. But the obvious fact is that Negroes identify with Negro models much more that with white models and therefore the Negro model is more efficient in terms of the recognition purpose. Negro models, available in most cities of the country, are mainly used for the fast-expanding Negro point-of-purchase business and for outdoor posters -- to a lesser extent for print media, which are relatively few.
The media situation in the Negro market is vastly different from the general media line-up. Radio is the largest single medium, with an estimated 600 stations throughout the country transmitting at least a large percentage of their broadcasts to Negroes, and this number is increasing at the rate of about 10% a year.
Negro Radio is now widely used by food marketers. But Pet Milk has just started something new with a 15-minute syndicated show called "Showcase," produced by Gardner Advertising in conjunction with Johnson Publications. The program, being aired 3 times a week in major markets of the country, is a variety program with subject matter of special interest to Negroes. Interviews with prominent Negroes will be a major ingredient of the show. "Showcase" is believed to be the first program of its type to be syndicated on a regular basis.
Newspapers, on the other hand, are less a factor in the Negro market than general papers are in the white market in terms of numbers. There are about 60 weekly or semi-weekly Negro newspapers throughout the country, but only two dailies -- The Atlanta World and the Chicago Defender.
Ebony magazine, with a monthly circulation of 729,000, is the only major national Negro magazine and it is now used by 57 of the nation's top 100 advertisers. Ebony calculates its pass-on readership brings its total readership up to 3.5 million -- better than 20% of the total Negro population.
A major reason why Ebony has become such a major force in this market is the small duplication of readership with general magazines -- generally less than 2% of the combined circulations. Only 1.7% of the combined circulations of Life and Ebony are the same, according to Starch research in 1961. The same calculation between Ebony and The Saturday Evening Post gives 0.5% with Better Homes, 0.8%.
The point here is that the widespread assumption that general media reach the Negro anyway and that special campaigns to Negroes aren't necessary is a doubtful premise. Even to the extent that it is true, "reaching" with advertising directed to somebody else doesn't constitute selling. This notion that general media adequately takes care of Negroes guided American Bakeries' marketing activity until it discovered that, although Negro families eat 15% more bread than white families, the company's sales in the Negro market were poor. The company reversed itself, is now on a long-term marketing campaign aimed at reaching the Negro market with promotions, point-of-purchase, and magazines. Result: a step-up in Negro consumption of American Bakeries' products.
Advertising themes that have proven effective with Negroes reflect thee same social aspirations factor that influences Negroes in other areas. The prestige image -- entertainment, leisure activities, association with quality -- is of particular value, in addition to the standard image of family life.
In this connection, Johnson of Ebony says that celebrity endorsements in Negro advertising aren't necessarily as important as they once were. Most Negroes who have made the grade in entertainment and the sports world, he says, are no longer novel to Negro consumers. In addition, he says, Negroes are impatient with recognition limited only to excellence in physical prowess and entertainment capabilities. The Negro doctor, attorney, businessman, or teacher might be more effective now, Johnson says, if endorsements are being considered. Another angle Johnson pointed out: Negro celebrities are not always universally popular with Negroes. Some of them are widely disapproved of, for one reason or another. So there's an element of risk in these endorsements.
Public Relations has become an area of special importance to the Negro market. And again it's the recognition purpose that has to be served. Negroes have very strong interests in their social groups -- church organizations, lodges, charity operations, athletic associations, etc, -- that offer opportunities for public relations efforts.
Pet Milk, for example, which has used the Fultz quadruplets in its advertising for about 14 years, now uses them for personal appearances at such social functions. Carnation regularly runs a baby health contest directed to the Negro market. Ward Baking has retained tennis champion Althea Gibson as a community relations aide for much the same purpose. Coca-Cola underwrites Negro golf and tennis tournaments.
But Negroes these days are looking more and more behind the public relations and advertising face that food marketers represent. They are looking to the company itself -- specifically its employment practices -- to see how sincere the recognition of the Negro market is. Use of Negro salesmen is long since acknowledged as almost a "must" for successful marketing to Negroes. Attention is now being concentrated on other areas of company activity.
The experience of Coca-Cola in Philadelphia recently is instructive. Pepsi has marketed to Negroes for several decades and had employed more than a dozen Negro marketing executives in its home office, many more Negroes in its bottling plants. Nonetheless, Pepsi was hit by a boycott in the Philadelphia market, directed by a group of ministers who insisted that Pepsi should hire more Negroes -- white collar workers and truck drivers too, not just production people. Pepsi obliged.
Identification with the Negro consumer stands out clearly in this potpourri of supermarket commodity ads that appeared in the April, 1962, Ebony. The copy themes are al most verbatim the same as appear in ads directed to whites. The only difference is the Negro models. This is not to say, however, that all advertising directed to Negroes either does or must feature Negro models. Many brand advertisers use no models at all in Negro-directed advertising.
Negroes' Buying Power; Of $3.5 Billion Stirs Business
Three and a half billion dollars a year -- that's the present size of Negro buying power in the Southeast.
Businessmen throughout the region are eyeing this market with increasing interest.
Already many have found it well worth promoting.
Back in 1939 the region's Negro income barely broke the $1million mark. The 250 percent increase since prewar is all the more remarkable in view of the seven percent drop in the colored population.
Three factors explain the sharp gain in Negro income:
The accompanying chart illustrates the third point. In the past decade the number of Negroes on the region's farm dropped about 33 percent while the number living in cities and towns increased 20 percent.
Changes in quality of the Negro market are equally impressive.
Prewar most Negro families could afford only the absolute essentials and a sprinkling of inexpensive luxury items.
Upward shifts in the distribution of income have expanded greatly the scope of potential Negro demand
Better housing, better clothing, household appliances and many other Items making for more pleasant living are now in the reach of a sizeable part of the Negro population.
The shift in family income is shown in the following table. The I939 and 1946 figures are from official sources and the 1949 data are estimates of the writer based on a recent Department of Commerce sample survey.
Almost one of every five colored families living in Southern cities and towns now has an income of $250 a month or more. Another one fifth enjoys monthly spending cash of $165 to $250.
Contrast this with prewar when less than one out of 50 were in the same two brackets combined.
On a per capita basis. Negro income has more than tripled -- from roughly $150 in I939 to about $500 last year. Income per person in 1949 averaged $300 in the rural areas and over $600 in the urban centers.
The gap between white and Negro income remains large. White per capita in the Southeast in 1949, at $1,100, was more than double the average income of Negroes.
Income of the region's white population would doubtless be raised even more if Negro income continues to go up. Economic gain for one large group are bound to benefit the area as a whole.
Despite widespread migration to other sections of the nation, Negroes still make up some 27 percent of the region's total population.