A recent report published by McKinsey & Company discusses at length the growing economic power of Latino consumers, and the demographic challenges that impact them.

Disproportionate impacts of COVID-19, rapid inflation, and continued underrepresentation in both marketplaces and board rooms alike demonstrate the need for greater investments in Latino consumers.

According to the McKinsey report, US Latinos account for the fastest-growing portion of US GDP. Despite this, McKinsey estimates that Latinos have unmet needs of $100 billion as compared to non-Latino Whites. As the report states, “Over the past decade, Latinos have grown their household consumption to reach a cumulative $1 trillion market in 2021—a 6 percent annual growth rate over the last decade.

Their household spend is higher compared to other groups at similar income levels, and yet marketing spend directed at Latinos most likely does not reflect this. Latinos are conscious of their impact, choosing brands that value the environment and their employees, all of which makes them more influential than their income levels would suggest.”

Much of this disparity is driven by an ever-present wealth gap between Latino consumers and non-Latino White consumers. McKinsey’s research indicates that Latino consumer opportunity would be strengthened by upwards of 500% if this gap were closed. “In a scenario in which Latinos match their spend to their share of population, Latino consumers would spend around $55, 4 billion more than today. Closing this gap would require addressing the underlying income and savings gaps between Latinos and non-Latino Whites. Employers and society at large have much to gain from providing Latinos with better jobs that also provide advancement and leadership opportunities.”

A lack of representation in positions of power has also created challenges in accessing necessary capital for spurring Latino entrepreneurs and their businesses. The McKinsey report tells us that US Latinos are the most entrepreneurial portion of the US economy, and that, “If Latino businesses’ access to capital were improved, and their representation in growing sectors increased, they would contribute an additional $2.3 trillion in revenue to the economy and create 750,000 new employer firms, resulting in more than six million jobs. Interventions to improve access to funding, both from financial institutions and procurement-led organizations, and investments in digital capabilities for Latino businesses can help realize this potential.”

This underrepresentation is felt strongly in boardrooms and C-suites in major US companies. As a result, it is “more likely that decisions around product development, marketing, and supply chains overlook the needs of this key population.”

There is much to learn about the needs of Latino Consumers within the McKinsey report, from how US Latinos make up the fastest-growing portion of the country’s GDP, and the challenges of representing this large section of the population. To read the full report, visit: McKinsey.com