Emerging Markets
A ny time demographics shift, executives hope that suppliers from traditionally under- represented groups will offer new ways to reach populations whose buying power is
on the rise. According to the Selig Center for Economic Growth, the combined purchasing
power of Blacks, Asians and American Indians was $1.6 trillion last year. By 2015, these
groups will represent a combined spend of $2.1 trillion, accounting for 15 percent of the
nation’s total buying power. And last year, the U.S. Latino market had grown to $1 trillion,
larger than the entire economies of all but 14 countries in the world.
With the rapid growth of a diverse population—roughly one of every six people living in the United States is of Latino origin—these companies are recognizing the value
of relationships with MWBEs that may have their fingers on the pulse of a multicultural consumer base. For example, SUPERVALU’s partnership with Catallia Mexican Foods,
a Latino-owned supplier, allows it to sell private-label tortillas to its customers at a
competitive price. Highlighted in the company’s 2011 Corporate Social Responsibility
Report, SUPERVALU notes that Catallia’s knowledge of Latino food trends is helping it
provide “locally relevant” products.
“Additionally, this partnership led to cost savings for SUPERVALU in this product cat-
egory, while also significantly growing Catallia’s business,” the report states. “It’s a true
win-win for both companies.”
Cargill also benefits from partnering with a multicultural supply base. “MWBEs have
very good insight with regard to the products and services that they are offering and
can bring that market intelligence to Cargill,” says Taylor. Looking to capitalize on this
market intelligence, this year the company has committed to increasing its supplier-
diversity spend by 9 percent each year through 2015. Wells Fargo has a goal of spend-
ing $1 billion annually with diverse-owned business enterprises, starting in 2013.
Last year, PSEG spent 5. 3 percent of its annual direct-contractor procurement budget with MBEs and 6. 7 percent with WBEs. HCSC, which operates Blue Cross and Blue
Shield plans in Illinois, New Mexico, Oklahoma and Texas, is spending 5. 2 percent
Supplier-Diversity Best Practices
BOTTOM QUARTER (OF 535 PARTICIPANTS)
2011 DIVERSITYINC TOP 50
94%
98%
4.9%
80%
59%
62%
3.6% 3.6%
2.8%
26%
29%
24%
Procurement-
Management
Compensation Is Tied
to Supplier Diversity
Include Supplier
Diversity on RFPs
Have Formal
Training/
Mentoring for
Diverse Suppliers
Provide Financial
Assistance
Tier I MBE
Tier I WBE
