USA and Houston’s Hispanic Market

“An Invaluable Marketing Opportunity”

Hispanics account for over 14% of the U.S. Population - and Growing!

Source: U.S. Census Bureau; Synovate; Synovate 2003 Latin American Planning Report

Minority Percentage of U.S. Population

14.7 21

12.912

4.76

67.8 61

2004 2020 proj

Other

Asian-American

African-American

Hispanic

•Hispanics are growing over 4x faster than the Total Population!

Growth Rates:•Asian-Americans: 5.8% •Hispanics: 5.4%•African-Americans: 2.6% •Total US Population: 1.3%

Two-thirds of Hispanics in the U.S. are from Mexico.Huge Market for Mexican specific products.

Country of Origin US Hispanic Population 2004

Mexico66.50%

Central America

9.10%

Puerto Rico8.80%

South America

5.30%

Cuba3.80%

Dominican Republic

3.00%Others3.50%

Source: U.S. Census Bureau; Synovate; Synovate 2003 Latin American Planning Report

US Hispanic trends and statistics reflect the majority Mexican population.

The United States has the Second-Largest Hispanic Population in the World

29MM Mexican American consumers to target!!

Population 2004 (millions)

1. Mexico 104.9

2. United States2. United States 43.543.5

3. Colombia 42.3

4. Spain 40.3

5. Argentina 39.1

6. Peru 28.9

7. Venezuela 25.0

8. Chile 15.8

9. Guatemala 12.5

10. Ecuador 14.0

Source: U.S. Census Bureau; Synovate; Synovate 2003 Latin American Planning Report

Almost 2/3 of all Mexicans in the US live in Ten Markets.

Source: U.S. Census Bureau; Synovate; Synovate 2003 Latin American Planning Report, Spectra Advantage

• While the population is currently concentrated in specific areas, more and more of the country is experiencing Hispanic population growth.

Market

Popu- lation Rank Population

%of Total Mexican

Population

Mexican % of

Market

Los Angeles 1 5,123,451 22.8% 31.26%San Antonio 2 2,241,774 10.0% 38.62%Chicago 3 1,183,680 5.3% 13.25%Houston 4 1,075,511 4.8% 21.82%West Texas/New Mexico 5 1,044,385 4.6% 29.68%Dallas - Ft. Worth 6 977,987 4.4% 18.05%Phoenix 7 927,605 4.1% 21.80%San Franciso 8 841,278 3.7% 13.98%San Diego 9 683,581 3.0% 23.09%Sacramento 10 400,936 1.8% 15.80%Total Top 10 Population Markets 14,500,188 64.5%

Source: U.S. Census Bureau; Spectra Advantage

• While the population is currently concentrated in specific areas, more and more of the country is experiencing Mexican population growth.

Market

Popu- lation Rank

Mexican Population

%of Total Mexican

Population

% Change in Mexican Population

Charlotte 25 70,077 0.3% 1246.60%Raleigh/Greensboro 16 121,270 0.5% 1146.10%Atlanta 14 189,733 0.8% 618.03%Memphis 44 21,510 0.1% 506.26%Nashville 37 33,469 0.2% 458.75%Birmingham/Montgomery 31 47,185 0.2% 399.26%South Carolina 27 64,233 0.3% 391.15%Knoxville 57 9,306 0.0% 382.93%Green Bay 51 14,909 0.1% 308.02%Columbus OH 50 15,890 0.1% 13.25%Total Top 10 Growth Markets 556,783 2.5%

The South is the Fastest Growing Area for the Mexican Population

* % Change is from 1999-2004

Mexicans are Driving Growth in Many Markets

50.2%

55.1%

58.4%

60.9%

62.6%

68.0%

83.6%

86.7%

94.9%

95.0%Los Angeles

Wichita

San Diego

Chicago

Peoria/Springfield

Detroit

Houston

San Francisco/Oakland

Dallas/Ft. Worth

Phoenix/Tucson

Percent of Market Growth contributed by Mexicans

Source: U.S. Census Bureau; Spectra Advantage

Hispanic Buying Power has increased dramatically to $580.5 Billion and will continue to grow.

Percent of Total US Buying Power

All Other 84.27% 80.42% 79.43% 76.86%

Hispanic 5.19% 7.01% 7.64% 9.35%

Asian 2.73% 3.64% 3.90% 4.59%

Native American 0.45% 0.52% 0.54% 0.58%

African American 7.36% 8.41% 8.50% 8.61%

1990 2000 2002 2007 (proj)

• The clout of Hispanic buyers will increase to 9.35%, or $926.1 Billion in 2007.

Source: 2003 Multiculitural Market Report, Market Segment Research

Hispanics Habits

Mexicans are Brand Loyal, Purchasing Mexican Brands Wherever Available

• Brand Names are extremely important to Hispanics.• 55% of Hispanics believe that Brand Names are superior than store brands.²

• The Brand Set that most adults remember actually developed during childhood.³• Hispanic/Mexican Brands are growing significantly across all categories.

Source: Hispanic Research Inc.; Hispanic Heritage Awards Foundation®; ³The Darkroom of the Mind - What Does NeuroPsychology Now Tell Us About Brands, Wendy Gordon; Tendencias: Latin American Market Report; Information Resources, Inc. FDM No Wal-Mart Dollar Sales, 1999-2003.

Brand CategoryCAGR - Brand

CAGR - Category

Bimbo Bread 14.50% 1.75%Jarritos Carbonated Beverages 18.32% 0.18%Jose Cuervo Especial Spirits/Liquor 5.70% 4.24%Sauza Spirits/Liquor 9.76% 4.24%La Costena Mayonnaise/Sandwich Spread* 36.51% 1.89%Herdez Mexican Sauce/Salsa 4.78% 1.43%La Costena Mexican Sauce/Salsa 11.60% 1.43%Ariel Laundry Detergent - Powder 8.70% -8.95%Corona Extra Beer 7.47% 4.10%Corona Light Beer 15.70% 4.10%Tecate Beer 11.58% 4.10%Jumex Aseptic Juice 84.14% 3.84%Jugos del Valle Aseptic Juice 84.72% 3.84%

Compound Annual Growth Rates: 1999-2003

note: CAGR for Mayonnaise was calculated based off 2 years.

• The Compound Annual Growth Rate of Mexican Brands exceed the category in every segment.

Mexican Foods are growing due to Hispanic population increase, but also due to their acceptance among the general market

2.47%

0.81%

CAGR 1999-2003

Mexican Foods Total CPG Products

Source: IRI Cross-Category Database - 1999-2003.

The Compound Annual Growth Rate of Mexican Foods was over 3 times the rate of all CPG products from 1999-2003.

Hispanics make frequent visits to the store with the whole family….

increasing purchase opportunities of impulse items

0%5%

10%15%20%25%30%35%40%45%50%

Total Hispanic AfricanAmerican

Asian Anglo

Frequency of Grocery Shopping 4 or more times/week

2-3 times/week

1 time/week

2-3 times/month

Once/month

< Once/month

• Hispanics view grocery shopping as a family activity.

Source: 2003 Multiculitural Market Report, Market Segment Research

Hispanic Consumers Tend To Be Heavy Buyers At The Front-End Checkout and Immediate

consumption

Source: Front End Focus Study. DHC Analysis. 2003 Multiculitural Market Report, Market Segment Research

23Light (Less Than Once A Month)

92Medium (1-3 Times Per Month)

150Heavy (Once a Week or More)

FRONT-END PURCHASE FREQUENCY INDICES

Index Of Hispanic Consumers To All Consumers

Past Month Purchase of...

45%

53% 53%50%

42%

Individual Candy

Total Hispanic African American Asian Anglo

Hispanic Consumers

Category Information

Hispanics are a Large and Important Market

Source: U.S. Census Bureau; Synovate; Synovate 2003 Latin American Planning Report

Hispanic Population in the United States (000)

35.3 38.6 43.556

67.780.4

93.8107.4

120.5132.7

143.2154.5

2000 2002 2004 2010 2015 2020 2025 2030 2035 2040 2045 2050

Today14.7%

202021%

Hispanics are the second-fastest growing ethnic group in the United States.-Growing over 4x faster than the Total

Population! - By 2020, 1 in 5 will be Hispanic.

Hispanics: 5.4% Growth RateTotal US Population: 1.3% Growth Rate

Hispanic Buying Power

$223

$491$581

$926

1990 2000 2002 2007

Hispanics currently represent over 7.65% of all goods purchased in the United States.

This is expected to increase to 9.35% by 2007!

Other categories purchased at higher rates by Hispanics….

Source: FEF Study. DHC Analysis.

FRONT-END PURCHASE INDICES% Purchased In Last Year

Candy 103Gum/Mint 106Batteries 114Lip Care 115Carbonated Beverages 140Film/Cameras 147Cookies/Crackers 154Phone/Gift Cards 200

Index of Hispanic Consumers to All Consumers

All potential categories to cross promote

HOUSTON MARKET

TARGET MARKET•Year 2010: 2,049,000 Hispanics in Houston

•73.1% are mexicans,

•40% have been less than 10 years in USA

•& 38% are kids

•Though 1 1/2 million mexicans!!!

Texas a ‘Minority-Majority’ State

49.8%Non-Minority

49.8%Non-Minority

34.6%Hispanic(Minority)

34.6%Hispanic(Minority)

15.6”Other”Minority

15.6”Other”Minority

Texas Population Statistics

22.5 million total population

Source: U.S. Census Bureau (Aug, 2005) Press Release

Houston is a Top 10 Hispanic TV Market

1,218,940

623,310

438,490 413,030 352,910 332,460 317,480 262,970

472,690

1,741,860

Los Angeles New York Miami-Ft.Lauderdale

Houston Chicago Dallas-Ft.Worth

San Antonio San Fran-Oak-San Jose

Phoenix Harlingen-Wslco-Brnsvl-

McA

Source: NHSI - DMAs

2005-2006 Hispanic TV Universe Estimates

Houston is the 4th largest Hispanic television market in the U.S. and the largest in the

State of Texas.

U.S. Hispanic Markets

Harris County

Claritas: Harris County 2004 % Hispanic Density

Total Hispanic Black

Total 4,267,000 4,663,000 4,882,000 5,784,000 5,079,000 5,251,000 5,328,300

Hispanic 982,000 1,157,000 1,409,000 1,450,000 1,533,000 1,590,000 1,634,810

Black 777,000 869,000 820,000 870,000 861,000 859,000 870,154

1995 2000 2001 2002 2003 2004 2005 2010

Houston’s Ethnicity

Houston’s Person 2+ Population

Source: Nielsen TV HH Universe Estimates – Houston DMA

Houston’s Hispanic population has accounted for almost all of the population growth over the past 10 years.

2,049,000

Country of Hispanic Origin

Source: Scarborough Hispanic Custom Study (Rel 1 2005) (Sep04-Feb05)

2000 Census Bureau Factfinder; Hispanic by Type – Hou/Galv/Braz

Houston’s Hispanic Adults 18+Houston’s Hispanic Adults 18+

Two-thirds of Houston’s Hispanic Adult

population were NOT born in the U.S.

Two-thirds of Houston’s Hispanic Adult

population were NOT born in the U.S.

61%Born Out-side U.S.

61%Born Out-side U.S.

39%Born in U.S.

39%Born in U.S.

40% have been in the U.S. for less that 10 years.

40% have been in the U.S. for less that 10 years.

Houston’s Hispanic HeritageHouston’s Hispanic Heritage

• 73.1% Mexican

• 6.4% Central American

• 2.0% South American

• 1.2% Puerto Rican

• 0.8% Cuban

• 16.5% All Other

• 73.1% Mexican

• 6.4% Central American

• 2.0% South American

• 1.2% Puerto Rican

• 0.8% Cuban

• 16.5% All Other

Hispanic Houstonians are YOUNG and IMPRESSIONABLE

Source: NSI and NHSI – P2+ UE’s – 2005/06 DMA / Houston

Ethnic % of Age Cell

Houston’s Hispanic population account for more than 876,000 Adults 18-49!

Hispanic Age Composition

1,383,063 2,595,867 1,349,370

16 15

38 3417

44 5067

180

10

2030

405060

7080

90100

Child 2-17 Adults 18-49 Adults 50+

Black Hispanic Other

$68,059 $69,426

$61,338

Los Angles New York Miami/Ft. Lauderdale Houston Chicago

$54,435 $58,131

Houston Mirrors the Top Five Hispanic Market’s Income Levels

Sources: Hou (Sep04-Feb05 HCS); DFW. Chi, NY (Mar04-Feb05 HCS); LA (Feb04-Jan05) - Scarborough

Hispanic Household Incomes

Adult 18+ Average Hispanic Household Incomes

Houston’s Hispanic Households Prefer Spanish

30.5

22.4 22.4

6.6

18.1

Only Spanish Mostly Spanish Spanish/EnglishEqual

Mostly English Only English

Source: NHSI

2004-2005 Hispanic TV Language Strata

Nearly half (49%) of Houston’s Hispanic TV households are Spanish Dominant speaking while

less than 10% speak Only English.

Language Preference