Making It In America

No one has taken greater advantage of the changing border environment than Emilio Azcarraga Jean. In late 2001, Televisa renegotiated the terms of its agreement and raised its stake in Univision, now the dominant Spanish-language network in the United States, from 6 to 15 percent of its shares. Having regained much of the U.S. foothold his father had given up, Azcarraga also formed a joint venture with two U.S. partners in 2001 to promote live stateside shows starring Mexican entertainers like the platinum-selling nortena music band Los Tigres del Norte. About 7 percent of Televisa's annual $1.3 billion in annual television revenue now comes from the U.S. market, and it is expanding fast, with plans to launch five new Hispanic pay-TV cable channels in the United States later this year. "Speaking Spanish and being Hispanic wasn't fashionable when I lived in San Diego in 1989 and 1990," says Azcarraga, who speaks flawless English as a result of his time in the States. "But practically no one in Miami speaks English anymore. You go to New York and people understand you when you talk in Spanish. In 1989 the Hispanic was the valet-parking attendant; today the Hispanic is the owner of the valet-parking company."

Signs of creeping Americanization in the Mexican corporate world, too, are not hard to find. The headquarters of the Grupo Mexico conglomerate and the corn-flour manufacturer Maseca boast fully bilingual automated switchboards. Executive recruiters at CEMEX won't even consider Mexicans who aren't proficient in English. Coming from Mexico's formal suit-and-tie corporate culture, CEMEX executives did away with the casual-Friday dress code at Southdown's Houston headquarters after the takeover, but North America chief Francisco Garza says he is rethinking that decision. Some Mexican staffers wore Stetsons and string ties to the office on the opening day of Houston's February rodeo festival.

One new force driving the move north is the sputtering pace of reform at home under President Vicente Fox. Much of the private sector is openly disappointed with Fox, a onetime head of Coca-Cola's Mexican subsidiary whose historic victory in the 2000 elections was expected to spur growth and a pro-business climate. His plans to amend the country's labor laws and promote small- and medium-size companies have bogged down in the opposition-controlled National Congress. Mexico's GDP grew by less than 1 percent in 2002, and is expected to grow by less than 3 percent this year. Despite its own economic doldrums, the United States looms like a 21st-century El Dorado in comparison. "We have the sense that the [Fox] government is paralyzed," says Juan Domingo Beckmann, the thirtysomething CEO of Jose Cuervo Tequila, whose grandfather began shipping cases of the country's trademark firewater into the United States in the 1940s. "As a company we have to grow and continue to be competitive, so we have to bet on the international market."

Most of these companies are targeting Hispanic consumers in the United States, not the broader American market. Cement is cement, but most of the products Mexican companies are promoting are things like tortillas, nortena-music CDs and Maria Felix melodramas, which hold a special appeal to Spanish speakers with Latin American roots. One of the few notable exceptions is the Mexican brewery Grupo Modelo, whose ad campaign for Corona Extra beer catapulted a mediocre, Miller-tasting lager into the biggest-selling imported beer in the United States. The target customers were Anglo yuppies and college kids.

Now one of the first Mexican companies in America is rediscovering its stateside brethren. As recently as five years ago, the Cuervo Tequila distillery didn't even have an advertising budget for the U.S. Hispanic community as such. That changed soon after the introduction of an aged tequila brand called Cuervo Tradicional aimed at more sophisticated, Mexican-bred palates. Sales boomed--and Latinos now account for 20 percent of the company's $200 million annual revenues in the United States. And these days, if you can make it in the Hispanic neighborhoods, you can make it in America.

© 2003