Moderator: Rey Ocañas, EVP, Director of Community Development Banking, PNC Bank
Featured Webcast Speakers:
Gus Faucher, Senior Vice President & Chief Economist, PNC Finanical Services Group
Ramiro Cavazos, President & CEO, United States Hispanic Chamber of Commerce
Joe Alvarado, PNC Board of Director Member, Former CEO Commercial Metals Company
Regina Trillo, Founder, Nemi Snacks
Hello, and welcome to today's event, titled, "Accelerating Hispanic Entrepreneurial Growth." Before we get started, I'd like to acquaint you with some of the ways you can participate today. The On24 room allows you to adjust and resize all panels that appear on your screen. To resize any of these panels, just click on the lower-right corner and drag to adjust. To move a panel, click the top title bar of that panel and drag it anywhere within the console.
The QA panel is available to you on the left-hand side of your screen. Just type your question into that window and hit Submit, and your question will be logged into queue.
Please note, closed captioning is available by clicking on the CC button in your media player, and you can resize that media player to any size you would like to read those closed captioning easier. And finally, if you experience any technical difficulties during today's event, first try refreshing your browser by hitting F5 on your keyboard; or clicking the Reload button at the left corner of your browser to reset your connection. And if it doesn't work, you can enter a question into the Q&A panel stating your technical issue and we'll be more than happy to assist you.
Now, without further delay, let's begin today's event, once again titled, "Accelerating Hispanic Entrepreneurial Growth." It is my pleasure to introduce your moderator for today, and that is Rey Ocañas, Executive Vice President, Director of Community Development Banking for PNC Bank. Rey, you have the floor.
Thank you very much. Well, hello, everyone. Thank you for joining us today. I'm excited to help celebrate Hispanic Heritage Month at PNC Bank. We've got a great topic for you, fantastic guests that I'm thrilled to be interviewing and moderating this panel on. Again, I'm Rey Ocañas, I'm the Director of Community Development Banking here at PNC. And today's topic is Accelerating Hispanic Entrepreneurial Growth.
So, first off, though, I wanted to just share my own take on the work that we continue to need to do to support Hispanic communities and the Hispanic small business sector. I grew up on the Texas border; I'm from a small town called McAllen, Texas. And I could see day-to-day growing up the importance that was placed on providing training, providing education, providing lending capital, and more to make sure that the small businesses in that community were strong and stable. And it's the same today, whether you're in a large market or a small market, to continue to look for those opportunities for support and have a really strong ecosystem. And especially for Hispanic-owned small businesses that have cultural nuances, that have unique needs, that have perhaps immigrant founders that need to navigate the US landscape, whether it's financing, working through a bank, getting support and technical assistance from a chamber or other kinds of organization. We need to do all we can to support those ecosystems, and I know that we do our best here at PNC.
So first, let's get some great information on the current state of the economy and the economic outlook for Hispanic-owned businesses. I'm going to hand it over to Gus Faucher, the Chief Economist here at PNC to give us those insights.
Hi. I'm Gus Faucher, Chief Economist for the PNC Financial Services Group, with an economic outlook for Hispanic Heritage Month.
In the second half of 2022, the Federal Reserve is raising interest rates in an effort to cool off economic growth. The Fed is concerned that inflation in the US economy is too high, and so we've seen a big increase in both short-term and long-term interest rates in 2022 as the Fed attempts to slow economic growth. But the labor market is still very, very strong. Job growth in 2022 has averaged about 500,000 per month -- that's about double the pace before the pandemic. And by the middle of 2022, employment had returned to above its pre-pandemic level, even after the loss of 22 million jobs in March and April of 2020.
However, the labor market is extremely tight in mid-2022. The labor force participation rate, the share of adults who are either working or looking for work, is much lower than it was before the pandemic. This shows the labor force participation rate for White Americans and for Hispanic Americans, who can be of any race. But this tight labor market is making it very difficult for businesses to find workers, and that is pushing up wages throughout the US economy and contributing to higher inflation.
The unemployment rate continues to fall both overall and for Hispanic Americans. The unemployment rate jumped to almost 15% for all Americans in the Spring of 2020 with the pandemic, but it is now back to its pre-pandemic low of about 3.5%. And the Hispanic unemployment rate, which increased to almost 20%, is now back below 5%. However, the unemployment rate for Hispanic Americans is slightly above the overall US unemployment rate.
We continue to see expansion in the US economy even after adjusting for higher prices. Gross domestic product, output of goods and services, fell slightly in the first half of 2022 but an alternative measure of the size of the economy, gross domestic income, has continued to increase and overall economic activity in the United States economy is rising in the second half of 2022. That being said, the recovery has been uneven across industries in the US economy.
In particular, consumers have been buying a lot of goods since the pandemic, both durable goods, big-ticket items like cars and appliances, as well as non-durable goods meant to last fewer than three years; things like food, clothing and medication. On the other hand, consumer spending on services has just barely returned to its pre-pandemic level, even after adjusting for higher inflation. And so, as the economy continues to expand in the second half of 2022 and then again in 2023, we are going to see consumer spending growth shift from goods to services.
One of the factors that has been putting upward pressure on inflation in the United States is elevated global supply chain pressures. This is the New York Fed's Global Supply Chain Pressure Index, with the long-run average set to zero. You can see that global supply chain pressures are elevated, but they are falling, and that will continue to contribute to a slowing in US inflation over the next couple of years. Inflation is running about 5% year-over-year. The Federal Reserve would like to see it closer to 2% over the long run, and that is why the Fed is raising interest rates in an effort to cool off economic growth.
And we can already see that happening in the housing market. The 30-year fixed mortgage rate has gone from below 3% in early 2021 to around 5% currently. As a result, that has made housing more expensive and has resulted in declines in sales of existing single-family homes as well as in housing starts. And it's that slowing in interest-rate-sensitive industries like housing that will contribute to slower economic growth over the next couple of years and a slowing in inflation.
With inflation high and the Federal Reserve raising interest rates, recession risks are elevated in the US economy. But PNC's baseline economic outlook is for slower growth, but not an outright contraction in the US economy: not a recession. The unemployment rate, which was down to 3.5% in mid-2022, may move a bit higher over the next year or so to a bit above 4%, but assuming the Fed is able to do its job and slow growth and bring down inflation without causing a recession, we should see a modest increase in the unemployment rate over the next year or so and a slowing in inflation, back down to the Federal Reserve's 2% objective.
Thank you very much for your time. You can find all of our economic information at PNC.com/economicreports, and you can follow me on Twitter @GusFaucherPNC.
Wow. Well, that was a lot to learn. And I know that each of the panelists today are going to have something to say about their own take on inflation and how they see any of these market indicators changing, and how those affect their own business, their own work.
So I'm really excited today that our first panelist is actually a board member who serves on the Board of Directors for PNC Bank, Mr. Joe Alvarado. Welcome, Joe. It's great to see you.
It's great to be here. Thank you very much for asking me to join you, Rey.
Well, you've got a fantastic personal history, great career trajectory, which is no surprise then that you were named to serve on the board of PNC Bank. So, give us some of that background. Tell us about what kinds of things that you achieved in your life. Specifically, I know that you were CEO of a large company. So, tell us about that experience. And then I'm going to go back, take you back to talk about your family. But give us your background so the audience can know.
Sure. My background, briefly, is one of I think many immigrant families, although my family technically was from the United States. My grandparents were from Mexico, but my dad did migrate from El Paso, Texas, to Chicago, Indiana, to work. Steel companies were hiring and it was a wonderful opportunity to make some money to support a family at home, all younger brothers and sisters, and his mother. And that's the foundation that I grew up with -- that, as well as the fact that he and my mother decided after a period of time, and after the war, to start up a Mexican restaurant which at that time was pretty unique. Cuisine -- Mexican -- Mexican food, or cuisine, around the Mexican family, was pretty much unknown. And their market was beyond just the Hispanic community, but also targeted a lot of the White or Caucasian community that also surrounded the steel mill that my dad worked at.
So, our -- my dad worked in the mill. My mom and he started this restaurant -- it really was her restaurant. And their target audience was not just the Hispanic workers from the steel plant, but beyond that, and they grew a successful business as a result of that.
So, that was the foundation on which I started, and that provided me certainly some benefits that other people might not have in the sense that they were businesspeople. They were entrepreneurs, which helped me with my education and my understanding of what it took to run a business, and I guess more importantly, gave me the confidence to do things that I saw them do -- in other words, taking risks, being leaders, not only in the community but leaders among the Hispanics in particular.
So, those were great learning tools for me, that I took to school. And after getting an undergraduate degree and a graduate degree, I went to work for the same steel company. But instead of on the shop floor like my dad did, I started in the corporate headquarters in Chicago and was fortunate to benefit from really wonderful mentorship of people who were more racially -- or more diversity-inclined to support diverse candidates. And I got some wonderful experiences in sales, manufacturing, strategic planning, as well as my original career in accounting, and ultimately ran some businesses which allowed me to grow my experience into running other businesses, and ultimately serving as the Chair, President, and CEO of Commercial Metals Company, based in Dallas, Texas.
So my career is -- was blessed by lots of good experiences and leadership and mentorship, not only from my family, but other people that ultimately led to my becoming a Director of PNC after my retirement from Commercial Metals.
That's great. Well, you know, there's not that many Fortune 500 companies that are led by a Latino like yourself. So, thank you for the service that you provided and the leadership that you provided and mentorship you provided to so many. It's great to have you again.
I'm curious, from your own experience with your family's business, your experience as President, Chairman and CEO of Commercial Metals, or any of the other roles you've had, what are some of the barriers that you maybe experienced, or barriers that your family experienced? And how did you all overcome them, specifically for business success, I would say?
Yes. So, as I mentioned, my mom and dad targeted a little bit different audience than I think other Mexican restauranteurs might have targeted, and they were able to find a niche market. Mexican food is very common, really, throughout the country. But at that time, it was pretty unique, pretty different, individualized to the point where many of the people who were going to a Mexican restaurant were experimenting. So that was a tremendous, I think, boost for me to see that they could be entrepreneurs, and they did it with the help of what is now PNC Bank, having borrowed money, taking risks, and understanding the strengths and weaknesses of an economic environment.
One example I can give you is, there was -- it was more common that there were strikes in the steel industry. And early in their restaurant career, there was a 100-day strike in the steel industry in August. And what we, my parents, decided to do, was shut the restaurant for a month to try to get their footing, to not spend money, realizing that the economy would be severely impacted. And it was proved to be a good move in several different ways, not the least of which it allowed us to have some time together to travel and visit family. And we had the resources to do that because of the restaurant.
So, I got to see firsthand a mother and father who were reacting to economic conditions, the sensitivity of a loss of income for the community and responding to that. And those were kind of the foundations, if you will, of my taking on a business career. And I started in finance and accounting because it seemed to me the most logical place to start, plus I didn't know anything about selling. I was more about, I guess, production, accounting, and trying to understand a back office. And that's how I ended up in what was effectively a corporate development program, started in the finance department.
Excellent. Thank you. So one last question, then. What -- if you think about every person having different paths to success, can you give us an example of one decision you took, or a step you took, that surprised you in how well things went afterwards where you were, you know, maybe not sure? And you know, you tried it, and it worked out for the best?
Yeah. Actually, I'll give two, because the first one I referred to is having left the cradle of Inland Steel Company and my family and my home community, when I took a job with another steel company in Birmingham, Alabama. That was a good move for me, because it exposed me to -- at a higher level to the board of directors, some very successful businesspeople, and some difficult economic times. And while that didn't work out, and it led to my returning to the Midwest and Chicago, and working for an international company, I guess I would say that if I had never taken that leap I might not have ever had the opportunity to come back and learn more about international business.
So, what appear to be not such a good decision turned out to be a great decision in that it rounded me out and gave me broader exposure. It let me feel the reward and the challenges of taking on risks and not being successful initially, but ultimately becoming more successful because it made me a more well-rounded businessperson. So, when I think about one particular instance, I think about leaving and coming back. But in particular, on the second part of that, is gaining international experience and exposure in the steel industry, which is something that I always thought I wanted to do but had never had until I joined Ersoylar Metal after the stint with Birmingham Steel.
And from there, I was able to catapult into international trading and ultimately running Commercial Metals Company, which itself was not only a steel producer but a trader of raw materials on an international scale.
Amazing. Wow. Those are good learnings. So one take, a real take is you know, take the leap, right?
Mitigate your risks when you can, but take the leap. So, thank you, Joe. This has been -- it's been great dialogue. I'm going to come back to you, but this is a great opportunity for us to segue over to someone who did take a leap, and that's our next panelist, Regina Trillo, who is the founder of Nemi Snacks. And Nemi Snacks are a holistic snack -- I'm super-curious to hear more about it. So, welcome, Regina. It's good to see you.
Hi, Rey. Thank you for having me.
So first off, you know, tell us about Nemi Snacks. Everyone's going to want to know, if they don't have them in their backyard, what is Nemi Snacks? And how did you get into this business?
Yes, thank you. I got into the business, you know, a little bit by accident. I grew up in Mexico City and I moved to Chicago 11 years ago for school. And the first thing that I did was go to the grocery store to look for Mexican food and Mexican products. And I remember stepping foot in the store, going into the ethnic aisle, and seeing all these Latino-inspired brands that were showcasing Mexico in a very stereotypical way. Most of them were using artificial ingredients. And these were big, popular, well-established brands in the US. And that led me to think that probably it would take a lot for them to innovate or take risks and showcase something different from what they were showing.
And then I then went to the product section, and I saw nopales. I don't know if everyone here is familiar with nopales. I have a baby nopal plant, but it is native to Mexico. It's called, in the US, a prickly-pear paddle, and it's the most sustainable Mexican plant because it thrives in hot weather, it doesn't need water to survive. Because of that, it doesn't need pesticides. It has a cultural significance with Mexico and it represents resilience, and it's in our Mexican flag.
And I was excited, I was about to grab it, and then I noticed that it had spikes. And I thought, nobody's going to buy this intimidating-looking vegetable unless people know how to clean it, how to cook it. And my hunch at the time, which became true later on, was that probably people didn't know how to do that.
That experience stayed in the back of my mind. I kept on my legal career. I did immigration law for some years. I did human rights work. And while doing this work, I kept going to the store and seeing the same thing over and over, brands with the same kind of messaging, the derogatory messaging most of the times. And while I was doing immigration law, most of my clients were farmers that were forced to leave their home countries as a result of violence, and survivors of domestic violence. Most of them were women.
And I started thinking about the values that I wanted my business to have, if I wanted to create a business. I put a lot of thought into it, because there was a lot of fear. I was very afraid of creating a business without knowing the consumer packaged goods industry, without having that, you know, institutional knowledge that I thought I really needed if I wanted to start the business. I started doing some research, but I started thinking more about the values that I wanted my business to have. So, I knew that I wanted to work with farmers and pay them what we believe to be a dignified wage. I knew that I wanted to work with women, particularly women of color, and to use high-quality Mexican ingredients and create a business rooted in Mexican cultura.
So I started mixing ingredients at home. I love food, I love Mexican food, so I started doing things at home. And then I joined a food and beverage incubator in Chicago called The Hatchery. And I launched Nemi Snacks in mid-2019, and this is our first product. They are crunchy sticks made from nopales and seeds, and Mexican-inspired flavors, with sombrero-free branding. So, we're very intentional about elevating Mexican cultura in the US and pushing back against this stereotype that if something is Latino, or if something is Mexican, that it has to be cheap. That is not true.
So, that is part of the mission of what we do, and as I said at the moment, we have Nemi Snacks. And that's pretty much where we are right now. We've grown significantly year-after-year. We're in about more than 250 independent stores, mostly in Texas, California, Chicago, and the East Coast. And as I said, this is only the first product. There is a lot of other things that we can continue doing with nopales, and we're very happy to be here and to bring in the Latino and the Latina into the CPG industry.
That's fantastic. Well, I'm anxious to give them a try now, Regina. Can you -- thinking back to Gus Faucher's remarks at the beginning, whether it's inflation or supply chain disruptions that might still be getting experienced after the pandemic. Is there anything like that affecting you and your business?
It's all of that, Rey. I think one thing about being an entrepreneur, and you learn this early on -- it's flexibility, adapting to a change of circumstances, and good communication. I think challenges never leave; challenges change as you grow. And I mean, inflation this year hit specifically different than the years before. Also, COVID, right? In 2020 and 2021, when I launched most of the work that I was doing, was in-person marketing. Getting that word out about nopales, a lot of education with consumers, and all of this was in person. We had to change our strategy in 2020 to mostly digital marketing and finding ways to connect with our consumers in a different way. And I believe we were successful with a lot of consumer data that year, that served for 2021 when we did our rebrand.
And this year, it's been mostly supply chain. We had a huge challenge with the material that we used to make the packaging, and we had significant delays. Luckily, we were very transparent since the beginning, and I think one learning experience and one lesson learned for me was to just continue investing in relationships with retail, with consumers, with buyers. Because it's really keeping that communication honest and open about, this is the challenges that I'm having. This is the timeline based on A, B, and C. This is what I'm going to do, to minimize the risk of A, B and C, and work on a solution that worked for both of us. And that worked really well for us.
I mean, right now we're also dealing with some issues with supply chain, and I think it's also just at the extent as we have, diversifying your supply chain, diversifying operations, and just continue looking at different ways of doing things where we can just conduct the business in a successful and better way. But I think flexibility, adaptability and communication are just always going to be part of our growth and part of the thing that we just need to live by, and live with, as an entrepreneur.
Sure. That's right. That's right. So you mentioned the accelerator program you were in at the beginning. I know you've done maybe one or two, I know, supported by Target and DoorDash, big names. So, obviously, you're doing something right if you've been selected for those. Tell us, you know, was there anything that was really uniquely positive for you about those experiences? Something that helped you in your business through those accelerator programs?
Yes, significantly. So I think about the Target Accelerator, that they do it twice a year. And it's mostly for consumer packaged goods businesses. And I think the main takeaway, it's focused on retail, of course, specifically on selling at Target. And Target has really good data. And I think one -- well, actually two main takeaways. One is, we're constantly looking for resources and opportunities for representation and access. And I think one of the issues and the challenges that we sometimes face, is you start learning about something that maybe you're not an expert on, and you get into this ocean of information and knowledge. And we need to learn, and need to know, how to use this information, because that is when it really becomes powerful.
And Target provided that explanation of a lot of resources that I haven't encountered before, but I didn't know how to apply. A very tangible thing that came from the accelerator was actually the rebrand of my packaging. This was my packaging when I first started the business, so this is a packaging, DIY, PowerPoint, a lot of text, a lot of information that people don't read. And then with Target, we did a lot of research and a lot of consumer feedback and a lot of use of their experts, and mentors in the program. And this was the rebrand, which has been significantly beneficial for the company. And we were able to launch in September 2021.
And I think that was the main takeaway, just being able to understand all the data that I have and make better decisions based on information and based on data. And then the responsibility -- oh, go ahead, Rey?
That's fascinating. Yeah.
What were you going to say?
That's fascinating, especially, you know -- it's a pretty big difference in packaging. And so did you see an uptick in sales after the new packaging launched?
Yes, I did. And I saw uptick of interest from other stores, interest from stores that I initially reached out to but they were not interested. And then when they saw the new packaging, they were interested. And that's the thing, you know. I think that the -- when you think about packaging, that this is something that I learned from Target. You need to have color. Then you need to have a figure or a form of something. And then the third element is text. That is how my packaging looks right now, whereas before, it was text, the last thing was color, and there were some figures here and there. But it was heavily focused on text, exactly the way that we should not be doing it.
So, it's been -- it has been day and night, and I'm grateful for that opportunity, and also the responsibility that comes with that opportunity of me being able to share that knowledge and information with other businesses, particularly Latina-owned businesses.
Exactly. Wow. That's fantastic. So, is there anything in terms of, you know, what you're aiming at for the sustainability of your own business that you would share with the audience here? What's sort of one or two things you're really focused on, to make sure your business continues to grow, your business is stable, and survives these ups and downs we were just talking about in the economy?
Yes. I think since the beginning, because I didn't have the institutional knowledge for the industry, I was more mindful and very conscious about my margins and my cost of goods sold. And I was very conscious of whatever that I did, I always wanted to respect that, and being very conscious about the growth that I was having and the speed of that growth. Because, depending on the speed you want to have, the amount of funds that you need. So the company is bootstrapped, and there is a lot of alternatives when you are looking for outside funding, right. I think it's common to maybe think, I'm going to go right to VC. I'm going to start fundraising. I mean, the data is out there, and even though Latinas are the fastest growing population of entrepreneurs in the US, we're still overlooked. And we're only getting 0.04% of venture capital funds.
So, I was trying -- at the moment I saw that data, and I was like, oh, I need more traction. I need to have a little bit more growth for this. How am I going to do that in a sustainable way, and in a scalable way? So, protecting my margins, being very mindful of the growth that we were having based on the inventory that we could produce, the warehousing space that we had. So, just being mindful of the growth, and not -- how do you say in English -- sin correr antes de caminar -- not eat more than I can chew.
Yep. Learn to walk before you can run.
Exacto. So, just being mindful of that part of the business, which to me just speaks to really, really having a healthy structure, and a really healthy backbone, to support the growth, right? Because when you start getting into more stores, it's not only getting into the store. It's the marketing costs that come with that, the distribution costs, the broker's costs. So, learning about the ecosystem of CPG and the reality of how it is when it comes to how capital-intensive it is, and how can I protect myself from that?
So, I think working -- to me it always goes back to working on the basis, and a lot of it has to do with the operation work and supply chain that we do mostly in Mexico because that's where the product is manufactured. And when we source most of the ingredients, and it's a work in progress. I think there is a lot of improvement that we can continue doing on, and having financial person that I trust, that looks me in the eye and tells me all the things that I'm doing wrong. That's the kind of partner that I want, so that I can continue growing in a scalable and sustainable way.
Fantastic. Wow. Well, a lot of technical learnings and great experiences, including the accelerated programs, so thank you, Regina. I want to come back to you, but this is a really good segue then --
Yeah. Thank you, Rey.
-- to our next panelist, a gentleman I've known for a little while, Mr. Ramiro Cavazos, who is the President and CEO of the United States Hispanic Chamber of Commerce. So, welcome, Ramiro. It's good to see you.
Thank you, Rey. It's great to see you, too.
I know we're at the tail end of what is celebrated as Hispanic Heritage Month. And during this month you've had your annual convention in Phoenix. It was great to see you there as well. Hope that all was very successful.
But I've known you since I was a junior leader, running my own Hispanic Chamber in another city, when you were doing the same. So, tell us about your background first. Tell us about your own trajectory that led up to the US Hispanic Chamber.
Well, thank you, Rey. It's great to see you and be on here with such a great panel. Like you, I grew up -- I was born in McAllen and raised in Weslaco, in the Lower Rio Grande Valley of South Texas. I want to say I'm excited to come after your great board member, Joe Alvarado's story, and of course you know, Regina Trillo's story with Nemi. I'm extremely hungry already. They both talked about food. And that drives the economy of our country.
And so I grew up in South Texas. My grandparents on my father's side owned a small grocery store in Weslaco. It was one of the first grocery stores. They were one of the founders of the community back in 1919. I'm a seventh-generation Texan, and we were there before it was the US, or even Texas. I mean, it was Spain and Mexico in the late 1600s, when my family arrived on my mother's side. They're shrimpers on the Texas Gulf Coast. They're camaroneros. And so they were in the shrimping and oyster business, and my dad was a rancher and a farmer, and my mother was a bookkeeper.
So I believe that I ended up in my position running the United States Hispanic Chamber of Commerce because of my exposure to entrepreneurship in our Latino community growing up on both sides of my family. So, ended up going to college at UT Austin, graduate school at St. Mary's University. I was trained in economics, business, and political science. And I've just been very fortunate, Rey, that along that way I met you, and we were both doing community development and making our economy stronger in many ways, by building a quality of life in there. And I'm just so energized to be on this conversation with you and PNC Bank.
I want to thank Joe for his leadership on the corporate board. He represents, quite frankly, less than 5% of corporate boards as a Latino doing the work that he does. He sets the tone for everyone. And Regina is an example of the fact that we over-index in entrepreneurship as Latinos. McKinsey & Company did a study that the 5 million Latino-owned businesses in this country, that we support at the United States Hispanic Chamber of Commerce, entrepreneurship is a rare quality in people. They sacrifice; they stick their neck out; they work hard. But in the general population, 1 out of every 300 Americans is in business. But for Latino Americans, 1 out of every 200 Americans who are Latino are in business.
So we are out there on the front lines building small businesses that grow into Fortune 500 firms for our nation, creating jobs. And we form, as you know, 20% of the population. So, the future of our economy depends on Latinos.
Absolutely. Interesting insights. In addition to what you heard Gus Faucher speak to in terms of inflation and other impacts currently being felt on the economy, I know that at your convention there was some data sessions. Any other insights about how the membership or Hispanic-owned businesses throughout the country are currently being impacted by the economy, what growth opportunities exist? Anything else you would share?
Well, Rey, it's a great question. You know, one thing that I would say as a community that sets the tone for everything, and the economy and the challenges that we're going through now, is our businesses are primarily small. They've needed help to scale above $1 million and above. Regina mentioned the accelerator programs. You know, we have commitment to what we call the Three C's -- access to capital, and so I'm glad PNC is highlighting our Latino-owned businesses; access to capacity-building, the programs that Regina had helped her become successful; and then the third C, we call it connections or contracts. And that's where we have a network that we build an ecosystem. We call it the Three C's.
And so with today's present economy, our businesses are innovative. They're tenacious. They are survivors, and many of them that were affected by COVID were already impacted before COVID because of their lack of access to those Three C's that we call. And so quite frankly, our businesses, 70% of them are positive about the future economy in spite of the fact that they've been hit, as you know, with inflation costs due to fuel. Most of our businesses are in construction. They're in service, direct service industries. They're contractors, they're truckers, they're shippers, they're in logistics. Most of them are in retail, like restaurants or businesses in light manufacturing, like Regina's. So, fuel cost is really the biggest impact that's hurting small businesses today. Obviously, a direct result of a higher demand than the supply that's available.
You know, inflation is not partisan. It is really all about supply and demand, and when the economy reopened as The Economist shared, there was a higher demand for a limited supply because of the supply chain impacting all of us. So, our Latino-owned businesses are on the front lines; they're smaller; they're hungrier; but they're also serving our communities directly, more so because of the type of industries we're in. That's a good thing, because we're innovative. But yes, costs are really higher than average, and workforce issues are also a challenge.
So, Rey, the work that PNC does, you and your team, it's really making a difference providing that access to capital to allow our businesses to make it through these tough times.
Absolutely. Can you -- you know, you've had service both at a local Hispanic Chamber and now at the national Hispanic Chamber. What are one or two things that you've seen are not any different, right, whether you're working with entrepreneurs at the local level or now that you see and interact with them at the national level? What are some of the same things you've seen, same trends, same issues, same problems that need to be tackled?
Well, Rey, thanks to you and my early development in my career, I've had the honor to work for the San Antonio Hispanic Chamber of Commerce for more than 10 years. I was the Head of Economic Development for the City of San Antonio for seven years. And a big part of my job has been business retention and business attraction, and finding solutions to small business problems. And when the national Chamber, a little over four years ago, was looking for a new leader, they reached out to me. I threw my hat in the ring. And I really was very happy and pleased running the first Latino Chamber formed in America in 1929 by the Mexican Consulate. And we had a robust set of programs, and it had excelled in the Three C's.
But I took on the challenge of applying and I'm honored that I just celebrated four years running the United States Hispanic Chamber of Commerce. We're based in Washington, D.C., and I can say that we work with a coalition of 260 independent Latino chambers like the one I used to run. Each of them has become an emergency room for small businesses working with great partners like PNC and others, to make a difference. Our overall economy with 62.5 million Latinos is $2.8 trillion, the fifth largest economy in the world, if we were our own nation.
So, I would be very honest with you and say, although I work in Washington D.C. running our national office, it is like running a small chamber. It's about relationships. It's about attention to detail. It's about being accessible and it's about having passion and care for the marketplace that we're working with. It's not in Washington; the action's not there. It's making sure Washington doesn't impact our chambers and our small businesses throughout this amazing economy, the largest economy in the world. But for it to continue to grow, we need our local chambers, our 5 million Latino-owned businesses, to have the tools and the resources that they need. Because we are 20% of the population, and in 2040 we will be 100 million Latinos -- one out of every four people living in this country. So, the best thing that's ever happened to America has been the Latino community, and it's backed up by data and facts.
Absolutely. So you know, if you could pinpoint one or two of the top needs, then, for Latino-owned businesses across the country from your work at the USHCC, what is that one, two, even three things? What are the top needs that you see them needing to get addressed?
I would say the only thing that holds back our businesses, as I said, that are already entrepreneurship flows through their blood, is really their own self-doubt, their own ability to overcome rejection. You and I know that if you have a Fortune 500 leader in the tech industry or any of the CEOs of Fortune 500 companies, they all have a failure on their resume. Latinos and Latinas, because of the history of this nation, although we've been here for over 500 years, the first language spoken was Spanish next to Native languages -- the dollar sign grew out of the Spanish peseta. So, the most powerful monetary symbol in the world came from Latinos, and we're very proud of that. And Latinos have fought in every major conflict to protect the democracy of this nation, and to protect free enterprise. But I think the only thing that holds us back -- once we get rejected, we should not walk away and not come back stronger. We need to learn from our mistakes as small business owners.
And the number one thing, Rey, that I believe holds Latino and Latina-owned businesses back, is that -- is our humility. Humility is no longer a virtue, and shouldn't be in the marketplace. And so we teach our small business owners to apply the Three C's, work hard, but also to not take no for an answer. Come back stronger. If you don't get that first contract, keep going. Ask for help, and use your voice to know that we're more interconnected than we ever thought we were, and this economy needs them.
And so, Rey, I think that's the only thing that holds us back, is our lack of confidence. In Spanish, it's autoestíma. But we need to build our confidence and resiliency, and I believe that this marketplace will depend on us because the American economy, for it to keep growing, is going to need our Latino community to power the three things that are so important in competing globally: consumer -- fastest growing consumer is the Latino; workforce -- we are in the workforce, 86% of the workforce in the last 10 years in this economy has been the Latino; and third, we're the vendors of the future. So this is not corporate social responsibility, Rey. It's an essential economic need to fuel the economy with the Latinos in those three areas.
Absolutely. Economic engines, we are. I'm glad to have those comments from you, Ramiro, and that then makes me think that that whole comment we made at the beginning about, take the leap, right? That that's sort of part of what you're saying we need to center on. And that, then, brings me back to Regina. Anything you would add about the primary needs that you see facing small businesses, or anything to add to what Ramiro was just suggesting, Regina?
Yes. Thank you, Rey. And I think, Ramiro, you bring up a very real and constant point, which is fear. And I often get asked, how did you start? And my answer is always, you start exactly where you are. You start afraid, and you start with what you have. And that, that is a companion through our entrepreneurial journey. And a lot -- you know, not having enough money, or enough funds to start a business, I understand. I've been there and I'm still there sometimes, and I question that sometimes as I grow. It's a very valid and real concern, but it's a fascinating time as a Latina to start a business.
The amount of resources that are out there from accelerators, food and beverage incubators -- and I say "food and beverage" because that's the space I'm in, but I know there are opportunities in other areas as well, and other spaces. Grants, there's so many grants coming up. Like, I just turned right and looked at my calendar, and there's seven grants that I'm eligible for as a Latina, that are due this month. Most of those, I get through Hello Alice, which is a great resource where I use to see what grants are available. And I mean, yes, it is fearful. It is challenging.
Somebody the other day said, "Oh, you know, the road is sometimes -- there's bumps in the road sometimes." No, no, no, no. The road is bumpy. That's just the way, how it is. And it's okay, and we can go through it. And I think we're past this stage where as Latinas, particularly women, we're waiting for someone to provide or to create a space for us. We're coming and creating our own tables, and bringing in our chairs, and creating a space for us. And we need more Latinas, not only in the industry that I'm in. We need more Latinas in the business space in the US. So, I think it is an amazing moment to start a business as a Latina, exactly where we are, with the fear that we have. We will figure it out.
Now, that's a really good point. And I'm curious, then, thinking about what you were just saying. For Joe, you know, getting advice is really important as people come through. You, I'm sure, got advice both from your family -- you were talking about the decision you made to try something different. What would you suggest to entrepreneurs that people could avoid, too, or should definitely try? What would your take on that be, Joe?
So I'd like to build upon what Ramiro said, because I think it encapsulates my thoughts in answering your question. And that is that culturally, we grow up with a great deal of humility and deference to others, and rejection isn't taken very easily. It can be a huge setback. So I think it's great that the Chamber is taking advantage of skills to teach people, to be a little bit more aggressive, to be more assertive, to be more confident, to come back and not just accept a rejection but to figure out how to turn that into an asset of some sort, or more positive approach that will allow them to grow their business. Because they need to be aggressive to grow their business. It's a tough market out there, whether they're competing in just in the Hispanic community, or across the board. And so I think it's great advice, and I guess I would recommend the same thing. Be aggressive, be bold, be strong. And that doesn't mean that there isn't room for humility or deference, but at the right time.
Absolutely. Thank you, Joe, for that.
So, I have a question from the audience that I'll share, and maybe I'll have each of you help in answering it. And so we'll start back with Ramiro.
So, the question is, what is one lesson in business or finance that you wish you had learned earlier in life or earlier in your career? One lesson in business or finance you'd wished earlier in life or earlier in your career. Ramiro, what's your answer to that?
Well, that's an easy one, Rey. I think for everyone to know is to start saving at an extremely early age. When there's a young entrepreneur or a young college student, or you just get into the workforce and you get that first paycheck, you end up spending it all. And so, the biggest lesson I personally learned, and many people that I know, is to save early on as much as you can, even when you don't have money, because that compounding interest makes a huge difference the older you get. We think we're going to live forever, and we think that you know, eventually we'll get that bigger paycheck. And yes, all those things do occur. But there's nothing like the tremendous saving skills, and the irony is that Latinos are great savers. We always save for a rainy day because we had to, because we had less when it came to income and economics.
But the key, the part two to that, is to take advantage of your savings and put it into the right instruments and tools to elevate your savings. Don't put it under the mattress; put it in PNC or invest it wisely in financial tools. So that would be my number one lesson, Rey, that I would say that I've learned, to the person that asked the question.
I don't think there's anything else that we could do better than to tell our family members, our sons, daughters, and young entrepreneurs, to save as much as they can because it'll pay off in the long run.
Excellent advice. Regina, what's your piece of advice? What's the one lesson in business or finance you wish you had learned earlier in life or earlier in your career?
It's similar, I think. Just being more financially curious, right. When I was growing up, while I was reading books about fairy tales and princesses, and my brother was reading about the stock market, and I just -- we wasn't in that space where it was okay to be curious about that and asking questions, and doing things differently than to what was expected according to a very limiting social construction. And I probably would have started earlier, if I -- if I had that more -- you know, a little bit more information on that. I can say now that I am, and I understand significantly more than what I did before. But just being more financially curious.
That's good advice as well. Joe, what about you? What's the one thing you'd wish you had learned in business or finance earlier in your career, earlier in life?
Yeah. So I appreciate the observations that have been made already, and I agree with those. But I guess the other thing I would add to it is, at least from a business perspective, be willing to take on new and uncertain challenges. From a financial perspective, I would say work with a good bank, like PNC. But from a personal, professional, be willing to change careers. An entrepreneur, a business person, has to do all the things that are required from finance: selling, production, logistics. Entrepreneurs do that. People who are in a career track, locked into selling or locked into operations, or locked into a finance position, would be served -- would be well-served to take bold steps into other disciplines to learn them in a way that will prepare them to be more well-rounded generalists, like most entrepreneurs are today.
That's great. So, challenge yourself with new things; be financially curious; and save. Great -- great pieces of advice, words of wisdom.
Well, we've come to the conclusion of our webinar. It's been fantastic having you, Joe; and fantastic having you, Regina; and fantastic having you, Ramiro. I hope to see you all soon, and we'll all share some Nemi snacks and maybe other treats.
I do want to say, for the audience, that a replay of this webinar will be made available on the web at PNC.com/minoritybusiness, and you can obviously also get more intel and insights from that page as well. We look to continue to celebrate Hispanic Heritage Month in the few days we have left. Thank you very much for joining us today. Thank you to our panelists. I hope it was a great learning experienced for all of you. Have a great rest of the month.
Thank you, Rey.
Thank you very much, Rey.