PepsiCo’s Impacto is changing the lives of Hispanic SMMEs
Operated in tandem with Accion Opportunity Fund, Allies for Community Business, LiftFund and Prospera, the Impacto Hispanic Business Accelerator is designed to help Hispanic business owners keep their doors open during the tougher times … and we’ve certainly been through those of late.
According to the Bureau of Labor Statistics, 1 in 5 US businesses fail within their first year of operation, while 50% don't make their fifth anniversary. Throw in a pandemic or runaway inflation and a once-healthy cash flow can dwindle to nought. From startups to large firms, financing is essential for the development, maintenance and growth.
The Hispanic challenge
Today, the US is home to nearly 5 million Latino-owned businesses (LOBs), generating more than $800bn in annual revenue. It’s a thriving sector consumer-wise, too, with more than 62.5 million Latinos contributing an economic output of $2.8 trillion. In fact, a study conducted by Stanford reveals that LOBs outpace the growth rates of White-owned businesses (WOB) in terms of number of businesses and revenue (+34% vs -7% between 2017 and 2019).
However, LOBs continue to face notable challenges, among them a limited access to cash flow.
The same Stanford study reports that Hispanic owners typically have a lower approval rate when requesting loans above $50,000, despite having similar – if not better – qualifying indicators than WOBs on average (3 x gross revenue, similar credit scores and lower outstanding debt).
“The contributions of Hispanic communities are an integral part of the fabric of American culture,” said CD Glin, president of the PepsiCo Foundation and global head of Philanthropy, PepsiCo.
“Unfortunately, the community has also long faced systemic barriers to success that are only amplified by current economic woes like inflation and worker shortages.
“Our goal is to help these businesses navigate the ever-changing economy, beat the odds small businesses face, and keep the doors open and the business thriving.”
Working together
Under the umbrella of its Racial Equality Journey Hispanic initiative – launched in 2020 with a $172m set of commitments – PepsiCo launched the multi-faceted Juntos Crecemos platform, aimed at supporting the growth of Hispanic-owned restaurants, bodegas and carnicerías.
With one in every three Latino-owned businesses seeking financing in 2022, access to financing is crucial as new employer businesses emerge and existing businesses continue to grow and recover from the COVID-19 pandemic - 2022 State of Latino Entrepreneurship Report, Stanford Graduate School of Business.
The platform has subsequently expanded to include the Hispanic Digital & Delivery Programme, Bodega and Carnicería Essentials and the recently-launched Greenhouse Accelerator Programme: Juntos Crecemos Edition. It also includes the Impacto Hispanic Business Accelerator, which has supported more than 750 businesses since its inception in 2021.
“Supporting long-term solutions that drive economic equity in the Hispanic community isn’t just right – it’s imperative. The Impacto Hispanic Business Accelerator is more than just saving businesses; it is about investing in the people that bring life, culture and vibrancy to our communities and ensuring that they continue to grow, thrive, and prosper today and for generations to come,” said Glin.
PepsiCo has again opened applications for the Accelerator and is calling on Hispanic F&B SMMEs who are bringing life, culture, and vibrancy to their local communities to apply. Applications will be open from 17 May to 16 June 2023.
One hundred successful applicants will be given access to business training and coaching from Accion Opportunity Fund and other local nonprofit partners, along with a $10,000 small business grant to address foundational challenges and support growth.
Changing lives
Cuernavaca’s Grill in Los Angeles and Back of the Yards Coffee in Chicago are two previous recipients of the Impacto fund, with both businesses seeing expansion as a result. Cuernavaca is rolling out a second location this month, while Back of the Yards Coffee is adding two new shops to its lineup in the summer and fall of 2023.
“I am so grateful for all the work [the PepsiCo Foundation has] done. It has truly been life changing for me,” said Nayomie Mendoza, owner of Cuernavaca’s.
“A year ago, I was afraid to knock on doors and now I am hopeful, motivated and even expanding the business to a second location. Thank you for being a vessel to shed light on small Latina owned businesses. It truly is a win for the entire community.”
Added Jesse Iniguez, owner of Back of the Yards Coffee, “The PepsiCo Foundation Impacto grant helped us keep the doors open and keep our employees employed.
“I am so thankful the Foundation is continuing this because today I am now expanding my business to two new locations. I think these types of grants are such a blessing and it came at a time when we most needed it. A small grant like this can go a long way to get us over the top.”
The PepsiCo Foundation invests in the essential elements of a sustainable food system. Working with nonprofits and experts around the globe, the snacking giant’s philanthropic arm is focused on helping communities obtain access to food security, safe water and economic opportunity.
