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Cuba Opens to Outsiders, and Consumer Goods Companies Recognize an Opportunity

As Cuba Liberalizes Its Economy and the US Eases Trade and Travel Restrictions, Consumer Goods Companies Are Intrigued. A BCG Report Identifies the Country’s Promising Demographic Segments and Highlights Risks

MIAMI—President Obama, Pope Francis, and the Rolling Stones have all visited Cuba in the past year, and many US consumer goods companies want to be next. As Cuba begins to liberalize its economy, the country’s population of 11 million people and GDP of $82 billion are increasingly attractive. The Boston Consulting Group (BCG) analyzed the country’s market for consumer goods and found that it will present a growing opportunity over the next five to ten years. The results of the analysis are being released today in a report titled Understanding the Evolving Cuban Consumer.

The report summarizes findings from a survey of more than 400 Cuban consumers in Havana (Cuba’s capital) and Santiago (a smaller city in the less developed, eastern part of the country). In addition to conducting the survey, the authors spoke to experts in the US, Cuba, and Latin America, as well as Cubans who had recently left the island nation for the US. The result is one of the first quantitative and qualitative studies of Cuban consumers, who have relatively little exposure to consumer products and brands. As a result, the country remains one of the last true white-space markets on the planet.  

“Executives are excited by Cuba’s population, proximity to the US, and potential for growth, but it’s still largely a closed economy, and many company leaders don’t know enough to be able to assess the opportunity,” says Marguerite Fitzgerald, a BCG partner and coauthor of the report. “We wanted to demystify the country and help consumer companies determine whether to consider expanding there in the future.”

Varying Levels of Purchasing Power

Among the central findings of the report is that Cuban consumers vary widely in their ability to make discretionary purchases. Roughly half the population lives with a median household income of $300 to $400 per year. However, roughly 20% of Cuban consumers—primarily in urban areas—have a household income of $1,800 to $2,000 a year, enabling them to purchase aspirational goods. These are primarily cuentapropistas (entrepreneurs) and tourism workers who have access to income beyond the standard government salary.

In addition, remittances—money, clothing, and other gifts sent to Cubans by friends and family in the US—are a large and growing component of the country’s economy. Such remittances have increased 15% annually from 2010 through 2014 and now total $3 billion, with projections calling for that number to reach $6 billion by 2020. By comparison, Cuba’s net exports in 2014 were less than $4 billion.

“As the number of cuentapropistas continues to grow, along with rising remittances and increased tourism, more Cubans are receiving income from outside formal government channels, which gives them greater purchasing power,” says Jim Brennan, a BCG partner and coauthor of the report.

Persistent Challenges and Creative Solutions

Foreign companies seeking to establish operations on the island will face clear challenges. Cuba’s distribution infrastructure is limited, and most products are sold through the government, which sets prices and bans most advertising and promotions. Although the country is slowly deregulating some industries, it will retain control over the distribution and retail sale of consumer goods for the foreseeable future.

However, some consumer companies are applying unconventional tactics to reach Cuban consumers. For example, Heineken is building relationships with the Cuban government and adopting a long-term view. It has brought refrigerated trucks to the island and allows the country’s Ministry of Trade to use them according to its priorities, while Heineken establishes its brand among consumers.

“Cuba is an undeveloped market for consumer goods, which means companies can’t apply the conventional tactics that have worked elsewhere,” says Russell Stokes, a BCG partner and coauthor of the report. “As the opportunity grows over the next several years, Cuba will be a turbulent ride. But it will ultimately reward companies that can ride out the bumps.”

A copy of the report can be downloaded at

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or

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