In 2011, SAB Miller, the parent company of MillerCoors in the United States and owner of seven subsidiaries throughout Latin America, made a move that surprised many people. With continued growth into new countries throughout Latin America, and an ever-increasing need for multicultural talent, SAB Miller relocated its Latin American regional headquarters from Colombia to Miami.
Randy Ransom, who leads the commercial side of the business in the region, analyzed what other multinationals had done. "For the best combination of talent pool, ease of travel and cost efficiencies, Miami was the clear first choice," Ransom says. "It may seem counterintuitive at first glance, but it makes good business sense from several angles."
Over 52% of the Miami population is foreign born, and 66% is Hispanic.
SAB Miller isn't alone. According to the local Sun Sentinel, 18 corporate headquarters moved to Miami between 2011 and 2013 (and that doesn't include the Hertz Corporation's relocation to a neighboring town). Latin American businesses have steadily sought a foothold in the region: Chile's LATAM Airlines Group, the Brazilian heavy construction and civil engineering conglomerate Odebrecht, Mexican IT consulting group Neoris, and Colombia's Colombina (the global snack food giant) all staff corporate U.S. headquarters in Miami, owing, perhaps, to its location as well as Florida's low, flat corporate tax of 5.5% for businesses.
"Trade is growing, economic growth is continuing, and Miami is becoming a larger player on the international scene," says Gonzalo Freixes, a senior lecturer at UCLA Anderson and the associate dean of the Fully Employed MBA program.
The transformation of Miami into an international business city began in the late 1950s when Fidel Castro's regime took over Cuba. "You had an influx of probably 600,000 Cuban refugees," Freixes says.
Because the Cuban population relocating to Miami was already highly educated and accomplished, they immediately set up successful businesses and established relationships with corporations in their home country. Over the next few decades, as other Latin American countries began facing political and economic upheaval, wealthier residents moved their money — and eventually their families — into Miami as well. People came from Nicaragua, Argentina and Brazil, and soon the majority of the city was Spanish speaking.
With such heavy international ties, a gateway to Latin American was born.
In recent years, that growth has only continued — and quickly. Over $50 billion in trade now comes through Miami, and 1,200 multinational companies are established there. It's the 8th-largest economy in the U.S., despite being 44th in terms of population. At last count, over 52% of the population was foreign born, and 66% was Hispanic.
According to an analysis by Miami-Dade County's Department of Regulatory and Economic Resources, the county's total international trade rose by 19.5% between 2010 and 2011. From 2011 to 2012, it grew another 10.9%. Over the eight years spanning 2003 and 2011, the county's gross regional product grew from $89.3 million to $119 million.
Nowadays, the reasons for Miami's continued growth stem less from political upheaval and more from the specific business opportunities the city presents.
Fred Gambino ('13) works in strategic planning for the Miami Dolphins and sees that potential on a daily basis. Sun Life Stadium, home of the Dolphins, has historically only hosted football games. Now, it can be used in a more year-round capacity by hosting world-class soccer events.
"Last September, Brazil versus Colombia drew over 75,000 fans who were predominantly Latin American," he says. "We can pitch that to corporate sponsors targeting those consumers. There are a lot of people in the Miami area who just don't care about football, and we still want to provide them with a product. That could be something like a soccer season pass."
The potential for increased profit is high in the city, while real estate prices remain relatively low. Plus, adds Freixes, "You've got this place in the U.S. that has Spanish-speaking majority, but you have all the stability of the U.S. financial system."
Kaitlin O'Reilly ('15) recently interned with Gambino and the Dolphins as they conceptualized stadium renovations, and was taken with the Latin culture there.
"Miami-Dade County is clearly a very diverse market for the Miami Dolphins," she says. "It's extremely international here. There are tons of cultural events. Sometimes it feels like you're in a different country."
Miami is also home to one of the largest ports in the country. "It's a natural place for Latin American trade to come," Freixes says.
Now, with the Obama administration's recent decision to lift travel and trade restrictions with Cuba, things will likely continue to look better for the city.
The potential doesn't stop with Latin America, though. A growing awareness of Miami's ability to import and export product easily has opened doors for businesses to begin working with companies in other parts of the world, particularly Asia. "I've met a range of European and Asian executives whose companies have chosen to base their Latin American headquarters in Miami, and you can feel the vibrancy of this city as investment flows in," Ransom says.
In other words, all signs point to Miami's prosperity. "If businesses don't have offices there now, they will build them," says Gambino. "Every company wants to leave their footprint in Miami."