The economics of Kwanzaa: How the black holiday became big business

theGRIO REPORT - Given that Kwanzaa starts immediately after Christmas, arguably the most commercialized American holiday of the year, it makes sense to examine the economic effects of Kwanzaa on black businesses...

Luther Vandross was outed as gay after his death.

Founded by Maulanga Karenga in 1966, Kwanzaa is a holiday created to celebrate African heritage as evidenced within African-American culture. A company in which I co-founded, Ujamaa Deals, actually has its name rooted in Kwanzaa. Ujamaa — which means “cooperative economics” — is one of the Nguzo Saba, or seven principles of Kwanzaa that are derived from our pan-African heritage. One principle is celebrated on each day of the Kwanzaa period.

Given that Kwanzaa starts the day after Christmas, arguably the most commercialized American holiday of the year, it makes sense to examine the potential economic effects of Kwanzaa on black-owned businesses. Especially as cooperative economics is one of Kwanzaa’a main principles, this week between Christmas and New Year’s is the prime time for us to put Ujamaa into practice.

But, do people even celebrate Kwanzaa — or at least at a critical mass? This question is important to keep in mind. In this article, my goal is to give the reader some approximate calculations regarding the economics of Kwanzaa, which are based on the social penetration of the holiday. Black businesses can only profit from it if African-Americans truly celebrate it.

The popularity of Kwanzaa

The first question that needs to be answered to determine its economic impact is, “How many individuals actually celebrate Kwanzaa?” Through my research, I learned that the number of people who celebrate Kwanzaa may range from 250,000 to 30 million people worldwide based on various sources. Unfortunately, that range is too wide to give to much weight to the business analysis below, yet we will do our best. Here is why the range is so spread out.

Mr. Karanga said in a 2006 speech that close to 28 million people celebrate Kwanzaa internationally. This number is hard to believe, given that the holiday was started to generate African-American pride. A celebration by 28 million people would mean that Kwanzaa has spread rapidly internationally to people far beyond its base target. According to the U.S. Census Bureau, there are 42 million blacks in America. The idea that roughly two-thirds of us celebrate Kwanzaa is outlandish. So is the idea that millions outside America have taken on a tradition created by American blacks, which is the only thing that could make up the difference in these numbers.

Keith Mayes, author of Kwanzaa: Black Power and the Making of the African-American Holiday Tradition, states that the number of people who celebrate Kwanzaa is closer to two million. While this is more plausible, the number I am going to use for this article comes from the National Retail Federation, which states that about 1.6 percent of the American population (or 4.7 million people) planned to celebrate Kwanzaa this year.

While precise numbers are hard to come by, as it depends on who you ask, it is reasonable to assume that we are talking about millions of consumers. What does this mean for Kwanzaa-focused retailers?