Baby boomers offer exciting opportunity for food industry that many are yet to tap
Consumer packed goods (CPG) retailers and manufacturers that view the baby boomer group as a single target market do so at their own peril, according to a new report from an American market research firm.
The IRI Times & Trends Report, “Baby Boomers: One Size Does Not Fit All”, discovered that, despite sharing many seemingly formative historic experiences, the baby boomer (those born between 1946 and 1964) generation prides itself on individuality and is really quite diverse. And understanding the variety of needs of this generation could unlock the key to much greater profits.
“Market leaders who want to most effectively meet the needs of boomers, some of whom are in their 60s, while others are still in their 40s, must identify the distinct and ever-changing attitudes and behaviours of literally hundreds of micro-segments based on income, geography, shopping trip missions, health and wellness and many other factors,” IRI Consulting and Innovation President, Thom Blischok, advised.
Despite the great sense of individualism within the baby boomer generation, there are some broad commonalities among baby boomers that are worth noting. For instance, approximately two-thirds of boomers will continue to work after retirement, some out of financial necessity and others from an eagerness to remain active. Baby boomers, like their Generation X, Generation Y and younger compatriots, use the Internet actively to get information, research products and make purchases online. And, like no other generation before, baby boomers rely heavily on CPG products, such as food, beverages, vitamins and supplements, to sustain high levels of health and vitality. For the CPG industry, the opportunity is immense.
During the next two decades, the entire baby boomer population will enter its senior years. As boomers age, their healthcare needs will also evolve rather quickly, with greater demand for medications and other health-related supplies. Manufacturers and retailers must rethink the value propositions of these products to an aging boomer audience.
Manufacturers should be thinking about innovations, such as packaging suitable for arthritic fingers and labeling suitable for aging eyes, according to IRI. Retailers in areas with high concentrations of boomers should consider displays that bring together a wide range of health and wellness needs. For example, in a kiosk labeled, “Serving the Active Boomer,” shoppers would find items one would expect, including over-the-counter analgesics, age-specific vitamins, rubs and ointments, plus an array of unexpected items, such as herbal teas and energy bars formulated for the 60+ year-old body.
The IRI study recommends the following action-oriented steps that retailers and manufacturers can take to meet the needs of the aging baby boomer population:
* Anticipate and proactively address changes in product needs and shopping preferences through frequent and granular consumer and market assessments
* Develop best-in-class marketing, pricing and promotion strategies for key categories; re-evaluate distribution strategies to align with shopping patterns
* Understand the core healthcare needs across key consumer segments; align product assortment and merchandising programs with chronic and/or frequently-occurring ailments
* Re-evaluate existing programs frequently to maximise relevance and response for high-priority categories and segments
* Retailers must support private label initiatives with targeted ads and display-based merchandising; brand manufacturers must re-evaluate pricing strategies to ensure alignment against the value needs of key consumer segments
“The changing needs of an aging baby boomer population, combined with today’s economic transformation that is causing consumers to shift how they live, work and shop, should be driving manufacturers and retailers to completely reformulate how they design, launch, merchandise, promote and price products,” Mr Blischok said. “To be successful, it’s imperative that marketing approaches are based on a dramatically deeper knowledge of shopper attitudes and behaviours that change rapidly to meet the needs our industry’s largest and most powerful consumer segment.”