The baby boomer opportunity for CPG firms
Baby boomers are shifting their grocery purchase patterns as they approach retirement age, according to new research from the US where – like Australia – baby boomers represent a significant proportion of the population.
The latest IRI research, “Baby Boomers II: Preparing for the Upcoming Wave of Aging Shopper Growth,” examines the broad range of baby boomer lifestyle changes and identifies top-indexing food and non-food categories, recession-driven shopping patterns and key opportunities for private label and health and wellness products.
“Each baby boomer segment will experience a broad range of lifestyle changes in the coming years that will dramatically change where they shop and what they buy,” according to IRI Consulting & Innovation President Thom Blischok. “Many retailer strategies today assume that boomers are a homogeneous group, and, as a result, their strategies are too general to be effective.”
Channel and Category Insights
* When consumers age into their 60s, they shop more frequently and a greater share of their total CPG spending is done at smaller format stores.
* Food preferences also change with age. Those approaching retirement age are lead the way in categories such as snack nuts/seeds, ice cream and chocolate. However, consumption is lower than other boomers for cold cereal, salty snacks and frozen pizza.
* Across major beverage categories, it’s clear that shoppers in their 60s prefer non-carbonated drinks, which causes them to make trade-offs, such as consuming less beer but more wine and spirits and drinking more coffee than soft drinks.
* Aging shoppers rely heavily on many over-the-counter (OTC) products, such as vitamins and gastrointestinal tablets but purchase less personal items, including deodorant and shampoo, than their younger counterparts.
“Boomers are being impacted by a number of current trends,” IRI Consulting & Innovation Senior Vice President, Sean Seitzinger, noted. “The various boomer micro-segments are being impacted in different ways and are making their own distinct choices. Today’s retail and CPG community must work hard to understand the unique opportunities being created by this large and diverse consumer segment.”
“Different micro-segments will define the market growth opportunities in health and wellness and the next generation of products and brands.”
Shopper Attitudes: The Economy
The current recession is also having an enormous financial and emotional impact on baby boomers. Many have seen their personal wealth and disposable income drop precipitously, forcing many baby boomers to postpone retirement and some previously retired boomers to re-enter the workforce.
Health and Wellness
As boomers age into their 60s and 70s, a growing number of shoppers are adjusting their diets to manage a range of ailments, such as high blood pressure and diabetes, and there is a growing concern about their weight. Attitudes about health and wellness include:
* Around four in five boomers eat for nutrition, with around half eating to manage a specific health condition. The older boomers are more likely to do this.
* When compared with meals and snacks, ageing shoppers place less emphasis on finding healthier options in beverages.
* Older shoppers consider organic to be a less important attribute in maintaining good health.