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The ‘Must-Win’ Generation
A youthful following is one of the most coveted assets for a brand, so it might not have occurred to most beverage companies to consider the recent changes to the Medicare system and how they might affect sales. But Information Resources Inc. thought to look at it and recently reported that Medicare Part D has resulted in an additional $36 billion in incremental spending power, or an extra $1,100 per person, for the 55-and-older crowd.
As far as beverages are concerned, that
already has resulted in increased sales, including a 31 percent
increase in “sports drinks” and an 11 percent increase
in beer sales. That’s not to say there’s a new flood of
seniors running marathons and downing Gatorade; IRI grouped
nutritional beverages in the sports drink category for this study.
But it does show that this group of consumers is seeking extra
energy and nutrition in the form of beverages… and it’s
apparently to help them party more. Beer, wine and spirits all are
hot-sellers with this demographic.
The senior segment is technically broken out
into “pre-seniors,” or those between 55 and 64, and
“seniors,” who are older than 65. In many respects,
these two groups have different buying behaviors. Beer and cocktail
mix purchases, for example, index higher for pre-seniors than for
the average American household. But as people age past 64, they buy
fewer of these products and purchasing behavior drops below the
national average. Spirits and wine sales, on the other hand, index
significantly higher for pre-seniors than the average household,
and they only buy more as they age. Wine sales index five points
higher for seniors compared with pre-seniors, or 29 points higher
than the average American household, and spirits 10 points higher
for seniors vs. pre-seniors, or 36 points higher than the average
household.
IRI argues that seniors are one of the most
important, but one of the most ignored segments within the consumer
packaged goods industry, and some have indicated that this attitude
is changing very little, even as the huge baby boomer group enters
this phase of life. Personal care company North Castle Partners
recently published an interview with writer Ken Dychtwald, who said
marketers have never truly understood the boomer market and
understand it even less now that they are older.
“For the last 50 years, if you follow
the marketing to this generation, it’s as though you’ve
got a 76-million-pound elephant lumbering across the
lifeline,” he said. “Every year it gets one year older.
Yet for the past half century, the way that most marketers have
pursued this elephant is to wait for it to pass and then try to
shoot arrows at its butt.”
Getting out in front of these consumers may be
one of the best things marketers can learn to do, according to
these sources. Whether it’s through product differentiation
or re-examining retail channel availability, older consumers — not the 18-to-34 demographic — are
being called the new “must-win market.” BI
Sneak Peek
AUGUST
Wholesaler of the year — Mesa
DistributingCategory Focus —
Dairy drinks
Beverage R&D — Color innovation
Packaging — Labeling equipment
InterBev pre-show planner
Beverage R&D — Color innovation
Packaging — Labeling equipment
InterBev pre-show planner
SEPTEMBER
Category Focus — Bottled water
Beverage R&D — Fortification solutions
Packaging — Coding technology
Marketing — Ethnic marketing
InterBev on-floor
Beverage R&D — Fortification solutions
Packaging — Coding technology
Marketing — Ethnic marketing
InterBev on-floor