the 21 st Century Randall Westgren 8 May 2008

Transcription

1 Profiting from a Demographic Shift in the 21 st Century Randall Westgren Canadian Meat Council 8 May 2008

2 What drives consumer choice? Demographics Lifestyle Habit vs. Novelty-seeking Learning (information)

3 What s going on in demographics? Population age dynamics Ethnicity of North American consumers Dual incomes affluence effect time constraint effect Rising number of single-person households

4 Population age dynamics -Canada % population over 50 50% 40% 30% 28.9% 32.0% 35.4% 38.3% 3% 20% 10% 0%

5 Population age dynamics - US % population over 50 40% 30% 25.9% 26.0% 27.0% 29.8% 32.4% 20% 10% 0%

6 Ethnic Diversity - Canada %immigrants in period 50% 49% 40% 30% 27% 20% 10% 0% 7% 7% Europe Africa Asia Hispanic

7 Ethnic Diversity -US % increase in population p % 30% 36% 31% 20% 10% 6% 13% 8% 0% W hite Black Asian Hispanic Total

8 Dual Income Families - Canada % Dual-income Family Households 70% 60% 50% 40% 30% 20% 10% 0% 37% 61% %

9 Dual Income Families - US % Dual-income Family Households 60% 50% 40% 30% 20% 10% 37% 45% 50% 0%

10 Small households - Canada % of single households 40.0% 0% 30.4% 33.6% 36.1% 36.4% 30.0% 20.0% 10.0% 0.0%

11 Small households - US % of single households 40% 30% 24% 30% 33% 20% 10% 0%

12 What does it mean when we have increased single-person households? increased dual-income households? increased population over 50? increased numbers of Asian and Hispanic consumers?

13 First-order effects Dual incomes imply higher disposable income increased time constraints for consumption Therefore increased demand for high-end products AND convenient meal solutions behind-the-wheel-friendly foods

14 First-order effects Single person households imply smaller packages convenience high away-from-home consumption lower food interest

15 First-order effects Growth in ethnic consuming populations implies different product mix at retail diversity in food service

16 First-order effects Aging population implies higher disposable incomes

17 Second-order order effects Affluence tends to break traditional sociodemographic consumption patterns The products that are brought out for ethnic markets are adopted by broader consumer markets Combination of time constraints and affluence leads to eatertainment

18 The problems with demographics They imply behavioral norms based on what you look like Demographics are no longer stable predictors over time What we look like is less important than how we behave Let s call this lifestyle for now

19 After all these years Dis-moi ce que tu manges, je te dirai ce que tu es. - Jean Anthelme Brillat-Savarin 1825

20 Lifestyle - behavior % who eat a home-cooked dinner 6-7 nights per week loners married married not married w/o kids w/ kids w/ kids 44% 46% 45% 45% Source: Peter Hart for Grocery Mfrs Assn, 1998

21 Lifestyle - behavior % who dine with entire household 6-7 nights per week loners married id married id not married w/o kids w/ kids w/ kids N/A 60% 52% 54% Source: Peter Hart for Grocery Mfrs Assn, 1998

22 Lifestyle - behavior % who buy a ready-to-eat meal 2 or more nights per week loners married married not married w/o kids w/ kids w/ kids 39% 27% 33% 42% Source: Peter Hart for Grocery Mfrs Assn, 1998

23 Lifestyle - behavior % who use microwave almost all the time/very often loners married married not married w/o kids w/ kids w/ kids 43% 36% 33% 29%

24 Some emerging lifestyle l issues Fastest growing product categories in the center of the store TASTE, INDULGENCE, VARIETY FUNCTIONALITY

25 Some emerging lifestyle issues Echo Boomers are a strange, volatile age cohort BIG into self-indulgence Most likely to shop in Supercenters Low incomes with high consumption aspirations Novelty-seekers Ethnicity doesn t drive purchases

26 More learning opportunities Experimentation, novelty-seeking, and ethnic boundary-jumping occur in the foodservice sector Good news since we have 1 ½ generations of inept home cooks Ironically, TV may save us, especially with Echo Boomers

27 Habituation vs. Novelty Habituation is a classic response to the huge number of consumption choices before us Food products are EXPERIENCE GOODS, as are food retailer patronage, and restaurant choice

28 Habituation vs. Novelty Positive satisfaction Novelty Negative satisfaction The Wundt curve

29 Habituation vs. Novelty There is a constant tension between the comfort of habitual purchases and the search for novelty Marketing expenditures flow to this tension: reinforce positive satisfaction for existing products present new choices in product categories Marketers battle over which brands/items will enter our evoked set during the shopping task

30 How do we make a market? Consumers on one side with Changing basic demographics Increasingly specific behavior segments Increasingly unstable presence in segments Interest tin novelty Food marketers with Huge capacity to generate new products Blurred, fragmented market channels

31 How do we make a market? Use the metaphor of maps: Consumers have an incomplete mental map of the array of choices they have to purchase food (products, sources) Marketers have a fuzzy, incomplete mental map of consumer needs, wants, desires Both parties are navigating g with imperfect maps, trying to meet at the cash register

32 The complication of what is being purchased? Consumers don t really consume products They consume complex goods that they construct from products bought at retail OR they buy complex goods that someone constructs for them (food service) The value they get from these complex goods comes from the combination of characteristics they consume

33 Characteristics of Consumption Goods Intrinsic characteristics in food products Nutritive Organoleptic Physical/ l/biological i l Extrinsic characteristics Psychic: tradition, sophistication, economy Entertainment Convenience Where do story products fit?

34 Navigating Consumers navigate from memory, even if their mental map of consumption possibilities doesn t match up with reality -- habituation To find novelty in the landscape of consumption possibilities, they need signposts Who makes the signposts?

35 Signposts: Navigating Consumer advertising i Point-of-purchase in retail Food service industry The early warning system for novelty in the US. Note that the food retail system is generally devoid of personal information sources, unlike most consumer products markets, except