Baby boomers: firms must target different groups separately, report
boomers market, according to a new report, which says that
companies need to understand that this is not one homogenous group
and adapt their products and marketing to target different
categories of baby boomers.
Published by market researcher Information Resources Inc (IRI), the report separates baby boomers into three groups: Kennedy Boomers (born between 1956-1964), Truman Boomers (1946-1955) and FDR 60s (1936-1945).
According to the report, food and beverage manufacturers are wrongly grouping together all baby boomers into one homogenous group, but that results in marketing strategies that are too general to be effective.
"Determine who is your target consumer," says IRI.
"You need to get past aging and do more to understand lifestyle and life stage to develop the best solution for that consumer group."
And these different groups are spending differently, IRI analyst Sean Seitzinger told FoodNavigator-USA.com.
In food and beverage categories, FDR 60s- consumers aged between 61 and 70- are outpacing all households in terms of product growth rate 7.1 percent to 5.8 percent. In contrast, product growth rate for Kennedy boomers stands at 6.5 percent, while Truman boomers are up only 3.8 percent.
"Aging consumers into their 60s are past the saving, penny-pinching and taking-care-of-others phase. Instead, they are focusing on themselves, buying healthier products, or more indulgent products," said Seitzinger.
According to IRI, the most successful products with all baby boomer segments include wine, spirits and coffee, with FDR 60s leading in product purchases, followed by Trumans and lastly Kennedies.
Snack nuts and seeds are the next most popular product with older consumers, with the same purchasing order.
Breakfast meats, come next, being most popular with Kennedies, while FDR 60s come out at the top again for ice cream and sherbet products.
The younger group of baby boomers remain the most frequent consumers of soup, cold cereal, chocolate candy, bottled water, beer, salty snacks and carbonated beverages.
"We see dramatic differences in categories depending on the aging consumer segment. By understanding microsegments, we can understand which categories and solutions are the best to focus on," said Seitzinger, adding that this would allow manufacturers to "be more surgical with solutions".
And according to the analyst, the industry must realize that this consumer group is not on the decline, as some might think.
"There is a general perception that the older shopper is spending less. That's not true. They are, in fact, opening up their wallets. In some categories, they are willing to spend twice the category growth rate."
Baby boomers are the fastest growing consumer group in the US market by 120 percent or more, he said. Hispanics, who come in second, are dwarfed by aging consumers.
Indeed, according to the Food Marketing Institute (FMI), baby boomers represent 50 percent of total US spending power. The oldest among the group are now turning 60 years old at the rate of approximately 8,000 people per day.
In order to develop the most effective products and marketing strategies for baby boomers, IRI says manufacturers must: stop seeing aging consumers as all the same; be willing to step up and invest in aging solutions (products, packages, marketing programs, and retail formats); and invest to get more qualitative and quantitative information about aging consumer segments to understand needs.
