Seniors’ Spending Power Poised to Skyrocket
24 Oct 2016 --- Multinational food packaging and processing company Tetra Pak has released a comprehensive study into the world’s fastest growing consumer group, seniors, and how their spending power is forecast to hit US$10 trillion by 2020. The consumer study highlights opportunities in the food and beverage market for people aged over 60 and what aspects companies should consider when appealing to this demographic - one of the most important consumer groups over the next decade.
The report looks into the needs of seniors and why they will be so influential in years to come. Aside from having much more disposable income compared with other demographics like Generations X-ers and Millennials, seniors have different needs to others and put their emphasis on different products.
“Seniors spend 20 percent of their income on food and beverages. They have more disposable income than previous generations, and are poised to become one of the most important consumer groups over the next decade with a total spending power of US$10 trillion by 2020. This creates a huge opportunity for manufacturers to respond to their needs,” says VP Global Marketing at Tetra Pak, Libby Costin.
According to Tetra Pak, currently only one percent of global innovation is directed towards the senior consumer group, despite one in five people reaching this age group by 2020.
One of the major aspects for seniors is brand loyalty with 30 percent of seniors saying that once they find a brand that satisfies them, they tend not to experiment with new ones. They also tend to shop closer to home, and in smaller stores. In terms of what they value; more than half (54 percent) look for food and drink that will improve their health, 88 percent equate value with high quality and are willing to pay more for these products and 97 percent of seniors think family is a factor in leading a happy life.
Generally seniors also prefer traditional tastes to ‘experimental’ ones which extended beyond the product to packaging; they want packaging that looks and feels traditional, rather than appearing overly radical or be ‘different for different sake’.
Packaging plays an important role in helping beverage manufacturers succeed in meeting the needs of this increasingly influential consumer group
Seniors dislike being made to feel “old” by marketers or patronized by packaging. Instead they prefer products and packaging that are subtle; ones that are ageless but appeal indirectly to their demographic, rather than those that appear directly targeted at them because of their age. For example, they find “For Seniors!” branding unappealing.
For packaging to be senior-friendly, it also needs to consider aspects like using larger prints, more striking images, clear labeling and provide easy open packages to account for reduced wrist strength, use lightweight but robust packages to make it easier for seniors to hold and carry and also create packaging that better preserves shelf life to minimize shopping trips. Tetra Pak says that round cross-sections are also easier for seniors to hold than those with a square cross-section. Packaging material needs to be firm so it is easier to grip and prevents spillage. Overall there needs to be emphasis on easy handling, easy to read and easy to understand the marketing messages with a prominent display of nutritional information.
Seniors Take Their Health Seriously
As seniors value health so highly, the Tetra Pak report says that food and beverage companies should consider fortified products with healthy ingredients, delivering products with less sugar, fat and salt, as well as adding extra minerals and vitamins.
“54 percent of those aged 65 and over use food and/or drinks to improve their health. So there is a premium on focusing on products that meet those needs. They are also the generation that avoids fast food the most. There is therefore a need for products that focus more on a natural, healthy lifestyle. For example: Vegetables are at the centre of a healthy lifestyle. So, in Japan, concentrated vegetable juice has been developed. This is a product that meets the requirements of a healthy and enjoyable diet, targeted at seniors,” the report says.
It also mentions the first fortified white milk which has been produced for senior adults in China. This involves high-quality raw milk from selected farms with a rich, creamy, feel. It comes in two variants: for bone health with vitamin D and for heart protection with fish oil and lecithin.
“Seniors are heavy consumers of vitamins and supplements. Food and drinks that are fortified with additional minerals and vitamins in order to promote stronger bones, or better digestive or cardiovascular health, are of significant interest. There is a particular opportunity for foods and products which meet these needs in developed markets, where there are higher incomes and greater awareness of health issues.”
Milk as a Key Product
According to the report, there is huge opportunity for food and beverage firms to target seniors with milk products. Milk answers all their key needs; it is healthy, natural and can often be produced locally.
“Most older consumers find the concept of food and drinks that are naturally high in nutrients appealing. While the consumption by seniors of beverages is lower in general compared to younger adults, that of milk is higher. For manufacturers to target seniors more effectively, they should better highlight the natural health benefits of milk, promoting for example the use of calcium to strengthen bones as well as vitamin B2 to maintain good nerve function.”
“They should also highlight where possible the local provenance of the product. In addition, many producers are seeing growing success in ‘value-added milk’, with healthy supplements included or otherwise tailored to specific needs. For example producers have seen growing sales of milk products that have anti-oxidants.”
“At the same time, products which remove certain ingredients such as fat or lactose are also growing in popularity. Milk naturally meets seniors’ needs and is effective at supporting a healthy lifestyle. There is therefore an opportunity for manufacturers to put greater emphasis on developing products that even more closely match the desires of this important demographic group.”
The number of people aged over 60 is growing, as is their spending power, concludes Tetra Pak, and only way for the industry to maximize opportunities is to really tap into what seniors need and want by understanding the drivers of seniors’ lifestyles.
“The challenge for the food and drink packaging industry is to develop products and services that better meet their needs while keeping those products relevant for other age groups. The opportunities however are enormous. Producers that develop packages that meet the needs of people who have money to spend and time to spend it will be able to tap into a growing demographic that is only set to become more influential in the decades ahead.”
FoodIngredientsFirst recently spoke with Anders Yngwe-Söderstjerna, Tetra Pak’s Manager Centre of Expertise Prepared Food, about packaging and the company’s processing systems for prepared food.
by Gaynor Selby
