Ageing population trends and the impact on the...

Ageing population

trends and the

impact on the food

and drink industry

20 November 2014

1

The Ageing Consumer – 20 November 2014

© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Introduction

Chris Stott

Partner

Head of Food & Drink

KPMG LLP

T: + 44 (0) 7876 390546

E: [email protected]

The survey data

used today is from

the Consumer

Insights Panel,

sponsored by

KPMG.

mailto:[email protected]

The Ageing Consumer

3




A rapidly emerging demographic

Double by 2035

to 1.1 bn

Double again

by 2050 to 2 bn

By 2020, for

the first time in

history, they

will outnumber

under-fives

In the UK there

are now more

people aged 60

and above than

under 18

Over the last

century life

expectancy

increased 30

years

Of all people who have lived to be over 65, half of them are still alive today

1/3 of babies

born in the UK

now are

expected to

celebrate their

100th birthday

GLOBAL

UK

4




The World is Ageing….But not everywhere

Spain, Germany, Japan, Russia and Italy show similar ageing trends…

…however teenage population will grow fastest in Nigeria, Indonesia and India.

By 2050, 60 and

overs will make up

one-third of the

adult populations

of Spain, Germany

Japan, Russia and

Italy.

Today the

average person

is 29 years old.

This is

expected to rise

to 36 by 2050,

and 41 by 2100.

By 2050

Nigeria’s

working age

population is

expected to

have increased

by 123%.

By 2030

Indonesia is

expected to be

the fifth most

populous

country in the

world

By 2030 India is

expected to overtake

China as the worlds

most populous

country. The pace of

growth is slowing but

youthful structure

promises gains for

years to come.

5




So is this something to be wary of?

6




There are certainly concerns to be mindful of…

7




…but many of them have the Financial Clout ! £ $

8




$ 2 trillion

Average annual

spending power of

people aged 50 to 70

For the rest of the

21st century the

fastest-growing

consumer segment

in the world will be

60 +

£ $ Global view

9




75% of the

wealth owned by

Over 50’s in the

UK

Only 30% of

grocery spend is

by those with a

child under 18 in

the house.

£320 bn

UK Grey Pound

annual

household

spending

BT’s Big Button

phone sold £1.2

million in its first

year

4.4% pa

Growth in over

50’s consumer

spending last

decade

2/3rd retail sales

growth expected

from over 55’s

next decade

£ $ UK view

10




Over 50’s are far more positive about their financial situation

Your financial situation

0% 0% 1% 0% 1% 1%

41% 33%

17%

22%

19%

20%

36%

47%

60%

20-49 50-69 70+

Neither

Negative (net)

Positive (net)

Don’t know

Not applicable

11




…and are much more positive about the amount of money they have to spend

on luxuries rather than necessities

The amount of money you have to spend on luxuries rather than necessities

1% 2% 5% 1% 2% 3%

48% 37%

22%

21%

26%

28%

29% 33%

42%

20-49 50-69 70+

Neither

Negative (net)

Positive (net)

Don’t know

Not applicable

12




The over 50s have more time and money and are less likely to be cutting back

…under 50s are more likely to be cutting back.

3% 0% 2% 3% 6%

16%

40% 38% 21%

37% 39% 42%

17% 18% 19%

20-49 50-69 70+1% 0% 0% 4%

12% 12%

49% 38% 29%

26% 28%

36%

19% 22% 24%

20-49 50-69 70+

Buying food when you're out

and about

Eating out in restaurants

I spend about the same

I spend less

I spend more

I haven't bought/done this in the

past few years

Don’t know

13




The same proportion of 80+ year olds as 20-39 year olds are spending more

money on alcohol to drink at home

Changing spending habits : Alcohol to drink at home

2% 1% 1% 0% 0% 1%

16% 16% 20% 20% 19% 20%

28% 39% 28% 29%

26% 20%

32%

26% 34%

39% 38%

38%

22% 19% 17% 11%

16% 20%

20-39 40-49 50-59 60-69 70-79 80+

I spend about the same

I spend less

I spend more

I haven't bought/done this in the

past few years

Don’t know

14




Whilst all age groups say they are more budget conscious these days…

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

66%

22%

10% 2%

20-49s

62%

27%

11% 0%

50-69s

55% 30%

13% 1%

70+

…this is more marked among younger people.

Brand Loyalty

16




This age group are more loyal to brands they know and trust, and will not be swayed to

save money or on a whim

“I tend to stick to brands/products that I know and like”

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

58% 26%

15% 1%

20-49s

59% 25%

15% 0%

50-69s

71%

22%

6% 1%

70+

…but one third of people over 60 said they had been introduced to products

by children or grandchildren.

17




Brands which the over 50s feel do a good job marketing to them…

…these aren’t just ‘old brands’.

Pricing & promotion

19




With an increasing number of people living alone, volume discounting is

unlikely to resonate with those over 50.

2% 0% 1%

46% 58% 56%

20%

21% 25%

32%

20% 18%

20-49 50-69 70+

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

2% 1% 1%

16% 25%

33%

25%

26%

23%

57% 48%

42%

20-49 50-69 70+

‘I sometimes buy things I don’t

need, just because they are on offer’

‘I’ll happily buy things in bulk, so

I don’t miss out on a good deal’

…over half over 50 + year olds say pack sizes are inappropriate for their needs.

Products and packaging

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1% 0% 1% 2% 0% 1% 3% 4% 5%

41%

21% 10%

57%

19% 16%

68%

40% 35%

26%

17%

17%

15%

15% 13%

13%

25% 25%

32%

62%

72%

27%

66% 70%

16%

31% 34%

20-49 50-69 70+ 20-49 50-69 70+ 20-49 50-69 70+

I sometimes find it

difficult to open

packaging

I am not always able to

read labels on packaging

as they’re too small

I am not always able to

read menus in restaurants

because it’s too dark or the

text is too small

Those aged 50+ are significantly more likely to have trouble opening

packaging, reading labels and reading menus…

…even 30% of 20-50 year olds can’t either.

22




Is this considered during product development?

Nestle’s robotic arm : to simulate arthritis when designing packaging.

This is not being aimed overtly at older people – simply as a practical approach to extend the

usage of a product

Health & Nutrition

24




Those aged 70+ are significantly more likely to feel positive about their health

than those aged 50-69

How positive or negative do you feel about each of the following? – Your health

0% 0% 0% 1% 1% 1%

23% 27% 25%

18%

20%

14%

58% 52%

60%

20-49 50-69 70+

Age group

Neither

Negative (net)

Positive (net)

Don’t know

Not applicable

25




Those aged 70+ are less likely to pay attention to nutritional information.

I am paying more attention to nutritional information than I used to

2% 0% 1%

13% 14% 15%

24% 26% 31%

60% 60% 52%

20-49 50-69 70+

Age group

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

26




“I just try to eat a balanced diet”

20-39 40-49 50-59 60-69 70-79 80+

I just try to eat a balanced diet 64% 69% 73% 82% 83% 81%

I make sure I eat a good amount of fruit

and vegetables 56% 66% 64% 73% 74% 73%

I take vitamins or other food supplements 24% 28% 26% 31% 36% 31%

I eat smaller portions 20% 28% 25% 31% 31% 39%

I look for foods which have a specific

health benefit (e.g. cholesterol-lowering,

probiotic, vitamin-enriched, etc.)

5% 11% 8% 12% 19% 10%

In which of these ways, if any, do you take aspects of your health into account when choosing which food products to

buy/eat?

27




Whilst they generally think health benefit products are a fad, those aged 70+ are more

likely to look out for these types of products as they think they could be of benefit.

Products which claim to offer a specific health benefit

9% 7% 6% 4% 2% 4% 10% 7%

11%

6% 9% 9%

58% 56% 51%

4% 8%

10%

22% 23% 18%

22% 24%

23%

17% 20%

27%

63% 61% 67%

17% 18% 22%

70% 66%

51%

20-49 50-69 70+ 20-49 50-69 70+ 20-49 50-69 70+

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

Most of them are just a

fad

I look out for these types

of products as I think they

could be beneficial for me

These products are too

expensive to buy

regularly

…they are also least likely to agree that these products are too expensive to

buy regularly

28




Despite the view these are a fad, food and pharma companies have put a lot of

energy and money behind this growing industry…

Digestion Cholesterol Protein

Shopping Habits

30




Online

86% of over 55’s regularly shop online and over 1/3 of those aged 70 + use

online methods to find out information about food or other household

products.…

…more tablets are owned by the over 55’s than under.

31




When asked if you will use online shopping more going forward, the over 70’s are

currently unsure – but are clearly starting to think about whether they will need

to or not

22% 22%

34% 35%

46% 46% 6% 4%

4% 4%

5% 4%

52% 52%

49% 48%

35% 32%

21% 21% 14% 13% 13%

18%

20-39 40-49 50-59 60-69 70-79 80+

I will use online grocery shopping more than

I currently do

I will use online grocery shopping the same

amount as I currently do

I will use online grocery shopping less

than I currently do

Don’t know

Age group

32




Whilst Online needs to be carefully considered, the ‘social experience’ of

shopping is also key

11%

14%

18%

8%

10%

15%

0%

5%

10%

15%

20%

25%

20-49 50-69 70+

‘I enjoy the sociable aspect of going shopping’

‘I’ll often stop for a coffee when I’m doing my food shopping’

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://sculpturebythelakes.co.uk/?attachment_id=4064&ei=xLlhVNv8N8jY7AbZgoDwDA&bvm=bv.79189006,d.ZGU&psig=AFQjCNGbopq3kTGub0MHUCcLZI8uH0a6yg&ust=1415777111802007

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I welcome help and advice

9% 10%

22%

0%

5%

10%

15%

20%

25%

30%

20-49 50-69 70+

‘I prefer to shop at stores

where I can get help or advice’

http://en.wikipedia.org/wiki/File:B&Q_company_logo_(2).png

Advertising

35




Few of us consider ourselves to be ‘Old’

http://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://socialvictoria.blogspot.com/2011/05/why-you-should-hire-me-and-other-young.html&ei=rPFfVJyoFM26aaD0gbAB&bvm=bv.79189006,d.ZGU&psig=AFQjCNEeLr1u7hVqDBw6BCLQKk2csQLMnw&ust=1415660323813090



http://navigatingpca.com/wp-content/uploads/2012/08/AgingBoomerCartoon1.jpg

36




Most advertising for ‘everyday’ products seems to be targeted towards mums

and families

Most advertising for ‘everyday’ products seems to be targeted towards

mums and families’

8% 9% 6%

6% 6% 5%

21% 23%

20%

65% 61% 69%

Total Men Women

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

37




Most aged 60+ feel they don’t see people their age in advertising

I don’t see many people my age in adverts

10% 8% 8% 5% 6% 4%

55%

31% 23%

15% 15% 12%

26%

35%

39%

34% 32%

24%

9%

26% 30%

45% 47%

60%

20-39 40-49 50-59 60-69 70-79 80+

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

38




Most agree it would be refreshing to see older consumers in advertising to

promote ‘everyday’ products

It would be refreshing to see older consumers in advertising

to promote ‘everyday’ products

11% 4% 5% 4% 5% 8%

11%

5% 6% 5% 5% 9%

29%

25% 24% 27% 22%

27%

48%

66% 65% 63% 67%

56%

20-39 40-49 50-59 60-69 70-79 80+

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

39




Good old JR Hartley!




40




However, only a minority say they pay more attention to advertising with

people of their own age featured.

I take more notice of advertising that features people my own age

14% 8% 7% 7% 5% 6%

35%

30% 36% 34%

29% 32%

29%

36%

40% 40%

39% 35%

22% 26%

17% 19% 27% 27%

20-39 40-49 50-59 60-69 70-79 80+

Neither (3)

Disagree (net 1+2)

Agree (net 4+5)

Not sure

6%

30%

37%

27%

Net 70+

People over 60 are aware of their age, but don’t want to be reminded of it

41




In summary

1. The demographics of the ageing consumer is a very exciting trend

2. Indeed they will be the fastest growing consumer population in the next

10 years “2/3rd retail sales growth expected from over 55’s next decade”

3. They are tech savvy

4. They have money to spend & don’t mind spending it!

5. They have time to shop and enjoy the experience

6. Very few consumer businesses have tailored their price, promotion

mechanic or packaging for the ageing consumer

7. Whilst they have a balanced diet they would consider products with

specific health claims if they are relevant, is there more these companies

need to do in all categories to market their products?

8. No-one sees themselves as ‘old’ – therefore advertising would seem to be

better focused on the product attributes and attitudes rather than

specifically targeting the aged consumer

42




Q&A ?

© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG

Europe LLP and a member firm of the KPMG network of independent member

firms affiliated with KPMG International Cooperative, a Swiss entity. All rights

reserved.

The KPMG name, logo and “cutting through complexity” are registered trademarks

or trademarks of KPMG International Cooperative (KPMG International).

The information contained herein is of a general nature and is not intended to

address the circumstances of any particular individual or entity. Although we

endeavour to provide accurate and timely information, there can be no guarantee

that such information is accurate as of the date it is received or that it will continue

to be accurate in the future. No one should act on such information without

appropriate professional advice after a thorough examination of the particular

situation.

In conjunction with :

https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&ved=&url=https://yougov.co.uk/&ei=j1diVMaeKrHCsAS-x4DYAQ&bvm=bv.79189006,d.cWc&psig=AFQjCNFft8RSn7CRnyJwThUsMMm5VxSlVA&ust=1415817488161038

Ageing population trends and the impact on the...

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