« September 2005 Table of Contents
Trend Watch: Boomers' dollars up for grabs
Altered spending patterns of retirement-age Baby Boomers will keep retailers and restauranteurs on their toes
September 01, 2005
As Baby Boomers approach retirement in the next 10 years, their spending habits and lifestyles are likely to change dramatically. At 78 million strong, they represent the largest consumer group in the foodservice industry, so these changes will undoubtedly affect marketing strategies for both restaurants and grocery stores.
Boomer households with kids spend roughly 25 percent more than those without kids, finds a study by Information Resources Consumer Network. And more Boomers will become Empty Nesters as they head toward retirement age, which will reduce household spending.
“Categories catering to the needs of busy families, such as convenience meals, will likely be especially hard hit, particularly given the fact that the next generation of families, Generation X (age 25 to 34), is only 60 percent as large as the Boomer population,” the study says.
“I call Baby Boomers the ‘burned-out generation,’ because they don’t want to cook,” says Amy Barr, a registered dietician based in Longmont, Colo. “They want easy, take-home solutions that emphasize convenience, health orientation and fresh taste.”
This is good news for those in the business of seafood, says Joyce Nettleton, a nutrition consultant in Denver. “Retired people tend to spend less time in the kitchen, she says, “and seafood suits them perfectly, because it’s easy and quick to cook, and it’s adaptable to many presentations — spicy or plain, prepared indoors or outdoors.”
Nettleton believes that this interest in easy preparations, coupled with the increasing attractiveness of the seafood counter at many grocery stores, will drive sales of seafood, rather than creating a slump.
“In the past, people didn’t trust the supermarket as a source of high-quality seafood, but it is [a well-regarded source] now,” she says.
“That’s because grocers are putting more care into the fresh iced counters, and high-quality frozen product is now available year-round, when it wasn’t before.”
Another recent study, this one by the NPD Group, concludes that Boomers will increasingly spend their post-retirement free time preparing homemade meals, a speculation that bodes well for grocers.
There are several things grocers could do to prepare for the onslaught of retired Baby Boomers and their anticipated demand for easy, convenient food. At the fresh-fish counter, they should be reexamining their merchandising, says Evie Hansen, founder of National Seafood Educators.
“Each of the seafood items needs to be pulled out to fit the demographic demands,” she notes. “For example, do Boomers want fresh seafood as a boneless product, with lots of omega-3 fatty acids, or increased DHA amounts? Retailers need to take a second look at how they’re showcasing their seafood and provide recipes that are quick, easy and full of flavor.
“Seafood is under-merchandised in general,” Hansen adds. “The major reason for a successful seafood counter is the quality of the product and the consumer trust of the individual behind the counter.”
Another strategy grocers could adopt is to beef up the deli section, oftentimes a lackluster department.
“Some delis are doing amazing things for takeout, and the deli is a great place for seafood,” says Barr. “In my local supermarkets, deli staff has incorporated bits of seafood into grain and vegetable-based salads, coupling that with beautiful presentation. That kind of thing is great for Baby Boomers, because it allows them to select individual servings of food items.”
Barr adds that a single-serve convenience aisle in the grocery store would be very popular with all demographics — Boomers, Generation Xers and Echo Boomers (ages 12 to 24) — who are looking for quick, easy foods.
“An aisle like that would contain, for example, Ramen Noodles,” says Barr. “Bean dishes that are quickly cooked when you add water are also going to be popular among Boomers, because they’re high in fiber and contain resistance starch, which means they’re good for diabetics.”
The aisle would also feature, for example, fish dishes, such as fish in a pouch that can be heated in the microwave.
“People would love this concept, because that way, you wouldn’t be left with the smell of fish in your house,” Barr says. “The sodium levels of such products certainly have to be reduced, but ideally, it would be like an upscale version of Tuna Helper.”
One problem in the grocery store is the segregation of fresh seafood from shelf-stable, says Hansen.
“Baby Boomers are more likely to look at shelf-stable products because they’re more comfortable with canned food than other consumer groups, and they also likely shop fewer times per month,” she says.
Barr agrees: “Canned foods haven’t gone out of style, but we’re seeing better delivery systems in terms of their packaging, which will make a difference in preserving taste, flavor and heatability of these products. And the more delivery systems you have that offer people a fresh taste of fish quickly and conveniently, the more likely they are to try it.”
Others disagree, saying that while seafood is a popular choice for Boomers, its popularity is largely confined to restaurant menus.
“The Baby Boomers are still going to be eating out when they’re retired,” says Marion Nestle, professor of nutrition at New York University.
“These are people who haven’t cooked in years, and they’re not going to start now. They’re going to want it big and cheap, just like everyone else does. And you only have to eat at Red Lobster to see how fish is being consumed in America,” she says.
Boomers tend to eat out slightly less often than other consumer groups, according to research conducted by the National Restaurant Association. But when they do eat out, they spend more.
A 2005 NRA Industry Forecast suggested that the 45-to-54-year-old age group eats out an average of 5.2 times per week, as compared to 55-to-64-year-olds, who eat out 5.0 times per week.
“Basically, over a period of time, the foodservice industry adapts to changes in the marketplace,” says Rob Ebbin, NRA’s senior director of research projects. “As the Boomers age, the industry will look for ways to accommodate changes in consumer demand and provide services that will attract those consumers to eat out more frequently.”
This will be especially important, he notes, if grocery stores compete with restaurants by providing a wider variety of take-out offerings. One way restaurants can woo Boomers is by adjusting their menu offerings to cater to the special dietary needs of an older customer base, he adds.
While the spending patterns of retirement-age Boomers may change, they still represent a significant market whose dollars will be up for grabs.