A new report by Datamonitor shows that by 2005, compared to 2000, Europe will have five million more singles, eleven million fewer people living as part of a family and an additional 1.4 million couples without children.
At the same time, the number of under-18s will shrink by nearly three and half million while the number of retirees will increase by 6 million. Looking at our buying habits, today’s consumer is unrecognisable from that of the mid to late 80’s; we’re now more individualistic and want our purchases to reflect a different set of personal values, says the report.
Examining food habits reveals that vegetarianism is on the wane while meat-reducing is in vogue. Many marketers are underestimating how these changes will affect their market; accounting for the latest consumer developments, especially the new and emerging consumer groups, will be essential in the future.
The need for marketers to re-assess their view of consumers has never been greater for two reasons. First, the focus of marketing is changing and marketers need to segment their consumer audiences in a manner that allows interpretation of consumer lifestyles, behaviour and needs. Secondly, a number of specific food, drinks and personal care consumer groups have emerged which marketers need to be aware of.
Nuclear explosion – the breakdown of the family
Family life continues to change with the number of people living in nuclear family units declining, leading to a growth of consumers being classified either as Singles or Couple Without Kids or Single Parents. In 2000, 37.1% of the population of Europe lived as part of a Nuclear Family unit, but this will decrease to 34.1%, or 132.7 million consumers, by 2005. In such a short space of time this represents a massive social change, and the increasing population classified as “Singles” over the period, up from 75.6 million in 2000 to 81.0 million in 2005, indicates that marketers will need to reassess product and sales strategies to account for this.
A couple of marketing groups that many marketers have on their minds will also grow. There will be an additional 1.4 million Couples Without Kids, often called DINKYs (Dual Income No Kids Yet) in 2005 compared to 2000. Empty Nesters, those over the age of 50 without dependent children, are also in the increase. In 2000 there were 58.9 million people belonging to this group, but this will increase to 63.7 million in 2005.
The seniors are coming…
The ageing of the population is much talked about, but the statistics are still staggering and will force those involved in youth marketing to think again. The number of people in the Seniors group (those aged over 50) will increase from 121.8 million in 1995 to 139.9 million in 2005. Looking at the size of the Retirees group highlights that there is much for marketers to be interested in. The number of Retirees, who have free time and often have large amounts of disposable income, will increase from 75.5 million in Europe in 2000 to 81.1 million in 2005.
Modern lifestyles will also change the age pattern at the other end of the scale. Single lifestyles, people delaying marriage and childbirth and the pursuit of the career has already caused the size of the youth market to fall and this trend will continue. The number of children aged between 3 and 9 years old in Europe will fall from 2000 levels by 2.6 million to reach 30.8 million in 2005. There will also be a reduction in the number of babies, teenagers and “tweenagers” (those between 10 and 13 years old) over the same period.
“These massive demographic changes will force marketers to reassess their priorities. With numbers in the youth market dwindling and the emergence of a greater number of increasingly aspirational consumers over the age of 50, youth marketing may remain cool, but there may be “cooler” money to be made elsewhere,” comments Piers Berezai, Datamonitor consumer analyst and author of the report.
Vegetarianism slows, but number of meat-reducers increases
Today’s consumer is unrecognisable from that of the mid to late 80’s; we’re now more individualistic and want our purchases to reflect a different set of personal values. Consumer’s are concerned about health, food ethics and indulgence and are demanding products that offer one or more of these features. As a result, different types of purchasing behaviour are emerging. More consumers are choosing vegetables over red meats, organic foods over non-organic, services over conducting chores and “added-value” functional goods with specific health benefits.
Vegetarianism is another trend that is on the wane, and is being overshadowed by the growing number of Meat Reducers. Following rapid development in 1980s and early 1990s, future growth will be much slower. In 2000 there were 11.3 million vegetarians, but this is forecast to increase to 12.1 million in 2005. Instead, the real interest in now on reducing meat, especially red meat, intake in order to maintain and improve health. The much larger group of Meat Reducers, which numbered 135.2 million in 2000, will increase to 146.8 million in 2005.
More ‘loyal’ organic users by 2005
Organic foods have now become a familiar sight on retailers’ shelves, but there are two very different types of organic food consumers. First, there are the Loyal Users who regularly consume organic goods and try to make as many organic food purchases as possible. Secondly, there are the Occasional Users who infrequently purchase and consume organic foods, or only consume organic foods from one category. Overall, in 2000 there were 16.1 million Loyal Users in Europe and this is set to increase to 46.1 million by 2005. Indeed, although the Occasional Users group will increase from 101.7 million consumers to 161.1 million over the same period, Loyal Users will account for a greater share of all people eating organic foods and drinks in 2005 than in 2000. This represents a reversal of the trend between 1995 and 2000.
The number of consumers effectively ‘outsourcing’ chores to service providers is growing rapidly. The number of people using home cleaning services will increase from 35.8 million in 2000 to 56.2 million in 2005, a compound annual growth rate of 9.4%. Those using laundry services will grow even faster. By 2005 this group will grow to 32.4 million consumers, up from 15.3 million in 2000, an annual average growth rate of 16.2%.
Consumers demand more than the basics
In both food and drinks, and personal care, consumers it seems just aren’t happy with only basic functions. They want more and the incorporation of ingredients with specific health benefits into goods appears to meet that need. The number of Functional Consumers, who regularly eat “nutraceuticals” that contain ingredients that offers specific health benefits, like Yakult and Benecol products, in 1995 was just 5.4 million. In 2000 this had increased dramatically to 16.3 million is set to reach 24.0 million consumers by 2005.
In personal care the story is slightly different, as the number of people using “cosmeceuticals”, or personal care products which include active ingredients that have a bio-active effect, such as Retinol, is already very large. In total, in 2000, there were 150 million regular users of cosmeceuticals and by 2005 an additional 6 million consumers will regularly using these beauty products.