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07/01/2014

Times & Trends: Aging America - Unlocking Growth in Mature Markets

Unprecedented size, growth and buying power make the mature market critically important for CPG companies, according to IRI's Times & Trends report Boomers & Seniors: Carving Out Growth in Mature Markets.

The boomer/senior market accounts for more than 50 percent of CPG spending, or about $200 billion across IRI's multi-outlet geography last year. By 2020, spending will soar past $230 billion, with non-prescription healthcare products alone topping $18 billion. These figures are expected to continue to escalate as the ranks of older consumers swell in the future.

Robert J. Sanders Jr., EVP/Practice Leader
Healthcare Vertical, IRI

Self-care is playing a significant role in the lives of consumers today. Preventative care is a key strategy, for boomers and seniors are finding it's more convenient and less costly to maintain good health today than to face chronic disease later in life. As a result, older consumers spend a disproportionate amount on preventative care and simple health care solutions. Accordingly, sales of these products are showing and will continue to show exceptional growth in the mature marketplace.

Americans as a whole have made healthier changes in their day-to-day lifestyles like more exercise, more vitamins/supplements, and fewer "treat" foods. Generally, these healthy behaviors increase with age.

Illustrated by IRI's most recent New Product Pacesetters report, healthier-for-you has spread across CPG aisles, and these products are being very well received by consumers. While some functional foods, such as intrinsic health value bars and tea, are enjoying strong growth, spending on other foods that support healthy living is below average among mature consumers. In some instances, growth is lagging. This is a disconnect that must be addressed by CPG manufacturers and retailers.

Activating older shoppers will require an adept ability to serve the many and varied needs of a disparate marketplace concisely and consistently. To be a resource and partner on the road to wellness, retailers must crack the code on customization, tackling wellness first from a prevention standpoint, but also with finely targeted disease state management strategies, where warranted. Despite what one might assume, social media is a critical part of any program that seeks to market to and educate seniors and boomers. Messages across platforms must be highly targeted to consumers' abilities and preferences. The impact of a variety of new media tools varies drastically across age cohorts due to a number of factors, including device ownership and level of comfort with the platform. The good news is nearly three quarters (71 percent) of boomers and 59 percent of seniors visit social media networking sites daily.

Educate consumers about common health-related issues and the benefits of products/ingredients found in healthcare aisles
PROJECTED ANNUAL GROWTH: KEY HEALTHCARE CATEGORIES DOLLAR SALES 2014-2016 (P)
 AverageSeniors
Gastrointestinal Liquid0% to 2%6% to 8%
Home Health Care/Kits-1% to 1%4% to 6%
Vitamins3% to 5%2% to 4%
Gastrointestinal Tablets0% to 2%0% to 2%
Internal Analgesics-2% to 0%1% to 3%
Source: IRI Consumer Network™ 52 weeks ended 2/9/2014; IRI Market Advantage™ 52 weeks ended 5/18/2014 and same periods prior years

INDEX OF CONSUMERS VERY OR SOMEWHAT CONCERNED WITH THE ISSUE BY SEGMENT
Source: IRI MedProfiler

Emphasize the important role nutrition and prevention play in healthier living
PERCENT OF CONSUMERS DOING THE FOLLOWING ON MOST DAYS BY SEGMENT
Source: IRI MedProfiler

PROJECTED ANNUAL GROWTH: FUNCTIONAL FOOD CATEGORIES DOLLAR SALES 2014-2016 (P)
 
Average
Seniors
Wheat Germ
-6% to -4%
-4% to -2%
Intrinsic Health Value Bars
10% to 12%
17% to 19%
Refrigerated Tea
6% to 8%
3% to 5%
Sports Drinks
3% to 5%
3% to 5%
Energy Drinks
9% to 11%
7% to 9%
Source: IRI Consumer Network™ 52 weeks ended 2/9/2014; IRI Market Advantage™ 52 weeks ended 5/18/2014 and same periods prior years

TIP: Carve pockets of growth with a portfolio of marketing strategies that reflects a full appreciation of the diversity and individuality across the boomer and senior marketplace.

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