Demographic Shifts Are Creating New Product Opportunities

While the retail world is changing, the demographic mix of consumers is in flux. The ethnic population is booming, the senior segment is growing, and the eclectic Generation Y kids are expanding. Consumers are taking advantage of their channel options, as heavy category buyers satisfy their needs across multiple retail channels.

Clearly, demographic changes are reshaping the U.S. food industry. Rising average age, growing ethnic diversity and changing lifestyles are important trends. The baby boomer generation accounts for nearly 77 million people between the ages of 37-55, or 30% of the U.S. population. These consumers focus more on nutrition and weight maintenance, have less time available for exercise and have slowing metabolisms.

Children aged 5 to 17 are also an important segment and are projected to grow as a group to 52.4 million by 2005, according to Census Bureau estimates.


Perimeter Categories Are Ripe for Brand Extensions

Some of the product categories accounting for the largest percentage of buying households are food, beverages and snacks. With almost 100% penetration, the top ten list includes: breads and baked goods; fresh produce; paper products; fresh meat and poultry; snacks; cheese; condiments; gravies and sauces; candy; milk and carbonated beverages.

According to recent studies, fresh produce, breads and baked goods bring consumers back into stores about every eight or nine days. So grocery retailers spend much time and energy focused against their perimeter departments.

Many marketers agree that it is these perimeter categories that represent excellent branding opportunities. Indeed, brand licensing has been quite successful in several “commodity” categories of the produce aisle: Green Giant, Mott’s, Welch’s and Tropicana have all expanded into fresh fruit via licensing.

Perhaps the most important consideration for licensors is to understand and plan for the often too short life cycle of new food products. For many licensors, this limiting factor is offset by the many benefits of developing a new brand extension product with national distribution and strong appeal.


Author Bio

Kirk Martensen is President of Goldmarks Company, a Chicago-based consultancy that specializes in brand extension licensing. Kirk can be contacted at (773) 529-7500 or kirkm@goldmarks.net

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