US market update: Holding on to Baby Boomers
BY Michael Johnson
As someone who conducts a fair amount of market and consumer research in pet, I am frequently asked where the industry is headed. I do not profess any clairvoyance here, but am always happy to offer an opinion: I am bullish on this class of trade. We've posted solid year-on-year gains for the past twenty years, and weathered a few bubbles, several recalls, and one big recession. In short, pet rocks!
But there will be a few challenges that will need to be overcome. One of the things that concerns me is the future of the Baby Boomers. As a quick refresher, the Baby Boomers are the generation of over 75 million persons born between 1945 and 1964. This cohort quickly set the American standard for achievement, earnings and wealth. In fact, the Baby Boomers are some of the best consumers the world has ever seen. This is the group that really made the US economy what it is today, and much of the pet business we know today took flight on the broad economic shoulders of this segment.
Unfortunately, this demographic is aging (the first of the Boomers turned 65 in 2010, and 10,000 more reach 65 each and every day), and the subsequent generation of consumers, Generation X, is not as large in either size or wealth. In fact, it has been supposed that persons over age fifty control 65%-75% of net worth in this country, so clearly we want to hold on to this consumer as long as possible.
From a pet perspective, Boomers today are a great market as their empty nests and eventual retirement free up time and create the need for companionship, and their larger-than-average disposable incomes make them ideal pet owners. The human need for companionship continues to increase with age; today nearly half of seniors are single, so why shouldn't this group remain a viable market for years and years to come?
Therein lies my concern. Historically, once a person reaches their mid-seventies, their desire and ability to interact and to care for a pet drops off precipitously. This despite the fact that study after study has confirmed the physical and psychological benefits of pet companionship among seniors. How do we as an industry drive the need for pets and help septuagenarians continue to enjoy pet ownership?
Fortunately, one of the most impressive and resilient things about the non-conformist Baby Boomer generation has been its ability to redefine the world. Boomers today are changing the rules on wealth, home ownership, travel and health care, and they are also redefining what it means to age. It is quite possible that this dynamic segment may also redefine pet ownership as seniors. Hopefully, tomorrow, the mid-seventies decline in pet ownership we've observed with other generations will no longer apply and the Boomers will continue to own pets into their 80s and 90s (and, yes, more and more will be living that long).
So how do we help make that future happen? Here are a few 30,000 foot suggestions for marketing petfood to the Baby Boomers:
- With empty nests and retirement, this segment is downsizing. We'll see more cats and small animals, so think smaller pack size and serving sizes.
- Boomers are big label readers, so educate them through your packaging. They are also more likely to take product recommendations from vets and trainers, so enlist these people to help talk to them for you.
- As high-achieving super consumers, Boomers have always been about top-quality products with self-expressive benefits. Products that say "I've earned it and I'm worth it." They are brand loyal, but they crave variety and excitement so they will switch for the new and shiny and the best and brightest. Boomers also feel they know how to get a good deal, so they'll also switch occasionally on price.
- As they've aged, Boomers have become very life stage aware; they realize they don't feel at 50 and 60 how they felt at 30 and 40. This has caused many of them to be aware of their pet's life stage as well. To that end, age, life stage, obesity and even diabetes pet product formulations should be key trends as this segment advances. In addition, many Boomers regularly take vitamins and supplements and they believe these are important for their pets, as well. Super foods and holistic formulations will continue to be hot items with this segment. (See Figure 3 to see what the average US consumer thinks of specialized petfood formulas.)
- Develop more products and packaging for people with limited dexterity, strength or range of motion-for example, collars and leads with larger buckles and clasps; food and treat products that are easy-dispensing or even self-dispensing; waste disposal products that are self-cleaning; storage products that are elevated; etc., just to name a few.
Pets have been great for the Baby Boomers, and, in turn, this generation has been great for pet. Let's continue to find ways to make pet ownership attractive and easy for them.