Ageing population
trends and the
impact on the food
and drink industry
20 November 2014
1
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Introduction
Chris Stott
Partner
Head of Food & Drink
KPMG LLP
T: + 44 (0) 7876 390546
The survey data
used today is from
the Consumer
Insights Panel,
sponsored by
KPMG.
The Ageing Consumer
3
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
A rapidly emerging demographic
Double by 2035
to 1.1 bn
Double again
by 2050 to 2 bn
By 2020, for
the first time in
history, they
will outnumber
under-fives
In the UK there
are now more
people aged 60
and above than
under 18
Over the last
century life
expectancy
increased 30
years
Of all people who have lived to be over 65, half of them are still alive today
1/3 of babies
born in the UK
now are
expected to
celebrate their
100th birthday
GLOBAL
UK
4
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The World is Ageing….But not everywhere
Spain, Germany, Japan, Russia and Italy show similar ageing trends…
…however teenage population will grow fastest in Nigeria, Indonesia and India.
By 2050, 60 and
overs will make up
one-third of the
adult populations
of Spain, Germany
Japan, Russia and
Italy.
Today the
average person
is 29 years old.
This is
expected to rise
to 36 by 2050,
and 41 by 2100.
By 2050
Nigeria’s
working age
population is
expected to
have increased
by 123%.
By 2030
Indonesia is
expected to be
the fifth most
populous
country in the
world
By 2030 India is
expected to overtake
China as the worlds
most populous
country. The pace of
growth is slowing but
youthful structure
promises gains for
years to come.
5
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
So is this something to be wary of?
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The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
There are certainly concerns to be mindful of…
7
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
…but many of them have the Financial Clout ! £ $
8
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
$ 2 trillion
Average annual
spending power of
people aged 50 to 70
For the rest of the
21st century the
fastest-growing
consumer segment
in the world will be
60 +
£ $ Global view
9
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
75% of the
wealth owned by
Over 50’s in the
UK
Only 30% of
grocery spend is
by those with a
child under 18 in
the house.
£320 bn
UK Grey Pound
annual
household
spending
BT’s Big Button
phone sold £1.2
million in its first
year
4.4% pa
Growth in over
50’s consumer
spending last
decade
2/3rd retail sales
growth expected
from over 55’s
next decade
£ $ UK view
10
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Over 50’s are far more positive about their financial situation
Your financial situation
0% 0% 1% 0% 1% 1%
41% 33%
17%
22%
19%
20%
36%
47%
60%
20-49 50-69 70+
Neither
Negative (net)
Positive (net)
Don’t know
Not applicable
11
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
…and are much more positive about the amount of money they have to spend
on luxuries rather than necessities
The amount of money you have to spend on luxuries rather than necessities
1% 2% 5% 1% 2% 3%
48% 37%
22%
21%
26%
28%
29% 33%
42%
20-49 50-69 70+
Neither
Negative (net)
Positive (net)
Don’t know
Not applicable
12
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The over 50s have more time and money and are less likely to be cutting back
…under 50s are more likely to be cutting back.
3% 0% 2% 3% 6%
16%
40% 38% 21%
37% 39% 42%
17% 18% 19%
20-49 50-69 70+1% 0% 0% 4%
12% 12%
49% 38% 29%
26% 28%
36%
19% 22% 24%
20-49 50-69 70+
Buying food when you're out
and about
Eating out in restaurants
I spend about the same
I spend less
I spend more
I haven't bought/done this in the
past few years
Don’t know
13
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The same proportion of 80+ year olds as 20-39 year olds are spending more
money on alcohol to drink at home
Changing spending habits : Alcohol to drink at home
2% 1% 1% 0% 0% 1%
16% 16% 20% 20% 19% 20%
28% 39% 28% 29%
26% 20%
32%
26% 34%
39% 38%
38%
22% 19% 17% 11%
16% 20%
20-39 40-49 50-59 60-69 70-79 80+
I spend about the same
I spend less
I spend more
I haven't bought/done this in the
past few years
Don’t know
14
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Whilst all age groups say they are more budget conscious these days…
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
66%
22%
10% 2%
20-49s
62%
27%
11% 0%
50-69s
55% 30%
13% 1%
70+
…this is more marked among younger people.
Brand Loyalty
16
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
This age group are more loyal to brands they know and trust, and will not be swayed to
save money or on a whim
“I tend to stick to brands/products that I know and like”
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
58% 26%
15% 1%
20-49s
59% 25%
15% 0%
50-69s
71%
22%
6% 1%
70+
…but one third of people over 60 said they had been introduced to products
by children or grandchildren.
17
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Brands which the over 50s feel do a good job marketing to them…
…these aren’t just ‘old brands’.
Pricing & promotion
19
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
With an increasing number of people living alone, volume discounting is
unlikely to resonate with those over 50.
2% 0% 1%
46% 58% 56%
20%
21% 25%
32%
20% 18%
20-49 50-69 70+
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
2% 1% 1%
16% 25%
33%
25%
26%
23%
57% 48%
42%
20-49 50-69 70+
‘I sometimes buy things I don’t
need, just because they are on offer’
‘I’ll happily buy things in bulk, so
I don’t miss out on a good deal’
…over half over 50 + year olds say pack sizes are inappropriate for their needs.
Products and packaging
21
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
1% 0% 1% 2% 0% 1% 3% 4% 5%
41%
21% 10%
57%
19% 16%
68%
40% 35%
26%
17%
17%
15%
15% 13%
13%
25% 25%
32%
62%
72%
27%
66% 70%
16%
31% 34%
20-49 50-69 70+ 20-49 50-69 70+ 20-49 50-69 70+
I sometimes find it
difficult to open
packaging
I am not always able to
read labels on packaging
as they’re too small
I am not always able to
read menus in restaurants
because it’s too dark or the
text is too small
Those aged 50+ are significantly more likely to have trouble opening
packaging, reading labels and reading menus…
…even 30% of 20-50 year olds can’t either.
22
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Is this considered during product development?
Nestle’s robotic arm : to simulate arthritis when designing packaging.
This is not being aimed overtly at older people – simply as a practical approach to extend the
usage of a product
Health & Nutrition
24
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Those aged 70+ are significantly more likely to feel positive about their health
than those aged 50-69
How positive or negative do you feel about each of the following? – Your health
0% 0% 0% 1% 1% 1%
23% 27% 25%
18%
20%
14%
58% 52%
60%
20-49 50-69 70+
Age group
Neither
Negative (net)
Positive (net)
Don’t know
Not applicable
25
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Those aged 70+ are less likely to pay attention to nutritional information.
I am paying more attention to nutritional information than I used to
2% 0% 1%
13% 14% 15%
24% 26% 31%
60% 60% 52%
20-49 50-69 70+
Age group
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
26
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
“I just try to eat a balanced diet”
20-39 40-49 50-59 60-69 70-79 80+
I just try to eat a balanced diet 64% 69% 73% 82% 83% 81%
I make sure I eat a good amount of fruit
and vegetables 56% 66% 64% 73% 74% 73%
I take vitamins or other food supplements 24% 28% 26% 31% 36% 31%
I eat smaller portions 20% 28% 25% 31% 31% 39%
I look for foods which have a specific
health benefit (e.g. cholesterol-lowering,
probiotic, vitamin-enriched, etc.)
5% 11% 8% 12% 19% 10%
In which of these ways, if any, do you take aspects of your health into account when choosing which food products to
buy/eat?
27
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Whilst they generally think health benefit products are a fad, those aged 70+ are more
likely to look out for these types of products as they think they could be of benefit.
Products which claim to offer a specific health benefit
9% 7% 6% 4% 2% 4% 10% 7%
11%
6% 9% 9%
58% 56% 51%
4% 8%
10%
22% 23% 18%
22% 24%
23%
17% 20%
27%
63% 61% 67%
17% 18% 22%
70% 66%
51%
20-49 50-69 70+ 20-49 50-69 70+ 20-49 50-69 70+
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
Most of them are just a
fad
I look out for these types
of products as I think they
could be beneficial for me
These products are too
expensive to buy
regularly
…they are also least likely to agree that these products are too expensive to
buy regularly
28
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Despite the view these are a fad, food and pharma companies have put a lot of
energy and money behind this growing industry…
Digestion Cholesterol Protein
Shopping Habits
30
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Online
86% of over 55’s regularly shop online and over 1/3 of those aged 70 + use
online methods to find out information about food or other household
products.…
…more tablets are owned by the over 55’s than under.
31
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
When asked if you will use online shopping more going forward, the over 70’s are
currently unsure – but are clearly starting to think about whether they will need
to or not
22% 22%
34% 35%
46% 46% 6% 4%
4% 4%
5% 4%
52% 52%
49% 48%
35% 32%
21% 21% 14% 13% 13%
18%
20-39 40-49 50-59 60-69 70-79 80+
I will use online grocery shopping more than
I currently do
I will use online grocery shopping the same
amount as I currently do
I will use online grocery shopping less
than I currently do
Don’t know
Age group
32
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Whilst Online needs to be carefully considered, the ‘social experience’ of
shopping is also key
11%
14%
18%
8%
10%
15%
0%
5%
10%
15%
20%
25%
20-49 50-69 70+
‘I enjoy the sociable aspect of going shopping’
‘I’ll often stop for a coffee when I’m doing my food shopping’
33
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
I welcome help and advice
9% 10%
22%
0%
5%
10%
15%
20%
25%
30%
20-49 50-69 70+
‘I prefer to shop at stores
where I can get help or advice’
Advertising
35
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Few of us consider ourselves to be ‘Old’
36
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Most advertising for ‘everyday’ products seems to be targeted towards mums
and families
Most advertising for ‘everyday’ products seems to be targeted towards
mums and families’
8% 9% 6%
6% 6% 5%
21% 23%
20%
65% 61% 69%
Total Men Women
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
37
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Most aged 60+ feel they don’t see people their age in advertising
I don’t see many people my age in adverts
10% 8% 8% 5% 6% 4%
55%
31% 23%
15% 15% 12%
26%
35%
39%
34% 32%
24%
9%
26% 30%
45% 47%
60%
20-39 40-49 50-59 60-69 70-79 80+
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
38
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Most agree it would be refreshing to see older consumers in advertising to
promote ‘everyday’ products
It would be refreshing to see older consumers in advertising
to promote ‘everyday’ products
11% 4% 5% 4% 5% 8%
11%
5% 6% 5% 5% 9%
29%
25% 24% 27% 22%
27%
48%
66% 65% 63% 67%
56%
20-39 40-49 50-59 60-69 70-79 80+
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
39
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Good old JR Hartley!
40
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
However, only a minority say they pay more attention to advertising with
people of their own age featured.
I take more notice of advertising that features people my own age
14% 8% 7% 7% 5% 6%
35%
30% 36% 34%
29% 32%
29%
36%
40% 40%
39% 35%
22% 26%
17% 19% 27% 27%
20-39 40-49 50-59 60-69 70-79 80+
Neither (3)
Disagree (net 1+2)
Agree (net 4+5)
Not sure
6%
30%
37%
27%
Net 70+
People over 60 are aware of their age, but don’t want to be reminded of it
41
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
In summary
1. The demographics of the ageing consumer is a very exciting trend
2. Indeed they will be the fastest growing consumer population in the next
10 years “2/3rd retail sales growth expected from over 55’s next decade”
3. They are tech savvy
4. They have money to spend & don’t mind spending it!
5. They have time to shop and enjoy the experience
6. Very few consumer businesses have tailored their price, promotion
mechanic or packaging for the ageing consumer
7. Whilst they have a balanced diet they would consider products with
specific health claims if they are relevant, is there more these companies
need to do in all categories to market their products?
8. No-one sees themselves as ‘old’ – therefore advertising would seem to be
better focused on the product attributes and attitudes rather than
specifically targeting the aged consumer
42
The Ageing Consumer – 20 November 2014
© 2014 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Q&A ?
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firms affiliated with KPMG International Cooperative, a Swiss entity. All rights
reserved.
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