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A.T. Kearney October 2015 1

The Institute of Food, Medicine and Nutrition

David Donnan

October 2015

The Senior Consumer


We are facing an “Agequake”

THE “SUPER-AGING” OVERHANG

(Countries with >65 segments over 20%)

GERMANY

GREECE

ITALY

JAPAN

2014 BULGARIA

CROATIA

FINLAND

FRANCE

GERMANY

GREECE ITALY

JAPAN MALTA

NETHERLANDS

PORTUGAL

SLOVENIA

SWEDEN

2020

34 COUNTRIES

INCLUDING:

JAPAN (30.7) GERMANY (28.2)

ITALY (26.8) KOREA (23.4)

FRANCE (23.2) SWITZ (21.9)

UK (21.7) US (20.1)

2030


By 2025, the 100+ population will increase to 119k, up 65% from 2015,

making it the fastest growing age cohort


By 2017, the 50+ population is expected to spend close

to 50% of CPG dollars; however <5% of advertising is aimed towards the group


29% of households 55+ have no Defined Benefit

Plan or retirement savings (e.g. 401k, IRA)


The A.T. Kearney Global Maturing Consumer Study

1. Benelux, Denmark, France, Germany, Italy, Norway, Spain, U.K., Romania and Turkey

Source: Euromonitor, A.T. Kearney analysis

They have distinct characteristics

They buy different product categories and enjoy shopping more!

They shop often, in smaller stores and closer to home

They are more loyal and more demanding on quality

They watch for promotions… but do not find them adapted

Their priorities evolve as they age


More than 3,000 consumers from seven countries revealed common themes

When I buy shampoo, there is a big logo of the company and not much else on it.

You need glasses to see what the product actually is, and in the bathroom

you often don’t wear glasses.

-Gerhard, 68, Germany

I do think they need some seating as it is tiring to push a trolley round. Perhaps a coffee bar, too, not

necessarily to socialize but to relax and have a coffee before catching the bus back

-Enid, 77, England

I am not as tall as I used to be and I do feel it when I cannot reach a product on the shelf. I always wish someone would help me, but it is seldom the case”

- Denise, 82, France


Older shoppers think they are not adequately served by marketers, retailers, or manufacturers

Shopping is difficult due to the inability to navigate large shops with hard-to-reach products on shelves

Product packaging poses a challenge to opening while labels, prices and directions are hard to read


Mature Consumers buy different product categories

1. Average share of basket compositions in the following countries: Brazil, Bulgaria, China, Denmark, Finland, France, Germany, India, Indonesia, Japan, Mexico, Netherlands, Norway, Romania, Russia, South Africa, Spain, Sweden, Turkey, U.K., U.S.

Source: Euromonitor, A.T. Kearney analysis

Where Mature Consumers spend less of their income1

5 %

14 %

4 %

11 %

Clothing Transportation

60+ 60-

Where Mature Consumers spend more of their

income1

4 %

18 %

7 %

20 %

Healthcare Food and Beverages


Often they enjoy shopping more

1. Based on a U.K. study

Source: A.T. Kearney Global Maturing Consumer Study, University of Ulster: Age associated changes in older consumers retail behaviour

They shop more in the morning because :

Shopping is often on top of their daily priorities

Shopping is the occasion to go out, better do it in the morning when they are not tired yet 80+

73 %

70-79

68 %

60-69

51 %


And they prefer to shop in smaller stores

Source: A.T. Kearney Global Maturing Consumer Study

Preference for smaller stores

70-79

39 %

80+

25 %

60-69

19 %


They value proximity

1. Share of respondents ranking “proximity” as one of their two top criteria to decide where to shop

Source: A.T. Kearney Global Maturing Consumer Study

They walk rather than drive

0 %

20 %

40 %

60 %

80 %

80+ [75-79] [70-74] [65-69] [60-64]

Driving car Walking


Selling to the Mature Consumer

Affordability

Nutrition Assistance Programs

Drug Stores

Food and Nutrition Information

Food Shopping Location

Nutrition Resources

Nutrition while Eating Out

13

Source: AARP Foundation Food Insecurity Research


But, Governments will be under stress

Increased length of pension costs

Increased length of healthcare costs

Nutritional based disease management


Finding alternative models for outreach

Food to Consumer Food Preparation Food Sourcing

Ex: Leverage buying power to obtain cheaper prices

Ex: Ready-made baskets to reduce labor

cost

Ex: Food delivery that leverages the USPS

network

Emerging Innovations


A new model for food re-distribution

Market Driven Models

Partnerships with distributors to provide food at cost to disadvantaged populations

Consolidation of buying power leveraging high demand from the growing 50+

Mutually beneficial partnerships; examples include AmazonFresh and USPS, Peapod and Stop & Shop, etc.

Traditional

Retail donations from farmers, grocery stores and other retailers

Industry donations from distributors, wholesale and other sources

Community food drives

Food purchased using monetary donations from grants, corporations, foundations and individuals


The Institute of Food, Medicine and Nutrition

David Donnan

October 2015

The Senior Consumer


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