AMERICAN demographics

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AMERICANdemographics
Extreme Demand Satisfying the New Consumer
John McManus
www.demographics.com
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AMERICANdemographics
www.demographics.com
January 1979, Issue 1
December 1999, Issue 252
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AMERICANdemographics
Spotting Trends Anticipating Peoples Evolving
Needs
Demography Generations HH Income Multiculturalism
Strategy
Psychography Attitudes Values Needs

• Behavior-ography
• Connections
• Purchases
• Commerce

Media-ography Information Entertainment Community
Life
Tactics
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AMERICANdemographics
THE PRE-2K CONSUMER LANDSCAPE

• Mass scale
• Fewer media inputs
• Fewer distribution channels
• Longer manufacturing cycles
• Less parity and commoditization
• More homogeneity in consumption
• J. Wanamaker Half my advertising

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AMERICANdemographics
Todays Empowered Consumer

• Self-Reliant -- 82 agree people have to count on
  their own skills and abilities to win in this
  world
• Confident -- 81 agree that in making decisions
  about the products and services they buy, they
  usually go with their gut, even if others
  disagree
• In Control -- It is important to feel in charge
  of each and every part of ones life 85 in 1999
  vs. 81 in 1993
• Smart -- 72 report being able to do things a
  little better than most 60 consider their IQ
  above average
• Demanding -- 68 will go to another store rather
  than settling for something that is not exactly
  what they want

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AMERICANdemographics
Todays Consumer Wants toLive Life to the
Fullest
Multiple Identities and Self-Complexity -- Modern
American consumer has embraced a new, spirited
self-complexity--an array of different identities
and a passionate pride in them all. The
Emotionally Moving Target -- Consumers identity
is dynamic, complex and constantly changing. They
produce constant emotional shifts that can only
be mapped and understood by spending time in the
consumers world. Coexistence and Competition --
While people today possess several identities,
they are still highly invested in each particular
one, and may feel that some aspects of their
selves are neglected. Identities dont always
compete for existence or dominance, but often
simply for opportunity and attention. The
Nourishing Brand -- Brands have a role to play in
nourishing and reflecting consumers
self-complexity, as well as reconciling some of
their competing identities.
Source PortiCo Research, Chicago
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AMERICANdemographics
Yankelovichs Eight Core Value Groups
Up Comers Young singles and couples without
children, positive, upwardly mobile,
style-conscious, gregarious and socially
conscious, extremely enthusiastic about
technology. For fun, they enjoy sports, hiking,
camping, shopping, spending time with friends and
attending cultural events. Young Materialists
Younger singles, no children, self-focused,
skeptical about institutions, believe money and
material success equal happiness. Enjoy shopping
as well as home-centered activities such as
cooking, gardening, reading and watching TV.
Stressed by Life Young single parents,
resource-constrained, ethnically diverse, urban,
stressed, with a high need for excitement and
novelty in their lives. Focused on family and
self, they enjoy spending time with family and
friends, as well as shopping. New
Traditionalists Upscale Boomer families,
involved in community, interested in creating the
"right values" for their children. Strong
believers in the positives of technology. They
enjoy home-centered activities, shopping,
financial planning, and family vacations.
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AMERICANdemographics
Yankelovichs Eight Core Value Groups
Family Limited Family-focused, hard workers who
are skeptical about institutions, Boomer parents.
They have little need for new technologies and do
not enjoy using computers. During their leisure
time, this group focuses on family and
home-centered activities, and hunting. Detached
Introverts Single Boomers without children,
whose lives are focused mainly on work. Receptive
to technology, they spend a lot of time on the
Internet. For fun, they enjoy gambling, reading,
listening to classical music, and drinking
alcoholic beverages. Renaissance Elders Mature,
financially secure, vitally connected to
community, upbeat about future and remain
interested in personal development. They enjoy
home-centered activities, such as home
decorating, gardening, cooking and
antiquing. Retired from Life Mature individuals
who use the past as their point of reference,
sedentary and resource-constrained, they view
themselves as old-fashioned and neighborly. They
occupy their time with yard and garden work,
hobbies and keeping up with the news.
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THE CATCH THERES NO SUCH THING AS CUSTOMERS
AMERICANdemographics

• We are not seats or eyeballs or end users or
  consumers. We are human beings and our reach
  extends beyond your grasp deal with it.

The Cluetrain Manifesto www.cluetrain.com
www.demographics.com
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A FAST, DYNAMIC EVOLUTION
AMERICANdemographics
Technology

• POWER Is in the machine
• USE Limited to in-the-box
• GROWTH Comes from new inventions
• MARKET Business

• Is in connections, access
• Is out-of-the-box
• Comes from new combinations
• Anyone who needs to be connected

Source RoperStarch Worldwide
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AMERICANdemographics
Factors Furthering Internet Growth

• Reduction of the Digital Divide
• Free Internet Access business models
• Free PC Business models
• Growth of Internet Appliances
• Companies giving computers and Internet access to
  employees
• More Machine to Machine Communication
• Continued Innovation in High Speed /Wireless
  Access
• Cable Modems, DSL, Broadcast Internet

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AMERICANdemographics
KEY MARKETSPACE DRIVERS
Household composition changes Ethnic population
growth Age trends, mature vs. youth Channel
proliferation Lifestyle Diversity Moores Law
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AMERICANdemographics
THE FUTURE HOUSEHOLDS
Increase from 102 million to 112 million by
2008... The moneys in the middle spending
priorities shift toward needs of 45 to 64-year
olds as huge baby-boom generation moves through
middle age The emptier nest married couples
without children will account for most of the
growth in households in the next decade again,
the baby boom...
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AMERICANdemographics
THE FUTURE HOUSEHOLDS
The number of married couples with children will
not increase at all, and below-average growth
expected for single-parent families... Come-and-go
families Above average growth is expected among
households that contain unrelated people living
together as domestic partners or roommates...
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NUCLEAR FAMILY MELTDOWNTHE MEANING OF HOME
CHANGES
AMERICANdemographics

• 1998 2008 Change
• All households
• Married no children
• Married with children
• Non-family households
• Living alone, Total
• Living with non-relatives

102,022 112,433 10,411 10.2 28,977 34,335 5,45
8 18.8 25,166 25,155 -11 0.0 31,084 34,569 3,4
85 11.2 25,691 28,780 3,089 12.0 5,393 5,789 3
96 7.3
Source TGE Demographics
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A COMEBACK FOR THE FAMILY
AMERICANdemographics
While Many Continue to Worry, There Are Signs of
Encouragement
Roper Reports Worldwide Global Consumers 2000
Study
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MARKETING IMPLICATIONS
AMERICANdemographics
Relationships

• KINNECTEDNESS Help the consumer building
  kinship in connections
• LEGACIES From personal/financial to community
  (parks, libraries, schools) to social
• LOCAL HEROES Connect cause marketing to
  community concerns (esp. schools)
• POWER IS IN THE RELATIONSHIP Not the individual

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EVOLUTION OF BRANDS
AMERICANdemographics
www.demographics.com
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AMERICANdemographics
Feel entitled to premium brands
Expect products to be made to their specifications
Be armed with information
Consumers will ...
Have higher expectations
Shop on-line
Have less time and will want simplification
Have many more buying choices
Be even more demanding
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People Pattern Based Predictions
AMERICANdemographics
Still singing about soy Soy-based drinks are in
the dairy case and on the grocery shelves. Next
year will see the testing of carbonated soy-based
soft drinks. Also, the ingredient Nutri-Soy will
appear in some well-known foods. It's not just
for smoking anymore Soy was the supreme bean this
year touting all kinds of health benefits. But
what will be next? The new son of soy? Hemp. No,
not the kind of hemp that gets you in trouble
with the cops but the kind that contains high
protein, essential fatty acids like omega 3 and
6, and amino acids. The challenge, as it was with
soy, is being able to take a terrific ingredient
and make a delicious food.
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People Pattern Based Predictions
AMERICANdemographics
Hear me roar More women's nutritionally designed
foods Viactiv, General Mills' Harmony cereal,
and Quaker's Nutrition for Women oatmeal.
Especially possible--energy bars, soups, bottled
waters with calcium, folic acid, etc. Theres a
women's breakfast bar called Soy Vital. Heinz USA
introduced its new Great Awakenings soy milk with
a campaign aimed exclusively at
women. Inherently good products Amid
nutraceutical-backlash, more standard products
will promote health benefits. Cranberries'
tannins are touted as a urinary tract infection
fighter milk's calcium for stronger bones
orange juice's potassium for high blood pressure,
tomato products' lycopene for healthy prostate.
Chocolate and cocoa drinks have flavonoid
antioxidants that may decrease heart attack and
stroke risk. On the way, a chocolate aspirin?
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People Pattern Based Predictions
AMERICANdemographics
Service for one This year saw the emergence of
many new single-serve items--dips, salad
dressings, creamers, fruits, and spreads. Higher
margins will attract more companies into
single-serve foods such as microwaveable gravies,
cranberry sauce, flavored oils and vinegars,
popcorn toppings, and so on. The combination of
such items could even contribute to the adult
play with your food phenomenon. Boom, baby,
boom Companies may finally recognize the need for
ergonomic packaging--bottles and cans that are
easy to hold and open. The Heinz EZ Squirt
ketchup is a good example of this for children
but the aging Baby Boomers will create the real
demand for softer plastic to squeeze, larger
print to read, and shapes that are easier to
hold.
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People Pattern Based Predictions
AMERICANdemographics
How sweet it is! McNeil Specialty Products says
its new Splenda No Calorie Sweetener "measures
cup for cup like sugar...great for cooking and
baking." Can Splenda-sweetened cake, cookie and
dessert mixes from Betty Crocker and Duncan Hines
be far behind? Can Splenda-sweetened fresh,
refrigerated and frozen baked goods be a new
bonanza for the calorie-conscious? Flavor of the
year, 1 artichoke Surprisingly, this prickly
little vegetable is popping up in a variety of
uses--dips, spreads, appetizers, sauces, and
meals.
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People Pattern Based Predictions
AMERICANdemographics
Flavor of the year 2 Mediterranean Mediterranean
food! Look particularly for items with eggplant
or squash. Think ratatouille (yes, we know,
that's from Provence), and any variety of
products made with eggplant. Some ideas
ratatouille-type spreads for crackers or bread,
flavored cheeses, or gourmet versions of eggplant
parmigiana. Color me surprised Kids love color.
Witness Heinz' Green E-Z Squirt Ketchup, Dannon's
Sprinklin's Yogurt with rainbow sprinkles, and
Quaker Sea Adventures Instant Oatmeal, which
turns blue. Expect more kid-directed products to
burst out in a color explosion. And expect those
colors to be unusual-maybe lime green, acid
yellow, electric turquoise, or bright orange.
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People Pattern Based Predictions
AMERICANdemographics
Cuisine of the year Spanish For this cuisine,
think three major items paella, tapas, and
olives. With paella kits on the market, and with
the trend toward many small meals instead of
three squares, this type of cuisine seems ideally
suited to American tastes. And we won't scoff at
any cuisine that's best accompanied by sherry or
port. Olives, olives, olives Green, black,
cracked, pitted, stuffed, bottled, canned, and at
any price point. They are salty, flavorful, and
great nibbles with wine, beer, or mixed drinks.
Look for more varieties-and more upscale
varieties. Also look for more olives to show up
in food products, including appetizers, cheese,
entrees, and bakery products.
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People Pattern Based Predictions
AMERICANdemographics
Oh, grow up We predict that companies will find
new ways to temp the child in all of us. Tyson is
testing a Chicken To Go product that includes
chicken nuggets and a small tub of ketchup. Many
other countries indulge in foods you can combine
creatively and eat in a bite, Indian poori bread,
with chicken and curry comes deliciously to mind.
Or perhaps some African dishes which are
traditionally eaten without the aid of utensils.
Tofu TV dinners? Vegetarianism is a
fast-growing eating phenomenon. In 2001, one or
more major frozen food producers will introduce
vegetarian entrees and dinners. As larger
companies buy up smaller natural product
producers it seems like this will be easy enough.
Vegetarian versions of Skillet Sensations and
Sizzle and Stir that include a meatless protein
source will surely be on their way.
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People Pattern Based Predictions
AMERICANdemographics
Not the usual ground round Working in tandem with
the trends toward more indulgent foods, more
flavorful foods, and more specialty foods, look
for more specialty meat products. Not upscale
cuts of beef, but unusual protein sources. Look
for buffalo and emu (and its grounded cousin
ostrich) to make more inroads in the marketplace.
The selling point won't be the lower fat or
cholesterol, as it has been in the past, but the
unique flavor profiles. Milk across America The
past few years have seen many dairy-related
mergers. Yet the category still consists of
regional and local brands. Expect a national
milk, butter, and cream brand to emerge, either
through additional mergers or national company
partnerships. Also, look for more whey-based
foods and beverages.
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IS DEMOGRAPHY DESTINY?
AMERICANdemographics

• Numbers only tell part of the story and
  projections can prove terribly wrong. Even sure
  fire predictions, like population aging, are of
  limited use, since the meaning of aging is
  changing.
• Using demography to think about the future is a
  complex mix of analysis and creative
  interpretation. Focus on needs of people.

Source Global Business Network, Emeryville,
Calif.
www.demographics.com
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AMERICAN demographics
www.demographics.com
John McManus Associate Publisher American
Demographics john_mcmanus_at_intertec.com 203-358-418
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