The Forgotten Market: A lucrative segment

The over 55s consume a third of soft drinks in Western Europe, however they are largely ignored by marketers. Lucy Ingham investigates how beverage manufacturers can effectively target this lucrative group.


Issue 7

Although we live in an apparently youth-focused world, the global population is getting older. By 2018, there will be more people alive aged over 65 than under five.

According to research by Canadean Custom Solutions, the over 55s consume 33.6% of soft drinks in France, 28.2% in Germany and 25.9% in the UK. But with the older generation representing a vital consumer group, beverage companies need to do far more to reach this market effectively.

Speaking at the 2013 Innovation in Non-Alcoholic Beverages conference, Canadean research manager Emma Herbert explained: "Older people have high purchasing power but are often ignored during product development".

The issue is twofold: companies not only need to recognise the value of this market, but appreciate the subtleties of appealing to this age group. In particular it is vital for marketers to treat over 55s as several groups instead of one homogenous sector.

Overcoming misconceptions : the over 55s

There is a perception that older people are very resistant to change and set in their ways, making them highly loyal to their favoured brands. However, this is a significant misconception. In 2012 36% of UK consumers aged over 55 shopped around for groceries, more than any other age group.

This is one of many misconceptions about the older market that companies need to be aware of. Perhaps the biggest reason for this is that the older generation is now made up - at least in part - by baby boomers. From the 60s onwards, this generation has repeatedly redefined what it means to be their age, so it is perhaps no surprise that the group is changing the 55+ sector too.
For beverage companies, the best approach is to forget the stereotypes and look at this age group afresh.

Segmenting the market : the senior consumer model

Perhaps the biggest misunderstanding of all is that older people should be marketed to as one group, an approach that fails to appreciate the variations in attitudes and lifestyles that persist amongst older people as much as any other age group.

A 2009 study by Liverpool John Moores University found that older people can actually be more effectively marketed to in five distinct groups. The study, entitled 'A multivariate segmentation model of senior consumers', was based on the responses of 650 consumers aged between 50 and 79. The five groups were identified as Solitary Skeptics, Bargain-Hunting Belongers, Positive Pioneers, Cautious Comfortables and Self-Assured Sociables.

Solitary Skeptics perhaps most closely resemble many elderly stereotypes, although the group only represents 5% of older people. Members of this sector are socially averse and very sceptical towards marketing and advertising, while being highly nostalgic and materialistic. They are also likely to be unhealthy and are very against purchasing products on credit.

By contrast, Bargain Hunting Belongers represent 38% of the market. Members of this group are typically older than some of the other groups - at around 70 - but they see themselves as a decade younger. As their name suggests, Bargain Hunting Belongers are keen on a bargain and are happy to be marketed to. Nostalgia is not that important to them, but they value strong friendships and a sense of belonging.

Self-Assured Sociables do not regard themselves as being 'old', feeling only 48 despite an average age of 49. Representing 6% of the sector, this group is very active with good self-esteem. However, marketers must be wary of how they target them: this group resents senior discounts and will not respond well to overt references to age.

The Positive Pioneers are perhaps the easiest to market to, with the most positive attitudes towards advertising and consumption and high product awareness. Representing 30% of the market, they have an average age of 56 and enjoy physical activity and holidays abroad. They are also keen to try new technologies and innovations. However, companies should be aware of how best to market to this group; Positive Pioneers listen to little radio, watch and read only average TV and newspapers but have high internet usage levels and read lots of magazines.

Finally, the Cautious Comfortables are the most affluent and healthiest group, with an average age of 58. Representing 21% of the market, members of this group are likely to be empty nesters who take a lot of holidays both domestically and abroad. This group is the least likely to try new things, and are less price conscious.

A healthy approach : targeting issues

One area of beverages that has tremendous potential within the older market is products that are designed to target specific health issues.

Non-communicable diseases (NCDs) such as diabetes, heart disease and cancer have risen in prevalence over the past few decades, making them a major concern for many. "There is a need for products that boost health and counteract the onset of NCDs," explained Herbert.

In particular, with consumers retiring later and increased concern about health and lifestyle, products that can be shown to address health concerns are likely to be very popular with the older market segments.

However, it is important to target the right health conditions. While older consumers will respond positively to products addressing osteoporosis, joint conditions, brain and heart health and immune response, they are not interested in 'vanity' health benefits, such as products that target nail or eye health.

Most importantly, health claims need to be verified and trustworthy for consumers to be interested. Older consumers are much more sceptical about health claims than younger buyers, so companies should consider the use of scientific data to make verifiable claims about their products.

Subtle marketing : age blurring

Perhaps the single worst thing a company can do when marketing to older people is to make them feel old, so while targeting age-specific concerns is important, this needs to be done with subtlety. "People don't see themselves as old, so don't remind them," explained Herbert. "Age-related conditions need to be addressed in a positive way that is fun and non-patronising."

She cited Heineken Ideas Brewery's 60+ Challenge, an initiative to develop a beer concept for the 60+ generation. The winner of the challenge, Fahrenheit +60, was a range of premium beers that are fermented above 60°C to provide a sweeter, fruitier taste and which contain additional iron. Runners up included a wine-inspired recipe and a neck-length twist bottle cap that can be easily opened by sufferers of arthritis.

Packaging design is a particular area where subtle additions can go a long way to appealing to the older market. Changes to designs to make products easier to open should be clearly signposted, but age should never be referenced. Herbert cited United Biscuits' easy-open packs as a good example of this in action.

Beverage companies should also be aware of the phenomenon of age blurring, where some groups act older while others act younger. As a result of this, manufacturers can pitch to different ages through segmentation by interest or activity.

Age anxiety is also setting in younger - with so much information about health risks consumers are worrying about their health earlier, and so products that are meant for the older market can be appealing to a wide range of people.

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