The over-55s - engaging an ageing population

Agenda The size of the over-55s market What do they look for in food and drink? Savvy shoppers, but brand loyal Expect transparency Perishability is an issue How do their health attitudes affect their food and drink choices? What are the implications of the Agelessness trend to the market? Conclusion

Over-55s - the size of the market

A huge volume opportunity Forecast population by age group, 2016 The number of over-55s will rise by 1.5 million to reach 19.3 million by 2016. They’ll account for 30% of the population of 64.8 million in 2016. Source: Office for National Statistics/GAD/Mintel

…and value Average household spend on food declines with age. Average weekly household expenditure on food and drink by age of reference person, 2009 Average household spend on food declines with age. Spend per person rises with age, to peak among the 65-74s. Source: ONS, Family Spending 2009/Mintel

The rise of the smaller household Household size profile of over-55 population, by age, 2010 Household size declines with age. Implications for budgets and food expectations. Base: adults aged 15+ Taken from the TGI survey of around 25,000 adults Source: GB TGI, Kantar Media UK Ltd Q1 2011 (Oct-Sep)/Mintel

Over-65s are confident in their finances How consumers describe their financial situation, by age, July 2011 Over-65s are generally weathering the downturn well. But even within this group, 31% are in ‘tight’ finances or worse. Base: 2,000 internet users aged 16+ Source: GMI/Mintel

What do they look for in food and drink?

Savvy shoppers 69% “I buy the product offering best value for money” 35% “Branded products usually offer better quality” Savvy shoppers Brands must prove they are worth spending on to make it to their shopping basket.

…but brand loyal Selected attitudes to brands, by age group, 2010 Base: adults aged 15+ Filtered by fieldwork period (October 2009-June 2010) Taken from the TGI survey of around 25,000 adults Source: GB TGI, Kantar Media UK Ltd Q4 2010 (Jul-Jun)/Mintel

Transparency is in high demand Important attributes in food and drink packaging , November 2010 Morrisons Fresh Ideas Thai Green Chicken Curry Base: 1,000 internet users aged 16+ Source: Toluna/Mintel

…as is preserving food better Important attributes in food and drink packaging , November 2010 Cadog Mature Aeddfed Welsh Cheddar Base: 1,000 internet users aged 16+ Source: Toluna/Mintel

More potential for “easy-to-open” 61% Share of over-55s who see “easy to open” as important 0.4% Share of “easy-to-open” among UK food & drink launches in 2010. Accessibility Makes the product in very real terms more accessible and relevant to the seniors

British and local credentials resonate Thinking about the food and drink you buy from a supermarket, how important are the following issues? Base: 1,500 internet users aged 16+ Source: Toluna/Mintel

The over-55s and health

Healthy lifestyles Attitudes to health by age, August 2011 Health-awareness rises with age. The over-55s are confident about how to stay healthy. Source: Toluna/Mintel Base: 1,500 internet users aged 16+

Healthy eating Attitudes to various health-related food issues The over-55s use food actively to manage their health. Minimising the negative impact and maximising the benefits. Source: GB TGI, Kantar Media UK Ltd Q1 2011 (Oct-Sep)/Mintel Base: adults aged 15+

Health concerns Key health concerns over-55s have tried to address Source: Toluna/Mintel Base: 1,500 internet users aged 16+

More accessible functional foods Rich Products Oatmeal Crunch Bread (US) Kraft Live Active Light Cheese Slices (Australia) Benecol Instant Blueberry Porridge (Finland)

Scepticism remains a key barrier 69% “Some of the claims are exaggerated, eg cereals are good for the heart.” 79% “Functional foods are overpriced.” Scepticism Need to combat the scepticism to unlock the demand.

Natural foods have strong appeal 63% “I avoid buying foods with additives as much as possible.” 78% “I trust the health-promoting benefits of natural foods, like fruit and vegetables, more than functional foods” Good fit benefits Strong potential for benefits building on natural qualities.

How does Agelessness affect the market?

Agelessness People don’t act their age. While they are physically getting older, they don’t like to be told that they’re old. Understanding what this age group looks for is key to focusing marketing on attributes which resonate, not age.

Retired for hire – need for energy Work longer Many over-65s will stay in the workforce because they want to, or have to. Play longer The older age groups are also staying increasingly active in their leisure time. Need for fuel Demand for attributes like vitality, energy and longevity in food and drink products targeting the seniors.

A new market for energy drinks? US-based 5-Hour Energy is targeting the seniors. Sales growth outperformed the energy shots sector (57% v. 41%) in 2010/11. Opportunities for energy-stimulating ingredients to be marketed to the older demographic in the UK. 5-Hour Energy

Conclusion The over-55s are a sizeable opportunity in both volume and value terms. They like to see themselves as savvy shoppers and expect transparency. Packaging can play a role in products becoming more relevant to them. Their interest in health is a key differentiator – but they are often sceptical of functional claims. The over-55s are ageless in their attitudes. Questions?

Head of UK Food, Drink & Foodservice Research Kiti Soininen Head of UK Food, Drink & Foodservice Research +44 (0)20 7606 4533 ksoininen@mintel.com