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American consumers are on the cusp of a changing outlook on the
world and their place in it, according to John Zogby, CEO of the
polling firm Zogby International. He has conducted extensive
research on the changing trends among American consumers and
says it has implications for the cattle industry.
Zogby says a common thread he sees
being important to all consumers in the future is a tendency
away from the big dream and a tendency toward affordable and
simple pleasures. “These are people who are in the process of
redefining their lives. These are people who place a special
emphasis on the simple pleasures like dining out once or twice a
week. And since 9-11, these are people who place a greater value
than at any other time in the past two decades on the family
meal.”
Zogby shared his findings this
fall at a joint meeting of the Texas Cattle Feeders Association
and the Texas and Southwestern Cattle Raisers Association. From
his research, Zogby sees four major American consumer groups
emerging.
The first group he defines as the
“new American spiritualists.” He says, “These people identify
the American dream in spiritual rather than material terms.”
He further explains that
“spiritualist” doesn’t mean a religious term, but rather, “They
are defining their spiritual lives more in terms of personal
fulfillment.” Material acquisition means less and less to this
group. Instead, they are defining success more in terms of
self-actualization, such as doing volunteer work after
retirement, and redefining their priorities more in terms of
fulfilling modest goals for themselves and their lives.
The second group Zogby identifies
are those he calls the new investor class, which not only
includes those who make six figures and beyond, but it also
includes those of modest means and modest salaries.
These people also have modest
goals. “Members of this new investor class say I’m not dreaming
of the second house, the exotic vacation, the big boat. Rather,
I want to be out of debt, I want to be able to put my kids
through school and I want to live my life in retirement as
comfortably as I’m living my life now.”
The third group is what he calls
frequent Wal-Mart shoppers. He defines them as people who live
within modest means and who want to have an enjoyable life. Like
the new investors, they are generally conservative in their
political leanings and have modest expectations and modest
goals.
The fourth group he calls the
working-for-less Americans. “Twenty-seven percent of American
adults today work at a job that pays less than a previous job
they had,” he says. “That has tremendous implications for
Americans in their outlook, tremendous implications for
Americans in how they spend, tremendous implications for how
Americans define their lives.”
All total, Zogby concludes that consumers are going through a
fundamental reorientation of the American character, “which is
moving away from our traditional definition as a people of
plenty and toward a new American consumer who is living in a
world of limited resources.” He says that could bode for limited
consumer spending on beef and other luxury food items, such as
dining out, in the future.
Get Ready For Baby Boomers
Likewise, “Supermarket Guru” Phil Lempert says the aging
population in America is a critical trend that will shape
consumer spending and attitudes. Topping the list, he says is
the fact that the first Baby Boomers turn 65 in 2010. What does
“boomer retirement” mean for consumers?
Lempert says as boomers move into
this next phase of life, with a reduced reliance on Social
Security and dwindling returns on their investments and housing,
a new active semi-retired population, 78 million strong, is
about to change the dynamics of the way American businesses
operate. He says industries and companies need to be paying
attention to this consumer group now to get them to spend within
their industry – by 2010 it’ll be too late.
Financial security will be a huge issue as this milestone
approaches. Lempert says many boomers, who in just three short
years will reach retirement age, have little choice but to
continue working. Those who predicted windfall inheritances from
boomer parents never took into account their longer lifespan,
more active lifestyle and financial needs.
As a result, Lempert predicts many will seek a part-time (or for
some, full-time) career, but not as a minimum wage “keep me
busy” type of job like a greeter, but rather a management
position that offers benefits including health care. This will
have implications on boomers spending habits because they may
have less income available for “enjoyment” items such as
high-dollar beef cuts or expensive restaurants.
Decision Drivers
Among the other drivers that will prompt consumers to buy
specific food items or brands will be technology, according to
Lempert. He says technologies are creating a new more
information-enabled consumer, one that is the “commander” of
their shopping experience. With a touch of a button, shoppers
can compare features and prices along with accessing the latest
research and consumer blogs and then instantaneously purchase
the product. As a result, the way we buy everything, from
automobiles to insurance to our foods and investments will
change, Lempert predicts.
How will businesses compete in
this new environment? Shoppers who focus solely on brand name
and price will thwart their efforts to build a relationship and
a compelling retail environment. Instead, Lempert says, “The new
equation for ‘value’ must include the ever-changing combination
of four elements: price, quality, service and relationship…all
four must be present to succeed.”
Additionally, Lempert says
wellness issues will have a dramatic effect on consumer choices
and spending. With a population across all ages and races that
continues to increase its waistline, its cancer rates, its
incidence of heart disease and diabetes – wellness is becoming
America’s number one impending crisis.
Among baby boomers health issues
are forcing individuals to change their lifestyles – the way
they eat, exercise and work. And as they seek out these
solutions, Lempert says opportunities will abound for those
products, brands, retailers, restaurants, vacations and everyday
fitness experiences that meet their needs.
Along with their own wellness,
future consumers are concerned for their environment. Lempert
points out that consumers are buying organic foods, hybrid cars,
and even cleaning fluids that are environmentally safe.
Retailers like Wal-mart and Target are promoting organics, while
energy-efficient stores are being built that utilize windmills
for power. Businesses will have to become green or they will
start to wilt, Lempert predicts.
Lastly, Lempert says advertising to the masses is over. He says
more age diversity, more ethnic diversity, more economic
diversity and more media choices are spreading marketing and
advertising dollars too thin to be effective in communicating to
the changing consumers. He expects the Internet, podcasts and
blogs will continue to evolve in popularity and need to be
factored into marketing efforts for future success of companies.
Selling Health
Experts say health will continue to be a big driver in
positioning foods among consumers in the future. Here are two
trends that are already emerging:
Healthier Fare For Kids. Among
the future generation of kid consumers, expect healthier food
options from corporate giants like McDonald’s, Wendy’s and Walt
Disney. Many fast-food restaurants are already offering oranges
or apple slices in their kid’s meals instead of fries. And
recently Disney Co. said it plans to lend its characters’ names
mainly to healthful foods.
As an example, in its Disney theme parks, it will replace fries
and sodas in kid’s meals with vegetables and juice. In its
licensing deals, by 2009 Disney will limit portion sizes and in
most cases refuse to tie its brand to foods that get more than
30% of their calories from fat, more than 10% from saturated fat
or more than 10% from added sugar.
The Disney decision follows
reports by scientific panels that blasted the use of cartoon
characters to sell children food with low nutritional value.
A Beefed Up Image. In an effort
to maintain and grow beef market share – especially in competing
with chicken – look for beef to tout its healthy image as well.
The new campaign is based on recent research that shows
consumers prefer beef, but say they are eating more chicken due
to health concerns.
The National Cattlemen’s Beef
Association reports that in a survey of more than 4,000
consumers nationwide, 39% said they either strongly prefer or
somewhat prefer beef, while 27% said the same of chicken.
However, more than 40% said they are eating more chicken due to
health concerns.
To put a stop to this “chicken
creep,” NCBA and the beef checkoff are launching a beef
enhancement program that takes beef’s core values with consumers
to the next level. The research confirmed that the pleasure of
eating beef is the key driver in beef consumption, but it showed
another consumer driver is gaining importance — consumers’
desire to fuel their body with food that gives them energy and
is a good source of protein.
Thus, a portion of 2007 checkoff-funds
will be aimed at a campaign helping consumers turn their love of
beef into something they feel good about eating, too. In
addition to advertising, this image-building effort will involve
retail, foodservice, public relations and new product
development in showing consumers how beef can be a vital part of
their lives – while ultimately building consumer demand for
beef. |
