The KPMG/YouGov Consumer Insights Panel predicts that the over 60s market will be a fundamental driver of sales growth for global fast moving consumer goods (FMCG) companies over the next decade.
The over 60s market will be a fundamental driver of sales growth for global fast moving consumer goods (FMCG) companies over the next decade, predicts the KPMG/YouGov Consumer Insights Panel.
“By 2020, the 65 and over age group will outnumber the under-fives for the first time,*” said Liz Claydon, Head of Consumer Markets at KPMG. “This demographic shift is the biggest opportunity left untargeted by FMCGs and could help them kick start growth against a background of flat lining sales in Western Europe.”
Investors are increasingly attracted to the perceived stability of the spending power of the grey pound, and their appetite to buy goods. Over the last decade, consumer spending among over 50s has grown on average 4.4% a year – faster than any other age group. And, as well as spending more than anyone else, they also earn more than any other segment of the population.**
“The challenge for FMCGs is to demonstrate to investors how much they are investing in this market, the returns they are receiving and the potential sales growth from this group,” added Martin Deboo, Consumer Goods Analyst, Jefferies International Ltd.
In order to successfully sell to this age group, the KPMG/YouGov Consumer Insights Panel warns that FMCGs need to adapt their products and sales strategies. This could mean a decline in the amount of short term, high volume, discounting strategies, which do not appeal to the over 60s.
Joe Petyan, Executive Partner, JWT London said: “This generation is not as discount driven as younger shoppers. Older customers genuinely feel annoyed and unhappy at promotions and portion size. They value quality and the experience of the product. There is an opportunity for FMCG companies to premiumise their product and charge a higher price point. Multipacks and BOGOF offers represent the antithesis of this.”
Louise Vacher, Consulting Director at YouGov said: “A high proportion of this group are in a good financial position and are prepared to spend – and they are also more thoughtful shoppers, being less likely to be swayed by short term offers and discounts. And as a relatively brand loyal group, they are highly attractive to those brands and companies who can cater for them.”
Of the 1,261 consumers surveyed by KPMG and YouGov, over 70% of those aged 70+ were likely to have trouble opening packaging and have trouble reading labels. That said, nearly 50% of those aged 20 to 60 agreed.
Liz Claydon at KPMG said: “FMCGs shouldn’t position their products as age-friendly, but instead subtly test for and remove barriers to people being able to consume their products, such as difficult packaging.
“Nestle’s research and development team is already testing their products to identify these types of barriers preventing silver consumers from using their products. They have invested in a machine hand which mimics the effects of arthritis. The company is not marketing this investment to consumers, but is instead using the research to make changes to packaging which will benefit all shoppers and enable everyone to use their products.
“This sort of investment should translate in shareholder value – but doesn’t at the moment. We need to be a consumer focused industry.”
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Zoe Sheppard, PR Manager at KPMG
T: +44 (0)117 905 4337
KPMG Press Office: +44 (0)207 694 8773
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
*United Nations Department of Economic and Social Affairs.
**Office for National Statistics
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.