Consumers Aged 55+: THE NEW "MUST WIN" MARKET
EXECUTIVE SUMMARY
JUNE 2006

IRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This issue examines purchase behavior among consumers aged 55+ – a massive and rapidly growing segment.

This free summary is also accessible via the GMA Web site  at http://www.gmabrands.com/publications/gmairi.cfm

INTRODUCTION
One of the largest, most powerful consumer segments in history is re-evaluating where they shop and what they buy.

Two major events are driving changes in purchase and shopping behavior among consumers aged 55+: 1) over the next decade, roughly 31 million pre-seniors (now age 55-64) will turn 65 and 2) seniors (age 65+) gained access to prescription insurance through Medicare Part D on Jan. 1, 2006, and more than 33 million have enrolled.

CPG and healthcare manufacturers and retailers have a unique opportunity to protect and grow their business within this critical and rapidly growing segment as consumers aged 55+ progress through these transitions.

This report summarizes results from an extensive analysis of purchase behavior among consumers aged 55+ to assess current and likely future impact of these events.
KEY FINDINGS

The consumer segment aged 55+ is massive, powerful and growing. Representing one-third of the U.S. adult population and growing in number by 30 percent over the next decade, consumers aged 55+ represent one of the most powerful consumer segments in history.

Traditional channels are poised to gain as “pre-seniors” age. More than three million consumers per year, on average, will turn 65 over the next decade. These “pre-seniors” (currently age 55-64) are expected to shift CPG/healthcare spending from value to traditional channels as they age and changes in lifestyle and health take hold.
 

   

Numerous CPG/healthcare categories will receive a boost as pre-seniors age. As 55- 64- year-olds-cross into their senior life stage, demand will increase for products with the following benefits: disease management (e.g., arthritis, high cholesterol); dietary (e.g., low fat, high fiber); long shelf-life (e.g., dried and frozen foods); and enjoyment (e.g., wine and spirits). By contrast, automotive and pet care categories may see a decline in demand.

Medicare Part D implementation has resulted in dramatic changes in channel selection. Medicare Part D, which has provided much-needed prescription insurance to millions of seniors, has also heavily impacted where seniors shop. Grocers took a large hit in the share of senior prescriptions and healthcare purchases as seniors shifted spending to supercenters, drug stores and mail order.

Seniors have significantly increased spending potential through Medicare Part D. With an estimated $36 billion in incremental spending power since gaining new prescription coverage, seniors are evaluating how to spend their newfound funds; a broad range of categories from home healthcare kits to sports drinks appear to be benefiting.
 

 

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Source: IRI's Times & Trends Reports
Information Resources, Inc. (IRI) is the world’s leading provider of enterprise market information solutions and services to the consumer packaged goods (CPG), retail, and healthcare industries.