APRIL 2005 Times & Trends Executive Summary:
Echo Boom Young Adults: The Next Growth Wave
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 month’s Times & Trends outlines opportunities to capture share among the critical Echo Boomer segment as they move into adulthood and become primary shopping decision makers.
This free summary is also accessible via the GMA Web site at http://www.gmabrands.com/publications/gmairi.cfm
INTRODUCTION
Following in their Baby Boomer parents’ footsteps, the estimated 75
million-strong Echo Boom generation (now age 10-27) will fuel the next
growth wave for the CPG industry.
Much has been written about the phenomenal discretionary spending power
and purchase influence of the Echo tweens, teens and young adults still
living at home with their parents. However, few studies focus on the young
adult Echos who are out on their own – many with children of their own –
and have become the primary CPG decision maker.
This report provides a window into the shopping and purchase behavior of
Echo Boom adults (age 21-27) who are already heads of household to help
manufacturers and retailers prepare for and capitalize on the tremendous
growth opportunities and shifts in shopping patterns that will occur as
Echos come of age.
HEADLINES
Shopping Patterns
Echo Boomers Embrace Supercenters. Supercenters are capturing a
significantly greater share of Echo Boomer CPG spending than that of the
general population, as Echo Boomers embrace this channel’s value and
one-stop shopping benefits. This trend will accelerate the migration away
from traditional retailers including grocery and drug. Manufacturers in
high-spend Echo categories may need to modify distribution strategies to
align with Echo preferences. Traditional retailers should invest now to
build relationships with this critical segment.
Source: IRI
Consumer Network®, 52 weeks ending 12/26/04
*Across IRI Reviews Categories
Number of Store Visits Well Below Average as Echos Conserve on Shopping Trips. In part due to larger supercenter shopping trips, Echo Boomers are in stores far less often than the average shopper. Less frequent store visits mean fewer opportunities to influence purchases in-store through merchandising, less opportunity to sell impulse items, and potentially larger package sizes as Echo household size increases to ensure that supplies last in between trips. As more Echos flood the CPG marketplace, this will be a critical trend to watch.
Category Growth Opportunities
Baby Care Poised for Growth Spurt. Baby supply categories (diapers,
formula/electrolytes, baby food, baby accessories) are poised for strong
growth as Echos increasingly start families; representing 8% of total Echo
with kids’ CPG spending, these categories will be a major driver of
channel and store choice.
Echos with Kids Turn to Convenience Meals. Strong spending indices
among Echo Boomers with kids represent significant long-term growth
opportunity for many convenience meal categories, such as refrigerated
lunches and dry packaged dinners. These categories are likely to face
declining demand within the next five years, however, as more Baby Boomer
households become empty nests and the void is left unfilled by the much
smaller Generation X cohort that follows.
Over 40 Million New Legal Drinking Age Consumers to Enter the Market.
Over the next decade, over 40 million new legal drinking age Echo Boom
adults will enter the beer, wine, spirits market. While this massive
market expansion will benefit most beverage alcohol categories, beer
manufacturers have the most to gain, as Echo adults allocate a
significantly greater share of spending to beer categories than the
general population.
Echo Spending on Bigger-Ticket Private Label Items May Drive Up Share.
Echo Boomers with kids allocate a higher proportion of their total CPG
dollars to private label products than the average household with kids;
this is largely due to greater spending on bigger-ticket private label
items, such as baby care and milk. If this trend continues, total private
label dollar share may increase as Echos increasingly start families.
Source: IRI
Consumer Network®, 52 weeks ending 12/26/04
*Across IRI Reviews Categories
Health & Wellness
Echos Are Concerned About Weight But Enjoy Some Indulgence. While
two-thirds of Echo Boom adults are concerned about their weight, they are
less likely than the general population to follow a specific diet, and
they are considerably more likely to eat fast food frequently. As
hard-core diet messages will not resonate well with this segment, products
with weight management benefits should be positioned as part of a balanced
diet.
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Source: IRI's Times & Trends
Reports
Information Resources, Inc is a leading provider of UPC
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