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5/22/2008
'Echo Boomers’ Providing Major Growth Opportunities for CPG Manufacturers and Retailers According to
IRI Analyzes Echo Boomer Purchase Behavior and Pinpoints Changes in Shopping Patterns
CHICAGO - June 1, 2005 — As the majority of the 78 million Baby Boomers transition into new roles as “empty nesters,” the successive 75 million Echo Boomer generation (now age 10-27) is poised to become the consumer packaged goods (CPG) industry’s next great growth wave according to research from Information Resources, Inc. (IRI), the leading global provider of enterprise market information solutions for the CPG, Retail, and Healthcare industries.
To fully tap into this group’s significant discretionary spending power, today’s marketers must target the young adult Echo Boomers (age 21-27) who already head households and have become the primary CPG purchase decision makers.
The findings are part of IRI’s recent Times & Trends report, “Echo Boom Young Adults — The Next Growth Wave” which provides a glimpse into the shopping and purchase behaviors of the increasingly powerful Echo Boomer consumer segment. The study helps 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.
“The impact of the Baby Boomer generation has literally transformed the industry, and now their followers — the Echo Boomers — are going to have a similar effect. Manufacturers need to take note of this phenomenon today, and begin investing in marketing and product development initiatives that resonate well with this segment’s lifestage and lifestyle,” explains Janet Eden-Harris, IRI’s Global Chief Marketing Officer. “Manufacturers and retailers need to carefully track purchase behavior for their brands, categories, and stores across Echo Boomer segments to effectively anticipate and capitalize on the tremendous sales opportunities ahead.”
Shopping Behaviors
With its emphasis on value, the supercenter channel presently captures a significantly greater share of Echo Boomer CPG spending than that of the general population: 22.9% dollar share among Echos with kids vs. 13.9% for total households with kids, and 17.2% dollar share among Echos without kids vs. 11% for total households without kids. Additionally, the supercenters’ one-stop shopping approach ensures that Echo Boomers are taking far less shopping trips.
Consequently, the traditional grocery and drugstore outlets must invest now to build relationships with Echo Boomer consumers. IRI’s report encourages these retailers to concentrate their marketing initiatives on high-spend Echo categories, particularly those in which supercenters currently have a below-average share (i.e. beer, child-oriented beverages, and frozen food categories). On the flip side, manufacturers should evaluate their current and future distribution strategies to ensure alignment with Echo shopping patterns, and both manufacturers and retailers should jointly explore opportunities to enhance the effectiveness of in-store marketing and merchandising to attract and retain this critical segment.
Market Opportunities
The report also exposes several intriguing category trends within this demographic segment. The categories that focus on family living are best positioned for the greatest growth within the Echo Boomer demographic. Baby supply categories (diapers, formula/electrolytes, baby food, baby accessories, etc.) will be a major channel/store choice driver as more and more Echos start families.
In addition, 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. As a result, retailers should strongly consider baby supplies as a potential differentiator to attract the Echo with kids market, while baby supply manufacturers should consider partnering with key retail accounts in the development of programs to attract young parents.
The report also reveals that the Echo Boomers with kids segment also allocates a higher proportion of their total CPG dollars to private label products than the average household with kids. Knowing this, IRI recommends that retailers explore the opportunity to increase private label penetration and share across bigger-ticket, high-spend Echo categories, while working with manufacturers to determine the optimal category mix of private label and branded products.
The report also reveals that the beer, wine, and spirits marketplace will be greatly impacted by this demographic, as over 40 million new legal drinking age Echo Boom adults will enter this arena over the next 10 years. This massive market expansion will greatly impact the beer category, providing traditional retailers with the most leverage to attract and grow spending among legal drinking age Echo Boom adults who already allocate a significantly greater share of spending to beer categories than the general population.
Health and Wellness
According to the study, the majority of Echo Boom adults, though mindful of their weight, are still less likely than the general population to follow a specific diet and, contrarily, are more likely to visit fast-food chains. Also, this segment appears to be far less concerned about chronic disease, such as high cholesterol, heart problems, etc., than consumers in older age brackets, and is therefore less likely to seek out products with specific health benefits.
IRI recommends that manufacturers strive to provide consumers with products that offer weight management benefits within the context of a balanced diet, thereby allowing room for indulgence. Furthermore, because the vast majority of Echo Boom adults currently purchase natural/organic food and beverages, the report highlights the potential these products possess in providing retailers with an opportunity for differentiation. Manufacturers of such products have major upside potential if they can eliminate inhibitors to repeat buying.
The complete Executive Summary of this report can be found on IRI’s News & Events section at: www.infores.com/
public/us/newsEvents/thoughtleadership/tt_april_05.pdf.
About the Report
Findings presented in Times & Trends: “Echo Boom Young Adults — The Next Growth Wave,” are based upon an extensive analysis of consumer data from IRI’s Consumer Network® Household Panel, MedProfiler™ IV Health & Wellness Survey and the IRI/SPINS Natural/Organic Tracking Service
About Information Resources, Inc.
Information Resources, Inc. (IRI) is the leading global provider of enterprise market information solutions for the CPG, Retail, and Healthcare industries. IRI is the first company to leverage the power of real-time market information, advanced analytic insights, and enterprise performance management technology to improve the profitability and operational effectiveness of the world’s leading CPG, retail and healthcare companies. The Company uniquely provides a total view of the market, enabling maximum business performance throughout the enterprise. IRI's solutions make the consumer-driven, real-time enterprise possible. More information is available at www.infores.com.
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