Boomers Aren't Dead Yet

This article appeared in the Vancouver Sun, May 3, 2002, titled "Boomers aren't dead yet, author advises marketers".

by Bruce Constantineau

David Foot knows we're all going to die one day but please don't kill off the baby boom generation just yet, he pleads. "Everyone wants to age and kill off the boomers," the noted University of Toronto economics professor and bestselling author said in an interview. "That's 20 or 30 years away. There's a lot of other things for us to worry about between now and then."

Foot, who co-authored the bestselling Boom Bust & Echo books, speaks in Vancouver next week to a marketing industry conference sponsored by the B.C. chapter of the American Marketing Association.

He said most of the front end of the baby boom generation, born in 1947, won't need serious hospital care for another 20 years.

"Everyone talks about the incredible pressure on the health care system now but it has nothing to do with the boomers. It has everything to do with their parents who were born in the roaring 1920s."

He said marketers today must understand that the Boom Bust & Echo phenomenon – with demographics almost entirely dictated by an aging baby boom generation – applies to Canada and the U.S. but it doesn't work in countries like Mexico and Brazil.

A lot of the trends that you observe in the U.S. and Canada, like cocooning, don't apply to Mexico," Foot said. "It has nothing to do with cultural differences. They're just much younger than we are." He noted 60 per cent of the population of Mexico is under the age of 30, a situation that existed in Canada about 30 years ago.

“They’re a young market so they want things like cheap beer, not premium beer," Foot said. "When you're young, you're into volume at the best possible price and if you're a beer company operating in that market, you'd better understand that."

He said it's no accident that Molson recently paid $765 million US to buy the second-largest beer company in Brazil – Cervejarias Kaiser SA. It's Molson's second acquisition in Brazil in the past 18 months and gives the Canadian brewing giant an 18-per-cent share in the world's fastest-growing beer market.

Foot said marketers must also realize there are vital differences in demographic trends within an individual country. For example, there is a much bigger echo generation - children of baby boomers - in central Canada than on the east and west coasts of the country. Similarly, there are far more echo kids in the southwestern U.S. than there are in the northeast.

"So you have to be very careful about where you build and market mega movie complexes,” he said. "It's teenagers who go to movies and if you don't have many teenagers in your market, you could be in big trouble."

Foot said he's optimistic about the potential for selling new products to an aging North American baby boom market over the next five to 10 years.

"You have all those popular products for people in their 50s – things like laser eye surgery and gardening products and golf," he said. "The boomers won't be playing a lot of baseball or hockey but they won't be staying inside and vegging out."

Despite the healthy lifestyle, many boomers will continue to gain weight in the future.

The downside to that trend will be an increase in the incidence of diabetes. The upside is it will present another opportunity for savvy entrepreneurs.

"If you're in the food preparation business, many of your customers may well be sugar intolerant," Foot said. "If you know that, you can deliver a better, more popular product."

He said many popular products on the market today will face a tough time retaining their popularity over the next 10 years.

Life insurance companies will shift their emphasis from life insurance policies to financial planning products as the kids of baby boomers leave home and their parents become less attracted to basic life insurance.

A falling birth rate means there will be less demand for day care in the future, Foot said, and fewer kids means toy companies won't be ringing up the healthy annual sales they're used to.

"Mattel did a very good job by redefining Barbie as a collectable doll for 45-to-55-year-old women at $650 a pop," he said. "You don't have to sell too many of them because there's a nice, big profit margin built into that product.”

Summary

An aging baby boom generation dominates the consumer market in the U.S. and Canada:

  • Golf, laser eye surgery and gardening will remain among the most popular products for aging baby boomers. Growing numbers are collectors of memorabilia from their youth such as Barbie dolls.
  • Life insurance, day care and toys will become less popular.
  • What Foot calls the "echo" generation - the kids of baby boomers- has a far greater impact in central Canada than anywhere else in the country.

In countries farther south, such as Mexico, 60 per cent of the population is under the age of 30. This is reflected in marketing trends:

  • In younger markets consumers want things like cheap beer, not premium beer. (Molson recently bought the second largest beer company in Brazil, increasing its share in the world's fastest-growing beer market.)
  • The trends seen in the U.S. and Canada, such as cocooning, don't apply – simply because people are younger.