GENERATION IMPACT

Demographics tell us that a decade from now, there will be some 77 million American consumers between the ages of 50 and 70 (the baby boomers), and another 68 million between 20 and 35 (known variously as echo boomers, generation Y or millennials).Serving these two largest groups of consumers will require supermarkets to adjust their design and product selection, and to elect not only to serve one

Demographics tell us that a decade from now, there will be some 77 million American consumers between the ages of 50 and 70 (the baby boomers), and another 68 million between 20 and 35 (known variously as echo boomers, generation Y or millennials).

Serving these two largest groups of consumers will require supermarkets to adjust their design and product selection, and to elect not only to serve one group over the other, but to choose among specific economic or ethnic divisions within that group, according to trend forecasters and experts who spoke to SN. Asked to imagine food retailing in the year 2016, all pointed to an overarching health and wellness trend cutting across all demographics presenting challenges -- and great opportunities -- for supermarkets in the years ahead.

Boomers: Focus on Health

Roughly defined as those born between 1946 and 1964, the baby-boom generation is known for having defined itself in contrast to its parents. As that group marches into senior citizenry, observers expect more of the same.

"Baby boomers do not see themselves as we saw their parents," Richard Kochensperger, a professor of food marketing at St. Joseph's University, Philadelphia, told SN. "To them, 60 doesn't mean the end of the world but the beginning of something new. That's dramatically different than we saw 60-year-olds just 10 years ago."

Baby boomers will be more physically active than their parents and will respond to retail formats that can keep them that way, sources predicted. To that end, pharmacies will have larger roles and account for larger shares of overall store sales. In addition, foods offering health properties -- real or imagined -- will continue to grow.

"I think the whole idea of functional foods will become real," said Maddy Dychtwald, senior vice president and co-founder of AgeWave, San Francisco, and author of "Cycles: How We Will Live, Work and Buy." "These are foods that provide benefits beyond basic nutrition, having therapeutic or preventative value, like omega-3-laden eggs and calcium-enhanced orange juice. I think this will be happening on a much bigger scale in the future."

As boomers shop for foods intended to improve their health and longevity, the stores of the future need to adjust their designs to accommodate them, sources said. This means making product labels -- and ingredients -- easier to read, as well as design touches with older people in mind.

"This is a generation that doesn't want to feel old -- they want quality of life to continue indefinitely," said Mona Doyle, president, Consumer Network Inc., Philadelphia. "To the extent that you trip them up and remind them they're not 40 anymore, they won't be satisfied. I think supermarkets have lost share by not making this easy."

Doyle suggested, for example, less small print on shelf edges and product labels, more seating areas and lower shelving. She added that a study she had performed revealed seniors often sat on the edges of meat cases to take a break while shopping. "More sit-down places is a must-have," she said.

Evidence of a growing emphasis on health and wellness in coming years goes beyond exercise and diet trends, but will reflect changes in how Americans receive and pay for health care, observers said. As costs rise, a greater percentage of health costs is passed along to individuals, which should spark demand for healthy eating.

"We're all going to go to health care savings accounts because there's no other way around the costs. The government knows this, employers know this -- this is the reality we're being dumped into," Dychtwald said. "Because of that, we're going to have to educate the public as to how to make better choices and that will reflect itself in the supermarket. I think supermarkets have a great opportunity to help in that education."

Kochensperger noted evidence of these changes is beginning to arrive: Byerly's color-coding certain items on shelves reflecting nutrition content; health clubs attached to some Loblaw stores in Canada; and recent talk of Wal-Mart considering health clinics in stores. "I think getting connected with health care is going to become a major strategy for food retailers," he said. "I think we're just scratching the surface of the whole health and wellness trend."

Duty Now for the Future

When Ryan Sheckler, a 15-year-old skateboarder and X-Games champion, was asked recently if he's recognized at the grocery store, he reportedly replied: "Why would I go to the grocery store?"

If a sound bite can be food for thought, consider that at 15, Sheckler is firmly planted in the next demographic bulge -- roughly defined as those born between the years of 1980 and 1994, it's a group around three times the size of the generation before it, and not much smaller than the baby boomers that spawned them. Was Sheckler's remark indicative of a generation? Perhaps, the experts told SN.

"I'm afraid they've lost him already," Kochensperger said. "I've got kids that age and 'supermarket' isn't even in their vocabulary. They have no frame of reference for the supermarket being a food consumption point of choice."

Doyle agreed. "Teen-agers' perception is that there isn't anything for them to buy at the supermarket," she said. "Supermarkets are for family food, for large groups. There's no reason to go there otherwise."

Dychtwald disagreed to a point -- she noted that the millennial generation tends to take after its parents. "Chances are his father and mother don't go to the supermarket all that often either," she said.

If supermarkets of 2016 want business from this group, they'll have to change, embracing technology and providing food -- and an atmosphere -- that's fast, healthy and convenient, she added.

"This is a generation that is going to have very busy lives and won't see supermarkets as something that's fun, unless they're engaged," Dychtwald said. "They prefer to communicate by Internet messenger than by phone. They can make snap judgments as to whether something's cool or not based on superficial information, so first impressions will be more important than ever."

Kochensperger said young people today tend to eat food on-the-go in many forms, and will look to that as adults. Supermarkets have an opportunity to meet that need, but it won't be easy, he said.

"You have to create interest for quick, prepared foods that are respectable," he said. "But a lot of retailers have backed off on that because having a $60,000-a-year chef to flip pizzas doesn't cut it."

Young consumers will demand technology to make shopping easier and faster, sources added. "[Generation Y consumers] are not used to waiting in line in order to talk to someone," said Doyle.

Food Lion's Bloom concept has recognized the degree of importance shoppers have placed on convenience, said Nick McCoy, senior consultant for the Columbus, Ohio-based consultant Retail Forward. He predicted food retailers will continue to develop distinct concepts.

"I see stores getting smaller and more focused on the needs of consumers in each specific market," McCoy told SN. "Food retailers will have to stand for something and offer a compelling reason to shop their store. They have to develop specialized formats targeting specific customers and do that better than anyone in the market."