Potential in High-Growth and Under-Served Consumer Segments
No author cited
Information Resources, Inc., December 2006
Due to sheer size and projected growth, three consumer groups are emerging as critical segments for consumer packaged goods manufacturers and retailers: families with young children, Hispanics and lower-income consumers, the latest Times & Trends report, “Emerging Consumer Segments: Capturing Potential in High-Growth and Under-Served Markets” from Information Resources, Inc. (IRI), finds.
The report points to households with children under the age of 12 as one of the fastest growing U.S. population segments over the next decade as consumers within the enormous "Echo Boomer" generation grow their families. These households have demonstrated a preference for the broad product assortment and value that supercenters offer. The report also finds that households with young children generally make fewer but larger shopping trips than the average household, spending 24 percent more per trip versus the average household.
The report also examines the hot-button issue of childhood obesity, which it finds is impacting packaged goods like no trend before. IRI's report predicts that 50 percent of U.S. kids will be overweight by 2010. Yet, shoppers with young children are turning to better-for-you products within kid-driven categories, which are growing at more than 10 times the rate of mainstream products.
The study also considered the growth potential of tThe Hispanic population, which currently represents 14 percent of the total U.S. population and is expected to increase 29 percent by 2015. While population growth is strong, growth in Hispanic wealth is even more phenomenal. In terms of spending power, 2007 will mark the first year that Hispanics control more disposable income than any other U.S. minority group, according to the Selig Center for Economic Growth.
Trends from lower-income households were also notable in the report. Many U.S. households struggle to make ends meet, IRI notes, but to a large degree, the needs of these households are the same as those of wealthier households. And even though lower-income consumers may spend less, they do make more frequent shopping trips. These frequent trips are mostly to value channels, not grocery and traditional mass stores.
