Simple Math: A demographer details Millennials' habits
Ken Gronbach’s presentation at the NCA's State of the Industry analyzes Millennials's love of technology and being social.
Did you hear this one? A demographer walks into a room. Bartender asks him, “Why the long and tired face. He responds, “I keep getting broken down by age and sex.”
OK. Comedic writing is not my forte. But I couldn’t help trying to come up with something witty to describe Ken Gronbach’s presentation at the National Confectioners Association (NCA)’s State of the Industry conference in Miami, Fla. last month.
After all, how often do you come across a demographer? And no, a demographer doesn’t create maps, as Gronbach explained. Cartographers do that. Rather, demographers count people.
As he rightly pointed out, “People are more important than money and stuff.” Indeed. Moreover, Gronbach points out that demographers put up some impressive numbers regarding predictions. “We’re 80 percent accurate compared to economists, who have a 20 percent accuracy.”
Now, as Gronbach’s website details, he wasn’t always a demographer. Rather, he started out in marketing; first working for Volkswagen of America and then eventually heading up his own agency doing $40 million. In 1996, when one of his clients, a Japanese motorcycle manufacturer quizzed him about declining sales — an 80 percent drop off — Gronbach set out to do some research.
He quickly discovered a simple but rather critical correlation; the client base had shrunk. Once the almighty male Baby Boomer generation had grown out of the 16-to-24 category — a narrow yet key motorcycle buying niche — the Generation Xers could not match their parents’ numbers.
“Generation X was 11 percent smaller; that’s 9 million less consumers,” he told the audience. That pretty well explained the drop-off in sales. It also explained several other events, such as the closing of hospitals and schools, the drop-off in toy sales and housing starts.
But there’s good news. Welcome Generation Y (those born between 1985 and 2004), otherwise known as Millennials. There’s 90 to 100 million of them (depending upon whose figures you use), easily surpassing my generation, that is the Baby Boomers, who topped 78 million.
According to the Pew Research Center, “The Millennial generation is forging a distinctive path into adulthood. Now ranging in age from 18 to 33, they are relatively unattached to organized politics and religion, linked by social media, burdened by debt, distrustful of people, in no rush to marry— and optimistic about the future.
I know that this doesn’t come as a surprise to you since many of you have children or employees who are Millennials.
In a Forbes Dec. 14, 2014 article written by Micah Solomon — which I believe still has relevance —Solomon pointed out that “Millennials are not only the largest generation in United States and world history, they’re on the cusp of commanding the largest wallet power as well. It’s estimated they’ll be spending $200 billion annually by 2017 and $10 trillion over their lifetimes as consumers, in the United States alone.”
He also offered some advice regarding their purchasing habits, outlining five key criteria.
- Millennials expect technology to simply work — so you’d better make sure that it does.
- Millennials are a social generation — and they socialize while consuming (and deciding to consume) your products and services. And guess who is the most surprising group they socialize with? Of course, it’s their parents.
- They collaborate and cooperate with each other and, when possible, with brands.
- They’re looking for adventure (and whatever comes their way).
- And finally, they’re passionate about values — including the values of companies they do business with.
So how does this affect the confectionery industry? I’m confident many of the multinationals have already developed a Millennial strategy, integrating social media, branding and corporate sustainability into a targeted campaign.
But what about midsized and Mom-and-Pop operations? I believe the same kind of approach can be applied, although on a much smaller and personable scale. Start with the neighborhood, the community and focus on developing connections. In addition, talk to your millennial offspring and/or colleagues. They are a font of knowledge and information. I know I do, and it always amazes me what my children and staffers reveal to me. I may not agree nor approve, but I’m always fascinated. And that’s the first step to ensuring their loyalty.