Grey pound could be sexy if marketers would open eyes to 'Generation Silver'

01 June, 2007

Old is the new young. Or something like that. By virtue of a glacial but fundamental shift in demographics and wealth, th ose members of the UK population in the 50-plus age bracket are becoming the most important and desirable consumers a brand could have.

The basic numbers are pretty compelling. Generation Silver - fiftysomethings and up formerly known as Baby Boomers - now own in the region 75 per cent of the UK's wealth. Property forms a lot of this wealth, but there are contributions from generous early retirement schemes, final salary pensions and savings built up by 35 years of stock market gains.

There are some rich younger people too, but the general trend is for those under 40 to have a big mortgage (if they own a property at all) and not to have any chance of a final salary pension. More significantly, Generation Silver is growing in numbers - thanks to a combination of Baby Boom and longer lifespans - which will increase their proportion of the UK population from 35 per cent today to 40 per cent by 2020.

This has some very significant implications for the wine business. Over-50s tend to drink more wine than their younger counterparts, mainly by virtue of it being a regular part of their lives (not much chance of the old dears indulging in binge drinking, it seems). A quarter of over-50s drink wine most days, and two-thirds more than twice a week. Only 12 per cent of under-50s can manage a drink of wine on a near-daily basis.

The over-50s' wine-drinking moment is a sedate glass at the end of the day at home, very likely red wine, normally around a meal. The evidence suggests they don't like going out to expensive restaurants and bars - but they would probably go to a local pub or low-key restaurant once a week.

When drinking at home, their wine tends to come from the big supermarket chains or an internet/mail order retailer such as Laithwaites, and tends to be bought on a bulk purchase deal. It tends not to be sparkling wine - it would ­appear that this type of celebratory drink is a youthful folly.

I expect you can recogni se something already in this profile - either yourself or your parents, perhaps. You can also see why marketers have avoided marketing to th is age group in the past. Frankly, they just aren't "exciting" enough for twenty- and thirtysomething marketing execs. They prefer to market to people like themselves who have exciting social lives and go to glamorous bars and clubs.

There's also the issue that the fifty-somethings haven't historically warmed to the idea of being marketed to in a direct way: aside from Saga, there isn't a brand out there that dares to stand up and say "I'm for oldies" for fear of destroying its appeal to young and old alike.

However, given the impending demographic superiority (and health) that Generation Silver can boast, I'd like to challenge a couple of assumptions about wine marketing. First is the idea that the over-50s are stuck in some kind of wine-purchase rut. The Wine Intelligence research on this, some of which was presented at the London wine fair, suggests the opposite: members of Generation Silver have a wider portfolio of countries and varietal wines tha n their younger brethren and tend to be quite experimental and confident about purchasing. This is not to say they'll be prepared to buy any old tat: they have a strong value instinct and a very sophisticated approach to promotion evaluation.

Several of our interviewees for the study drew a clear distinction between "good promotions" that involved trustworthy brands offering sensible discounts, and "rubbish promotions" where the deal was too good to be true.

The second challenge I'd like to lay down is about whether we continue to pretend - both to ourselves as an industry and in our consumer communication - that our target consumer is a wealthy, witty 32-year-old urban professional.

The first step would be to acknowledge that, for certain brands, the best consumer target might be a 62-year-old retiree. The next step would be for us to stop pretending they are 30 years younger than they are and put together marketing and promotional mechanics with them specifically in mind.

This last point is perhaps a step too far today. But don't count it out. Generation Silver appear to be having a great time, and becoming increasingly proud of the fact that they are healthier, happier and can drink wine on a regular basis.

If we as an industry are looking to where our next 10-15 per cent of volume growth is going to come from in the UK, we had better start thinking of them as icons rather than distractions.




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