••• millennials research
New drinkers like to try new things
A look at younger Millennials as alcoholic beverage consumers
Millennials are a key demographic for the alcoholic beverage market, both because of how big the group is as well as how much it may purchase going forward. And as a result, the battle within the alcoholic beverage industry has begun to win over this group’s hearts, minds and wallets. Tastes within the group, however, vary when it comes to alcoholic beverage preference. For example, Millennials 21-34 represent about one-fourth of adults 21 and over, but they account for 35 percent of U.S. beer consumption and 32 percent of spirit consumption. Comparatively, they represent only 20 percent of wine consumption.
As a group, the Millennial generation includes consumers born between 1977 and 1995. As a result of the diverse age range, consumption habits and preferences vary. In looking at the age variations with the total generation, researcher Nielsen expects younger Millennials, particularly those who are newly of legal drinking age (LDA), to present more opportunity for bars, restaurants and other on-premise establishments. Dynamics will shift among older Millennials, particularly as they enter different life stages and establish families. Consequently, older Millennials will, in general, present more of an off-premise opportunity.
So how do marketers reach of-age Millennials in the age of “TV everywhere” and device proliferation? Nielsen’s Beverage Alcohol Media Report, which looked at the cross-platform media consumption habits of LDA Millennials, found that the average adult Millennial (21-to-34 years old) spends over 20 hours per week watching live TV.
While TV is still a very important media channel, advertisers now have additional ways of reaching their best consumers and face some tough budget allocation decisions in regard to their marketing mix. Consider this: adults 21-34 years old spend about 11 hours weekly tuning in to AM/FM radio and they spend about the same amount of time using an app/Web on a smartphone.
But being able to figure out the best device or platform to reach Millennials doesn’t explicitly activate this oft-fickle group to make purchases. After all, reaching potential imbibers with creative messages and actually having those messages resonate in a world of congestion are two different things entirely.
The Beverage Alcohol Media Report looked at the alcoholic beverage creatives that were the most successful in terms of brand memorability and found that the best ones employed a concept and storylines that were unique, had humor and brand cues early on and throughout the spot.
As shoppers, Millennials are different from older generations. While they prioritize value like their older counterparts, they are more likely to buy natural and organic products (38 percent more likely) and they are quicker to jump on new trends. For example, 42 percent say they bought gluten-free products last year, well above the 29 percent reported by Baby Boomers.
When it comes to retail shopping, Millennials are value-conscious and particular. They look for good deals, primarily online, and won’t think twice about downloading a store coupon from an app on their smartphone or tablet. While they’re deal seekers, Millennials won’t give up quality or taste when it comes to their alcoholic beverage purchases. And as a result, a large percentage say they will not spend their money on mass-market alcoholic beverages. That’s one factor that has led to the growing popularity of craft beverage alcohol products.
In a survey Nielsen conducted in August 2015, 34 percent of spirits drinkers said they equate a higher price with higher quality either all or most of the time. Among Millennials, however, the percent was 41 percent, while only 27 percent of Boomers associate price and quality. And a craft beverage alcohol survey in May 2015 found that consumers 21-34 desire craft beer that is associated with being handcrafted, artisanal and top quality.
Much like their desires to purchase organic and healthy, Millennials are interested in trying new things and experimenting, and this appetite factors into the alcoholic beverages they choose. Millennial gatekeepers – the primary shopper in a multi-generational household – for example, are 43 percent more likely than the entire Millennial generation to want to try new and different products. In aggregate, Millennials are fairly brand-promiscuous, especially when it comes to beer and wine, as a result of their adventurousness in general and the likelihood that until they try different brands, they don’t know yet what they’ll like or not like.
Because of their affection for technology, Millennials are generally more highly engaged in pre-store buzz than older generations. As a result, trial and pre-store promotions in the overall CPG space are critical to reach this group, whereas Gen X and Boomer consumers are more interested in browsing and investigating labels when they are in the store. So while there’s a great opportunity to influence in-store decisions among older consumers, retailers and manufacturers need to influence Millennial purchase decisions more so before they even get to the store.
Influencing Millennials before they make their shopping trips is even more important because they make fewer trips than their older counterparts. For example, the average Millennial makes 39 trips to the grocery store each year, compared with 48 among Gen X and 58 trips among Boomer consumers. That said, however, they make more out each trip by spending more per visit. Millennials spend an average of $54 per trip, $11 more than Boomers.
But what about alcoholic beverage shopping? Is it different? While this newest generation of full-fledged adults is very planning-oriented when it comes to overall shopping, Millennials plan less than Gen X and Boomer consumers when they shop for alcoholic beverages. This makes them more engaged within the store than when they shop for other categories. As alcoholic beverage shoppers, Millennials are prone to looking at product details, deals and promotions, providing a significant opportunity for retailer and manufacturer influence.
So for retailers and manufacturers looking to engage with Millennials, the bottom line should be about focusing on a few key value propositions: authenticity, originality and value.
The insights presented above were derived from the following sources:
Nielsen’s Beverage Alcohol Brand Purchase Set study was based on an English-language survey sent to 2,000 age 21+ adults that was conducted Feb. 12-17, 2015.
Nielsen’s Multi-Generational Households study included data from Nielsen Homescan Panel Generations Survey conducted between April-May 2014.
Nielsen’s QuickQuery craft beverage alcohol study was based on an English-language survey conducted by Harris Poll. The survey was conducted online May 15-19, 2015, among more than 2,000 U.S. adults 21+.
The Beverage Alcohol Report, Dec. 12, 2015.
Nielsen Beverage Alcohol Category Shopping Fundamentals Study, December 2014.
••• social research
Better weather tops list of reasons to move
Seeking a different type of greener grass?
A Harris Poll found Florida, California and Hawaii to be the states where Americans would most like to live (excluding where they live now), followed by Colorado and New York. But what might inspire Americans to actually consider such a move? While there are clear frontrunners, a lot of it depends on region, age, gender and more.
Just over half of Americans (52 percent) say they’d consider moving to another state to live in an area with a better climate or better weather. Four in 10 (41 percent) would consider moving for a job opportunity. Over a third (36 percent) would factor in proximity to family. One in four (25 percent) would consider a move for health reasons.
Between one in 10 and two in 10 would consider a move due to each of the following: proximity to friends (18 percent); proximity to significant other (16 percent); educational opportunity (14 percent); to live in an area where their lifestyle is more accepted (13 percent) or where their political views are more accepted (11 percent); to live in an area where recreational marijuana is legal (11 percent).
Seven percent (7 percent) would consider moving in order to live someplace where their religious views are more accepted. Meanwhile, 15 percent would not consider moving to another state for any reason.
As stated earlier, this list changes greatly depending on a range of factors. Climate consideration, for example, seems to be much more important among those in regions prone to less-welcoming weather. Over six in 10 Easterners (64 percent) and Midwesterners (61 percent) say they’d consider moving to another state in order to live in an area with a better climate or better weather. This drops just below the halfway point among Southerners (48 percent) and down to 39 percent among those in the West.
Looking across the generations, Matures are less likely than their younger counterparts to consider relocating their way into a better climate (54 percent Millennials, 51 percent Gen Xers, 55 percent Baby Boomers, 39 percent Matures). Similarly, Millennials are more likely than any of their elders to say they’d consider moving to live in an area where their lifestyle is more accepted (24 percent, 10 percent, 7 percent and 6 percent).
Likelihood to consider moving gets progressively lower as those answering the question get older for: job opportunity (68 percent Millennials, 52 percent Gen Xers, 20 percent Baby Boomers and 2 percent Matures); proximity to significant other (24 percent, 19 percent, 10 percent and 4 percent); to live in an area where recreational marijuana is legal (20 percent, 10 percent, 7 percent and 1 percent).
But it may not entirely be the individual factors which are appealing less to older Americans. Their roots have likely grown deeper as well, as evidenced by their higher likelihood to say they wouldn’t consider moving to another state for any reason (7 percent, 11 percent, 19 percent and 35 percent).
Comparing genders, women are more likely than men to say they’d factor in proximity to family (40 percent vs. 31 percent); men, meanwhile, are more likely to say they’d move to live in an area where recreational marijuana is legal (14 percent vs. 8 percent) or where their political views are more accepted (13 percent vs. 9 percent).
While motivations such as moving in order to live in areas more accepting of their lifestyle or political or religious views are not high on the list overall, these factors clearly resonate more with some Americans than with others. Most notably, LGBT Americans are three times as likely as their non-LGBT counterparts (34 percent vs. 11 percent) to say they’d move in order to live in an area where their lifestyle is more accepted.
Where a person stands on the political spectrum also coincides with attitudinal shifts: liberals (20 percent) are more likely than conservatives (13 percent) – who in turn are more likely than moderates (5 percent) – to say they’d consider moving to live someplace where their political views are more accepted; conservatives (12 percent) are more likely than either moderates (4 percent) or liberals (7 percent) to consider moving to an area where their religious views are more accepted; liberals (17 percent) and moderates (12 percent), on the other hand, are more likely than conservatives (6 percent) to say they’d consider moving to an area where recreational marijuana is legal.
This Harris Poll was conducted online, in English, within the United States between November 11 and 16, 2015 among 2,232 adults (aged 18 and over). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online. Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in our panel, no estimates of theoretical sampling error can be calculated.
••• behavioral research
Study looks at the changing face of change
Consumers say reinvention is hard but necessary
Change is constant, and in today’s hyper-paced society, possibly even expected according to a study conducted by Ipsos. North Americans are embracing change, looking for new opportunities, improvements and differentiation. In fact, over half (55 percent) of North Americans admit to having reinvented themselves and another 21 percent plan to reinvent themselves in the future. Millennials (85 percent) and females (77 percent) tend to be more open to the idea of reinvention when compared to older generations (79 percent, Generation X; 65 percent, Baby Boomers) and males (74 percent). “People are continually making changes in their lives,” says Steve Levy, chief operating officer with Ipsos in Canada. “The degree to which people change varies across age groups and genders. It’s particularly interesting to see that younger generations are much more open to reinvention than their older counterparts.”
The study reveals that there are many different angles to personal reinvention. In fact, 27 types of reinvention were grouped into eight categories. The categories (and percentage of consumers who have made a change in each area) are health and wellness (88 percent), life-stage changes (78 percent), attitude changes (73 percent), experience/involvement changes (71 percent), career changes (59 percent), personal/physical changes (57 percent), location changes (54 percent) and gender identity (24 percent). Clearly, reinvention is not confined to a certain stage of life; indeed, it covers the gamut of life experiences.
Despite the fact that many North Americans have, or will, reinvent themselves, it is not easy to achieve. In fact, more than two-thirds (68 percent) of North Americans reveal that reinvention is a tough thing to do and that some reinventions are more difficult to achieve than others. To understand this further Ipsos created a reinvention difficulty index. In this index, 100 represents average difficulty; an index score of 120 or above is deemed difficult, scores of 80-119 represent average difficulty and less than 80 are considered easy. This analysis shows that the toughest changes to make include: parting ways with someone, dealing with health issues concerning yourself or someone close to you, losing weight, getting into shape and making an attitude or general outlook change.
Still, even with this perceived difficulty, consumers truly believe in reinvention. When examining the extent to which people believe they should reinvent themselves, the vast majority (72 percent) think that individuals must continually reinvent to improve. “Even if consumers aren’t specifically admitting to reinvention, the results show that they are still making important changes in their lives,” says Levy. “This transfers over to their expectations of brands, too. Companies need to continually pay attention to how consumers reinvent themselves, and adapt their offering to stay relevant and deliver on these evolving needs and desires.”
••• segmentation research
Marketers misjudging the impact of their personalization efforts
Customers take a different view
A study by Germany-based customer engagement company hybris, conducted by Forrester Consulting, shows a gap between consumers’ expectations of personalized marketing and what marketers are delivering. The study shows that while 66 percent of marketers rate their personalization efforts as “very good” or “excellent,” only 31 percent of consumers say companies are consistently delivering personalized, cross-channel experiences.
Additionally, 37 percent of consumers say they delete most e-mail offers and promotions without reading them, while 40 percent have unsubscribed or opted out because they feel overwhelmed. Forty-four percent say they receive too many offers and promotions. Seventy percent of consumers surveyed said they are aware that companies use personal information to send them targeted offers and 74 percent are “somewhat” or “very comfortable” with companies using data about them to provide personalized experiences.
While 66 percent of marketers use demographics to create targeted content offers and 44 percent say they use demographic categories to create at least some level of personalization for unidentified prospective customers, only half are using more sophisticated methods, like leveraging data extracted from loyalty programs (52 percent) or behavior-based data (48 percent). Ninety-one percent of marketers surveyed are prioritizing customer experience through personalization over the next year.
••• health care research
A look back at health care 2015
Gallup editors rank important survey findings
As reported by Alyssa Davis, researcher Gallup published nearly 60 articles in 2015 about Americans’ health and well-being. Through its year-round daily surveys, the Gallup-Healthways Well-Being Index provides data and insights on Americans’ purpose, social, financial, community and physical well-being. The following list includes Gallup editors’ picks for the top 10 most important findings from 2015.
The uninsured rate among U.S. adults continues to fall. In the third quarter of 2015, data from Gallup and Healthways showed that 11.6 percent of U.S. adults were without health insurance, down significantly from 13.4 percent in the same quarter a year ago and 18.0 percent two years ago, just before the Affordable Care Act took effect. The uninsured rate continued to drop in 2015 in most states.
Actively disengaged employees are more likely to have health issues. Disengaged workers are more likely than their engaged peers to report experiencing physical pain, high blood pressure and depression. They also report having more days per month when health issues limited their activities: 2.17 unhealthy days for actively disengaged employees versus 1.25 for engaged employees. Gallup found that an actively disengaged worker aged 40 to 49 costs his or her employer 85 percent more in lost productivity because of unhealthy days than an engaged employee in the same age range.
Nearly two in 10 Americans say they take drugs to relax almost every day. West Virginians are most likely to report using drugs or medications (including prescription drugs) that alter their mood or help them relax. Southern states make up six of the top 10 highest drug use states. Those who use drugs that affect their mood almost every day have lower well-being than those who don’t.
Young adults’ cigarette use declined significantly over the past decade. The smoking rate for 18-to-29-year-olds, which used to be the highest among all age groups, is now equal to that of their older counterparts. But this steep decline from 34 percent from 2001-2005 to 22 percent from 2011-2015 may be linked to young adults taking up other forms of tobacco use, such as cigars, pipes and smokeless tobacco.
Heart attack survivors may not be making necessary lifestyle changes. Those who have had a heart attack are significantly more likely to smoke, to be obese and to experience stress than those who have never had a heart attack. And those who have survived a heart attack are much less likely to exercise regularly.
Young black males in the U.S. suffer a well-being deficit. Young black males as a group have higher unemployment, lower graduation rates, less access to health care and higher incarceration rates than other groups in the U.S. And in 2014 and 2015, the deaths of several young black men during incidents with police became headline news. Gallup and Healthways found that on average, black men aged 18 to 34 have lower well-being than white, Asian and Hispanic men in the same age range. Young black males also have more negative outlooks on their lives than do young males who aren’t black.
The U.S. obesity rate continues to inch up. The obesity rate among U.S. adults in 2014 hit 27.7 percent, up more than two percentage points from 2008 and the highest rate recorded in seven years of tracking. More Americans who were previously overweight moved into the obese category. Americans aged 65 and older have experienced the sharpest rise in obesity since 2008.
Getting more sleep is associated with higher well-being. Getting more hours of sleep is linked to having higher overall well-being, with the relationship peaking at eight hours and leveling off thereafter. Those who usually sleep seven hours per night have a 4.8-point advantage in their Well-Being Index score over those who typically sleep for six hours. But more than four in 10 adults report getting less than seven hours of sleep per night.
Well-being and employee engagement have additive benefits. Employees who are engaged at work and have high well-being consistently outperform their peers who are engaged but have low well-being across a variety of business and health outcomes.
Heart attacks and depression are closely linked. Americans who have had a heart attack are twice as likely as those who have not to say they are currently being treated for depression, 16.5 percent vs. 8.1 percent, respectively, after controlling for key demographics.
••• food research
Price matters when pushing consumption of healthier food
Study based on six years of supermarket sales data
Small price differences at the point of purchase can be highly effective in shifting consumer demand from high-calorie to healthier low-calorie alternatives, according to a study in the Articles in Advance section of Marketing Science, a journal of the Institute for Operations Research and the Management Sciences.
Low-income consumers, who disproportionately suffer the consequences of obesity, are particularly responsive to such small price differences across products. Such differences are important because they mimic a “fat tax.”
The results are based on a large-scale field study analyzing six years of sales data from over 1,700 super-markets across the U.S. The paper, “Will a fat tax work?” is by Professors Romana Khan at Northwestern University, Kanishka Misra at University of Michigan and Vishal Singh at the New York University Stern School of Business.
The research focuses on a peculiar pricing pattern of milk in the U.S., where relative prices for milk across fat content – whole, 2 percent, 1 percent and skim – vary depending on where you live and which store you happen to patronize. At some stores, prices are equal across all fat content; at others, prices decrease with fat content, with whole milk the most expensive and skim the cheapest option.
“The question that comes to mind is whether these different price structures have an impact on people’s choices. To put it simply, do people switch to lower fat milk for a price difference as small as 15 cents per gallon?” says Romana Khan, co-author on the study. “The answer to this question is of interest because it relates to the hotly-debated issue of whether a ‘fat’ or ‘sugar’ tax can be an effective mechanism to curb obesity.”
The study finds that in markets where milk prices are equal across fat alternatives, people tend to choose whole milk over lower-calorie alternatives, particularly in low-income zip codes: at equal prices across fat content, the market share of whole milk is 52 percent in lower-income areas compared to 25 percent in higher-income areas. What happens in markets where whole milk is priced at a premium? Although the average price difference for a gallon of milk is just 14 cents (5 percent), it causes a significant shift in market share away from whole milk to lower-fat options. This shift to the lower calorie options is significantly more pronounced in low-income neighborhoods.
Besides income, the analysis accounts for other factors such as age profile, racial mix, and educational attainment of the local customer base.
A critical factor in the analysis is that the prevailing price structure –whether prices across fat content are the same or not – is determined by the chain’s policy at the regional level and does not vary with local demographics or competition.
“This provides us with a quasi-experimental setup to analyze how small price differences impact people’s choices,” says Kanishka Misra. “Studies addressing similar questions are often conducted with small, non-representative populations, often university students. What distinguishes our work is the real-world field setting covering sales across the U.S. and observed over a long time period – mimicking what a potential ‘fat tax’ would look like and what the long-term consumer choices would be.”
“Our results have significant implications for health experts and policy makers, since interventions in the form of taxes on high calories foods are highly contentious,” says Vishal Singh. “The general perception is that these taxes need to be substantial, at least 20 percent and often as high as 50 percent, to have a meaningful impact. This would be highly regressive since low-income consumers spend a greater proportion of their disposable income on food. Here, we have compelling field-based evidence that such taxes don’t need to be high to be effective.”
The study finds large shifts in demand toward the lower-calorie option are achieved with a price difference of just 5-10 percent. Consumers respond to small price incentives; and more importantly, low-income consumers who are at higher risk for obesity are particularly responsive.
The authors also examine implications of a fat-tax and the inherent trade-offs for different segments of society from such interventions. While there are economic losses from taxes to some segments, the health benefits from shifting to the lower-calorie option outweighs these costs. The authors’ recommendation is a selective taxation mechanism designed to induce substitution within a narrowly defined product category (e.g., baked versus fried chips), rather than to discourage consumption of the category as a whole. This has the additional advantage of mitigating the regressive nature of food taxes since some options within a narrowly defined product category can be made less expensive. Importantly, these taxes should be imposed as an excise tax so that they are reflected in the shelf price at the point-of-purchase, rather than imposed as a post-purchase sales tax where they become less salient in the decision process.